Hedge funds amass short positions in private equity-backed IPOs
Hedge funds are building up multimillion pound bets against companies recently listed by private equity after a number of high-profile flotations this year have fallen sharply in value, leaving institutional investors nursing large losses.
Hedge funds have built up short positions – essentially wagering that a share price will fall in value – in a number of recent private equity-backed listings including Pets at Home, Saga and Just Eat in the UK, according to regulatory filings.Private equity groups have attracted criticism from investors this year after a number of companies that have publicly listed across Europe have fallen sharply from their original price.At the same time, hedge funds that specialise in stock picking have been seeking to profit from a return of dispersion between the stock market performances of better and worse performing companies following an indiscriminate rise in share prices last year that hurt short sellers.
Pets at Home, a retailer selling everything from rabbits and kittens to glow-in-the-dark dog collars that was listed by KKR in March, has seen Temblant Capital and BlackRock sell short 1.55 per cent of its shares. Since listing at 240p a share, Pets at Home has tumbled to 181.6p.Other private equity-backed listings that have come under the scrutiny of hedge funds include Saga, the over-50s insurer, which was backed by Permira, CVC Capital and Charterhouse, and Just Eat, an online takeaway food website that was backed by private equity group Vitruvian Partners and other venture capital investors....MUCH MORE
HT: Barron's Focus on Funds blog.
See also the FT's "BlackRock sounds alarm over IPO quality" HT: Alphaville's The Closer post.
See also the FT's "BlackRock sounds alarm over IPO quality" HT: Alphaville's The Closer post.
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Isn't it rich?
Are we a pair?
Me here at last on the ground,
You in mid-air.
Send in the clowns.
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-Words and music by Stephen Sondheim
Are we a pair?
Me here at last on the ground,
You in mid-air.
Send in the clowns.
Isn't it bliss?
Don't you approve?
One who keeps tearing around,
One who can't move.
Where are the clowns?
Send in the clowns....MORE
