LONDON (Reuters) – Fund management firm Gartmore, which manages more than 17 billion pounds ($28 billion) of assets, is preparing an initial public offering as early as the end of the year, sources close to the matter said on Friday.
Private equity firm Hellman & Friedman, which holds a 50 percent stake in Gartmore, is looking to cut its stake by listing the fund manager’s shares in London, sources said.
The preparations reheat proposals from 2007 to float the company for up to 1.5 billion pounds. These plans were put on ice due to the financial crisis and company valuations have since dropped significantly.
In April, a senior Gartmore executive played down the likelihood of an IPO because of the state of the markets. [ID:nLS156350]
However, the recent surge in equity prices has reignited interest amongst private equity firms to list portfolio businesses.
“Hellman & Friedman is always looking at these opportunities; it wouldn’t be at all surprising if they would want to do something with Gartmore, which has some momentum behind it,” a source with knowledge of the situation said.
Hellman & Friedman and Gartmore both declined to comment.
Private equity firms are looking to realise some of their better-performing businesses in order to return money to investors, who have been starved of cash as company sales have been difficult to achieve.
There is a long list of IPO candidates from private equity firms — BC Partners’ [PCPRT.UL] Amadeus, Medica and Unity Media; Bridgepoint’s [BRDG.UL] Pets at Home, Blackstone’s Travelport and Permira’s [PERM.UL] New Look.
But Europe’s IPO market is still at a fragile stage, with investors demanding big discounts in valuations.
Hellman & Friedman’s stake dates from October 2006 when it backed a management buyout leaving senior management and the private equity firm with equal holdings in the company.
(Reporting by Daisy Ku, Raji Menon and Simon Meads; Editing by Tom Freke; Editing by Jon Loades-Carter) ($1 = 0.6006 pound)