Bridgepoint surges in trading debut after IPO - rare among private equity stocks

London

BRIDGEPOINT Group soared as much as 25 per cent in its London trading debut after the firm and its shareholders raised £789 million (S$1.47 billion) in an initial public offering (IPO), demonstrating the depth of demand for rarely listed private equity stocks.

The shares climbed to 424.05 pence at 8.07 am in London from the offering price of 350 pence, the top of the range at which the stock was marketed. The sale values the firm at £2.9 billion, the largest listing of a UK private equity firm in decades.

Liberum Capital strategist Joachim Klement said: "Private equity is one of the most in-demand asset classes right now, given the opportunity for these businesses to pick up investments at relatively low valuations."

Unlike in the US, where firms like Blackstone Group Inc and KKR & Co went public more than a decade ago, buyout groups in Britain have tended to remain small private partnerships still dominated by their founders or immediate successors, and listings such as that of Bridgepoint are rare across Europe.

Bridgepoint raised £300 million selling new stock, and its backers off-loaded existing shares worth £489 million, the company said in a statement.

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Bridgepoint is the latest private equity company to look to public markets in recent weeks. Antin Infrastructure Partners is considering a listing, and TPG is weighing a potential IPO or merger with a special-purpose acquisition company (SPAC), sources have said.

Closely held firms have been grappling with how to provide exits for founders, while also ensuring rising stars can monetise their stakes.

The share sale will help Bridgepoint fund growth plans, enhance its standing "as a trusted counter-party", fuel shareholder returns and repay debt, it said last week. Bridgepoint, which was spun out of Royal Bank of Scotland Group in 2000, manages about 27 billion euros (S$43.5 billion) of assets.

Last month, the company took a minority stake in Itsu, the Asia-inspired food company; in May, it teamed up with Astorg to buy Irish financial software company Fenergo. It also owns stakes in Burger King franchises in the UK.

The two largest London-listed private equity companies firms, 3i Group and Intermediate Capital Group, both went public in 1994.

Listed peers in Europe include EQT AB, the largest buyout firm in the Nordic region, Switzerland's Partners Group Holding and France's Eurazeo.

Middle-market firms like Bridgepoint have also faced increasing pressure to diversify their offerings as they face greater competition, which is pushing up the cost of acquiring assets and pressuring returns. The buyout firm sold an undisclosed minority stake to what was then Dyal Capital Partners in 2018.

Buyout firms are splurging billions on takeovers of publicly traded British targets, playing catch-up after avoiding the UK in recent years due to harsh Covid lockdowns, and supply chain and trade flow fears sparked by uncertainties about how Brexit would impact the country's economy.

If additional stock is offered to cover an over-allotment option, Bridgepoint's IPO could raise as much as £907 million.

Fidelity International, T. Rowe Price Group Inc and Mawer Investment Management took up £300 million, or a third of the total offering. BLOOMBERG