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Goldman Sachs’ investment vehicle, Petershill Partners plc, made its debut on the premium listing segment of the Main Market of the London Stock Exchange (LSE) on 28 September 2021 when in the company’s ordinary shares began. Trading opened at £3.50 per share and remained flat, closing at the same price despite a slight 3% drop to £3.40 earlier in the day. Admission and commencement of unconditional dealings was confirmed on Friday 1 October. 

Petershill Partners is listed as a standalone company, governed by an independent board. The group was founded by Goldman Sachs in 2007 to provide private equity growth capital to the alternative investments sector and was the first of its kind in the industry. It owns minority investments in 19 alternative asset management firms with a combined £136 bn of aggregated assets under management (see also: Goldman plans to float investment vehicle for £3.6bn). The company stated in its that: 

‘the alternative investments industry is highly attractive and…is expected to continue to record strong growth in the coming years, underpinned by multiple secular growth trends.’

Private equity in particular has seen significant growth within the alternative investments industry and a substantial increase in the number of institutional investors investing in private equity globally due to a low interest rate environment. According to the company’s , private equity assets under management has ‘grown at a compound annual growth rate of 9.9 per cent between 2010 and 2020’, and is forecast to grow significantly by 2025, at a faster rate than private markets as a whole. Roughly four-fifths of Petershill Partner’s assets are in private markets managers, including Riverstone Holdings, Harvest Partners and Littlejohn &Co, with the remaining in hedge fund strategies, meaning the group is set to benefit from the anticipated growth in the industry.

The IPO values the company at approximately £4 bn total market capitalisation at the commencement of conditional dealings, with a total offer size of £1 bn, making it currently the third largest flotation in 2021 overall. The second largest IPO in the third quarter was Bridgepoint group, with a £2.88 bn market capitalisation following its to the Main Market of the LSE in July 2021. Bridgepoint, another private equity company which also took advantage of the market boom, was the first private equity company to list on the LSE since 1994 and its shares have risen 40% since its listing. The success of these listings demonstrates the strong and continued growth of the industry and is unlikely to go unnoticed by other private equity firms seeking to go public.

The Petershill IPO provides an innovative link between the public and private markets offering public market investors an entry point into an industry which has traditionally been dominated by institutional investors who can typically withstand the long periods during which capital is locked in and the high fees. Retail investors will be able to access private capital and obtain ownership in privately held businesses operating in a sector with substantial growth opportunities. In a statement, Naguib Kheraj, Independent Chairman of Petershill Partners, said:

‘We are delighted that Petershill Partners will begin trading on the London Stock Exchange, giving public market investors a unique opportunity to gain diversified access to the rapidly growing alternative investment industry. We experienced a high degree of interest from investors, who recognised the unique strength and track record of the Goldman Sachs operator team, the attractive profile and prospects of our alternative asset manager partner firms and the benefit of a fully independent Board. We are very happy with the mix of shareholders participating in the offering. We look forward with confidence to delivering long-term value for all our stakeholders.’

The IPO also features an , commonly referred to as a greenshoe option, to issue up to a maximum of 15% of the total number of shares included in the primary offer which can be used to stabilise the price if it falls. Assuming the exercise in full of the greenshoe, the company will raise an additional £200 million increasing the total offer size to £1.2 bn. For more information on over-allotment options, see Practice Note: (a subscription to Lexis®PSL Corporate is required).

Further information on the Petershill Partners IPO can be found in our transaction database, which contains information on over 7,100 public company transactions.