Funds listing: Competition for alternative funds IPOs heats up
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Funds listing: Competition for alternative funds IPOs heats up

London Stock Exchange takes on Euronext with launch of dedicated market.

 Martin Graham, London Stock Exchange

"Hedge funds and private equity are an increasingly important asset class that pension funds and other institutional investors want access to"
Martin Graham, London Stock Exchange

The London Stock Exchange has announced the launch of a dedicated market for issuers of specialist funds in an attempt to attract hedge fund and private equity vehicles, a source of listings that London has been losing out on to Euronext. Although the London Stock Exchange has been by far the favoured destination for foreign, secondary, and growth company listings in Europe, Euronext’s Amsterdam market has been conspicuously successful in attracting private equity and hedge fund listings. Lehman Brothers Private Equity Partners Limited, a private equity fund, which listed on the Amsterdam market this July, raising €500 million, is the latest in a growing list that started with Kravis Kohlberg Roberts in 2006.

The LSE has had trouble attracting listings from these issuers because, on the one hand, the listing requirements of its main market are too tough and, on the other, its Aim market does not offer the benefits of a fully regulated market. The new market, called the Specialist Fund Market, which will open in November 2007, aims to meet demand from issuers and investors for a quotation on a regulated market in London but with sufficient flexibility for specialist vehicles such as strategy hedge funds and private equity vehicles.

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