Crowdfunding: New Asset Class, New Investor Class

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tabb forum logoBrokerdealer.com credits TABB Forum and submission from Kim Wales/Wales Capital with below

Crowdfunding is on the rise in today’s re-regulated and democratized global capital markets, and the JOBS Act is proving to be a game-changer for institutional investors.

After the Lehman Brothers’ bankruptcy left the market reeling, some questioned how a single U.S. investment bank could cause global pandemonium. Today, a change of course is underway. The economic turmoil since 2007 has provided a catalyst for change. As a new guard is called into order to rein in provincial finance, the old guard is preparing for life under the regime of the Jump Start Our Business Start Ups Act (JOBS Act). Crowdfunding – a new asset class and a new investor class – is on the rise in this re-regulated and democratized global capital market.

Many private funds have not yet embraced what is slated to become the game-changer and the most innovative reality for 21st Century Finance for generations to come. The millennial generation (ages 18 to 37), which makes up 86 million individuals and is larger than the baby boom generation, is at the forefront of a new economic movement that believes that it is important to grapple with issues such as inequality and its economic consequences.

For the full article, please visit TABB Forum

Euronext Exchange to go Go Public via IPO

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BrokerDealer.com provides below news courtesy of AP Wire Services and Washington Post

Atlanta-based IntercontinentalExchange Group (ICE) said Tuesday it is launching an initial public offering (IPO) of ordinary shares in Euronext NV. The pan-European company operates exchanges in Paris, Amsterdam, Brussels and Lisbon.

For the full story, please visit the Washington Post

May 26 Post-IPO Quiet Period Expiry For Ares Management Opens A Cheap Window For A Solid Company; Underscoring Role of Underwriters

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BrokerDealer.com’s blog editor thanks Seeking Alpha for below extract; an independent analysis of alternative fund management firm Ares Management, which launched its initial public offering (IPO) on May 1. The analysis of this multi-strategy investment management platform was contributed by Don Dion, the owner and Chief Investment Officer of DRD Investments, LLC, based in Naples, FL. and Williamstown, MA., a family office focused on managing a long/short hedge fund, real estate assets and various other financial assets for the Dion family.

Summary

  • The Quiet period on underwriter research on ARES will come to an end on May 26th, 25 days after the firm’s May 1 IPO.
  • ARES has had a rocky start on the market post-IPO after pricing well below the expected range and continuing decline, despite strong underwriting, management, and revenues.
  • Given ARES’ strong fundamentals, we suggest investors consider buying into the company as share price could temporarily increase, following underwriter reports.

The SEC-enforced quiet period on underwriter research on Ares Management LP (ARES) will come to an end on May 26th, 25 days after the firm’s May 1 IPO.

The expiration of the quiet period will allow ARES’ IPO underwriters to publish research reports on the alternative asset manager, likely leading to at least a temporary increase in the price of ARES shares.

Strong Underwriting Could Lead To Flood of Positive Reports

The firm’s lengthy roster of underwriters, including BofA Merrill Lynch, J.P. Morgan Securities LLC, Barclays Capital Inc, BNY Mellon Capital Markets LLC, BMO Capital Markets Corp, Citigroup Global Markets Inc, Deutsche Bank Securities Inc, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co, Imperial Capital LLC, Houlihan Lokey Capital Inc, JMP Securities LLC, Mitsubishi UFJ Securities Inc, Keefe Bruyette & Woods Inc, Morgan Stanley & Co LLC, SMBC Nikko Securities America Inc, RBC Capital Markets LLC, SunTrust Robinson Humphrey Inc, Wells Fargo Securities LLC and UBS Investment Bank, will attempt to breathe life into the stock by unleashing a wave of positive research on ARES at the conclusion of the quiet period.

Correlation Between Underwriting and Share Price

Both the results of recent academic studies and our own research over the past two years have provided empirical evidence of a correlation between the reputation and quantity of IPO underwriters and a rise in share prices with the expiration of the quiet period; ARES’ impressive list of underwriters should prove an asset at the end of the quiet period.

Share prices usually begin to rise a few days in advance of the expiration as aggressive investors purchase shares in order to take advantage of the upcoming underwriter reports. These early buys generate an atmosphere of rising demand, causing a rise in the price of shares before the underwriters have had the opportunity to publish their reports.

Overview of ARES Business

ARES is an alternative asset management firm, offering a variety of investment strategies to its growing investor base.

About the Analyst Continue reading →

Private Equity Deals: Don’t Forget About The Fees; BrokerDealer.com Snapshot

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Extract courtesy of May 25  Sunday New York Times/Gretchen Morgenson

Private equity has become $3.5 trillion piece of the $64 trillion asset management industry.

There was joy on Park Avenue as the news arrived from Warsaw, a small Indiana city.

Two companies, twin pillars of Warsaw’s economy, had decided to merge. It was the biggest business story to hit the town in decades; an area newspaper, The Elkhart Truth, called the deal nothing short of an “earthquake.”

Back in New York, in the Midtown headquarters of the Blackstone Group, the tie-up meant a handsome payday for Blackstone and a handful of other private equity specialists. Together, they had bought one of the Warsaw companies, Biomet, in 2007. Now they had agreed to sell it for $13.4 billion, or $2 billion more than they paid.

 Such is the way of private equity, a signature Wall Street business of the past two decades. The sale — Biomet was bought by Zimmer Holdings, creating a leading orthopedics company — meant a nice return for everyone, including public pension funds that had invested their money in the private equity partnerships that owned Biomet.

But for Blackstone and the other private-equity partnerships in the deal — overseen by Goldman Sachs, Kohlberg Kravis Roberts and TPG Capital — this deal will be a gift that keeps giving. That’s because, beyond the profits they share with their clients, they will be paid millions more in fees — for work that they are never going to do.

For the complete story from the NY Times, please click here

NYSE CEO Steps Aside Sooner; Exchange Owner ICE Appoints Rising Star To #2 Spot

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nypostBrokerdealer.com update courtesy of NY Post

Duncan Niederauer, the chief executive of NYSE Group, is stepping down sooner than expected after selling the company to Intercontinental Exchange Group.

The “rapid integration” of the two companies will speed up Niederauer’s retirement, according to a statement on Thursday.

nyse start duncanThe 55-year-old Niederauer, who has served as CEO of NYSE since 2007, will continue as president of ICE until August.Thomas Farley, the chief operating officer of NYSE, will succeed Niederauer, taking the title of president of NYSE.

Niederauer agreed to sell New York Stock Exchange to the derivatives-centric ICE in an $11 billion deal that closed late last year.

As the long-time boss of the Big Board, he oversaw the exchange during a disruptive time when high-speed computers replaced human traders on Wall Street.

The deal to sell the NYSE to ICE was also driven by big changes roiling the markets, reflecting the growing importance of derivatives and the diminishing influence of the Big Board.