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Premier's IPO plans get fund buyer backing

Premier's IPO plans get fund buyer backing

Fund selectors have backed Premier Asset Management’s plan to float on the stock exchange – provided it can maintain its existing set-up.

The £5bn group is understood to be working towards re-entering the public-listed space after a near 10-year absence.

The fund house was taken private by Electra Capital in 2007, the latter then reducing its stake seven years later. Premier is now 50 per cent owned by Elcot Capital with Electra and the firm’s management retaining 25 per cent each.

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Initial estimates value the firm at around £200m.

With fund group IPOs a rarity, concerns over motivations to float have surfaced, with fears Premier could lose the boutique nature that has generated popular products such as its multi-asset income strategies, which have more than £2bn in assets.

However, many have suggested the firm – should it retain its key figures – could go the way of Liontrust and Polar Capital in keeping such a structure in place while being publicly listed.

Mike Deverell, investment manager at Equilibrium, said he preferred fund managers with a long-term tie in to the firm.

“That is still possible via a listed firm,” he said. “We like fund managers who are part-owners of the business, or at least have potential share options in the future.”

However, he added: “Periods of uncertainty can lead to issues, particularly where fund managers do not have such incentives. The IPO could make them feel uncomfortable and look elsewhere. There could also be some movement after if certain members of the business decide to take the profit and leave the firm.”

Tilney Bestinvest managing director Jason Hollands said: “An investment management firm’s culture stems from its people, values and investment philosophy rather than its shareholder base and there are examples of listed firms – such as Liontrust and Polar Capital – that have successfully retained a boutique culture.” 

Fund buyers said the key to Premier retaining its popularity among the community would be fund manager and business management retention.

Wellian Investment Solutions chief investment officer  Richard Philbin said he did not expect significant change post-listing.

“The business is financially strong and by being visible with regard to reports and accounts, the spotlight is brighter. 

“Having had a number of external professional shareholders for a good number of years, Premier has obviously seen this moment to capitalise on coming to the market.

“I don’t know the reasons for the management to raise capital – it could be to dilute major shareholders, to crystallise gains or for expansion reasons.”

Mr Hollands encouraged the company to focus on providing incentives for existing staff to stay on board during the listing process.

“What is beneficial for businesses is that the key staff are committed and have some form of stake to give them ‘skin in the game’ in terms of making sure the firm is a success,” Mr Hollands added.