Renaissance to Pursue Private Offering

From the FT:

Renaissance Technologies, one of the world’s biggest hedge fund groups, has shrugged off concerns about volatile global markets and is considering a partial float.
The $30bn (£15bn) group run by billionaire mathematician James Simons had held discussions about selling shares to sophisticated investors through a private trading network set up recently by a group of investment banks.
The move suggests that Renaissance believes that the recent crisis in the US credit markets and the global flight to safety among investors will be short-lived and that there will be ample opportunity for the hedge fund to continue to earn its historically high returns.
Renaissance believes that there will be strong demand for its shares from big US institutions and foreign investors such as governments in Asia and the Middle East.
The bullishness shown by Renaissance comes as hedge fund groups such as AQR and private equity firms including KKR are proceeding cautiously with planned initial public offerings.
However, those groups are contemplating full listings available to all investors that must be registered with the Securities and Exchange Commission. Renaissance is considering a so-called 144A listing that would not be registered and would be available only to institutional and other sophisticated investors.
The highly secretive Long Island-based group is considering this route because it would not be forced to publicly reveal significant information about its trading strategies and it believes it would be more likely to attract more long-term investors.
The shares would trade on a system called Opus 5, launched this month by Morgan Stanley, Lehman Brothers, Citigroup, Merrill Lynch and the Bank of New York Mellon.
The consortium platform is intended to compete with existing markets for private placements set up by Bear Stearns, Goldman Sachs and JPMorgan. Friedman, Billings, Ramsey has also been a big user of the 144A market. A Renaissance official could not be reached for comment. Talks about a sale are at a sensitive stage and could still stall, however the shares could be sold as early as next month.
It is not yet clear what size of stake Renaissance would sell in the offering but it is assumed that current management will retain control of the group.
Fortress Investment Group, the hedge fund and private equity firm that went public this year, manages about $43bn and has a market value of about $7.3bn.

Posted by on August 28th, 2007 at 9:00 am


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