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Link Administration debuts at 11% premium

[SYDNEY] Shares of Australian pension services firm Link Administration Holdings Ltd debuted at an 11 per cent premium to their issue price after raising A$947 million (US$686.4 million) in the country's biggest initial public offering so far this year.

The shares first traded at A$7.10, compared to an issue price of A$6.37, while the broader market was flat.

Link's major owner, buyout specialist Pacific Equity Partners (PEP), sold 42 per cent of the company by issuing up to 162.5 million shares, giving it a market capitalisation of A$2.6 billion after Monday's listing.

The strong performance will encourage other vendors considering whether to chance a listing in a share market that has lost 11 per cent since March, prompting some A$3 billion worth of announced IPOs to be cancelled or delayed.

The debut will also reassure investors who bought shares of Link at the top of PEP's target range of A$5.41 to A$6.37.

IPOs of companies owned by private equity firms, like Link, have fallen to US$1.47 billion so far this year, according to Thomson Reuters data, a far cry from full-year 2014's record $6 billion.

The sale marks a hefty return for PEP which formed Link from the registry business of the Australian Securities Exchange and fund manager Perpetual, which media reports said it had bought for A$132 million in 2005. PEP has since sold down its holding to roughly half.