Insights for Investors by Investors

Fund manager, GQG Partners, set to boost IPO market

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The IPO market is absolutely booming. To put it mildly. Never have we seen this much enthusiasm from cashed up investors, ready to splash their cash as they hunt for the next ten bagger. This year 135 new companies listed on the sharemarket, which is almost on par with the highest number of listings ever recorded, 136 IPOs in 2007. A record which will easily be broken considering there are still two months remaining in the year.

And the December quarter is shaping up to be an IPO bonanza, with roughly +$1 billion in floats due to hit the before the year’s end. Last quarter’s soaring iron ore price along with several commodity prices trading at near record highs, is what has prompted many of these junior explorers to raise capital at an opportune time. Tallying up the upcoming resources listings, we counted 21 new resource listings with a combined raising value of approximately $204 million.

But it wasn’t junior explorers that have caught our eye. It’s the mammoth $1.3bn GQG Partners IPO that has been slated in just this month’s end (October 26). The float has been billed as the largest of the year and is headed up by UBS and Goldman Sachs.

In total, the manager operates four global equities investment strategies with FUM of around $116 billion, on behalf of clients such as Australian Super, Rest Super and Cbus. It will be a likely rival to Magellan, which is of similar size, although GQG is just five years old. The manager is focused on expanding its Australian exposure with a focus on growing its retail offering through financial advice networks.

According to the AFR, “GQG Partners said it would sell 593.5 million securities at $2 to $2.20 each for its IPO, to raise $1.187 billion to $1.306 billion.”

Valuing the company at around $6 billion. Executive chairman and co-founder Rajiv Jain would own a 68.8 per cent stake, CEO and co-founder Tim Carver 5.6 per cent and new shareholders would account for 20.1 per cent of the listed GQg Partners.

Final offer price should be disclosed on October 21-22. The deal would see GQG Partners trade on the ASX from October 26.

The other upcoming IPOs are as follows:

Innovative tech company Way 2 VAT (ASX: W2V) is another float looming this week, with its AI software used to automatically process VAT and GST claims for businesses. The Israel-based business, with exposure to travel opening up across Europe and the Middle East, raised $7 million at $0.20 per share.

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