Doughty Hanson, the pan-European private equity provider, has shelved plans to list a €1 billion private equity vehicle on the Euronext Stock Exchange in Amsterdam.
Earlier today the firm released a statement saying “concerns over the trading performance of similar recent transactions, which trade at discounts of up to 15 percent compared to the IPO price, mean that the offering has been postponed so that investors are not exposed to any potential discount.”
Doughty, headed by founders Nigel Doughty and Richard Hanson, would have been the third private equity group to list a fund on Euronext in 2006. Earlier this year, Kohlberg Kravis Roberts and Apollo Management raised $4.8 billion and $2 billion respectively through fund IPOs in Amsterdam. Both vehicles are trading at a discount to the issue price.
Doughty had been actively marketing its listed fund in the last two weeks. The decision to abort the project comes despite efforts to make the offering appeal to prospective investors.
The firm committed €40 million in cash to the vehicle to help offset the listing cost. It had also opted for a partly paid structure to reduce the cash drag that a fully paid structure would have incurred.
To further sweeten the deal, Doughty would not have charged a management fee for the first two years, and would have foregone any carried interest until a certain net asset value growth threshold would have been passed.
The firm worked with Goldman Sachs and Citigroup, which also advised KKR and Apollo on their Euronext transactions.
The news is likely to add weight to the argument that in listing their multi-billion dollar structures, KKR and Apollo were able to take advantage of a small window of opportunity that has now effectively closed.