IPO Rocket.com

Joana asks:

Reflecting the trend in the broader markets, the IPO market in India remained more than subdued this week. Almost, like a polar bear hibernating in the winters in the absence of any IPO related news, except investors losing over Rs 5,000 crore in 2008 IPOs. The reasons for this latest IPO news from India are very obvious. The Wall Street mayhem has cast a gloom over all the major global markets, including the IPO markets in India.

The IPO pipeline in India however suggests that everyone has not lost hope yet. Till, 12 September, Adani Power, Alkali Metals Ltd, Apollo Health Street Ltd, D.B.Corp.Ltd, Mandhana Industries Ltd, VRL Logistics Ltd, Future Ventures India and Oil India Ltd are some of the companies that have received SEBI’s approval for coming out with public issues or follow-on public issues. But they have not yet announced the dates. It is understood that they are waiting for the market to show some signs of recovery before they wade into the primary market.

Among the IPO issues in the pipeline in India, Adani Power’s is the biggest with more than Rs 5,000 crore, followed by Future Ventures India’s Rs 2,600 crore issue, Oil India’s issue of Rs 1400 crore and D.B.Corp’s Rs 1,000 crore. Even if some of these big ticket issues are able to successfully mop up the amount, it can be a big boost for the IPO markets in India. The rest of the IPO issues in the pipeline in India are between Rs 100 crore to Rs 500 crore.

But only a brave heart can take the plunge into primary markets, given that investors have burnt more than Rs 5,000 crore in 2008 IPOs so far this year. As on 17 September, of the 42 IPOs that came out in 2008, only seven were trading above their issue price. The gainers include Onmobile Global, Bang Overseas Ltd, Titagarh Wagons, Anu’s Laboratories Ltd, Austral Coke & Projects, Gokul Refoils and Vishal Information. Vishal Information’s IPO stands out with more than 100 per cent year-to-date gains over its issue price despite huge selloff in the past few days in the broader markets. Austral Coke & Projects and Gokul Refoils also deserve some credit with more than 30 per cent returns. All these issues were listed in the past two to three months, probably, pricing their issues more correctly. Among the big ticket IPO issues in India that are waiting for the regulator’s approval are NHPC (Rs 1,680 crore), Bharat Oman Refineries (Rs 2,400 crore), and Godrej Properties (Rs 150 crore). These companies would be hoping that the regulator takes some more time to get the nod.

The rights issues currently open in India also look thin: just three of them. Of course, Sebi’s move of reducing the time period for which they need to stay open will help the companies. The logic of keeping rights issues open for a longer time does not make sense in the current volatility as the price of the stock is subject to wild fluctuations.

Caroline asks:

Does your business have its liquidity event mapped out? Entrepreneurialism can be demanding, and therefore drafting an exit plan is often ignored. If you have raised venture capital then the chances are that your investors will expect you to achieve liquidity at one point in the future.

One tough part of entrepreneurialism is not only working out if you have a good idea, but also establishing if it has the capability to scale, get acquired, or go public. If the answer to any of those questions is “no”, then it’s essential that you establish what your long terms goals are. If you are not able to achieve liquidity, then the performance of your profit and loss account will be the only business metric that matters. It also means that, should you wish to move on in the future, you’ll have to give up your businesses profits with no realizable gains.

One key part of entrepreneurialism is planning your exit strategy. Although your business may change routes along the way, having a solid plan to work from can often pay dividends in saving wasted time, energy and money. If you wanted to start a broadband business, for example, then it would be easy to think of potential companies that might want to buy you at a later stage. And, the market is certainly big enough to go public if you manage to gain a decent percentage of market share.

However, entrepreneurialism isn’t always that simple. Some companies may have a completely new idea taking on a completely new market. In this instance planning your exit can get a little bit trickier. It’s less likely you will have direct competitors who would look to buy your business, and therefore you have to consider the likelihood of achieving liquidity through an alternative route.

Maybe a potential buyer would be able to achieve synergies through selling your product to their customers, or integrating it with their existing technologies? Or maybe if you manage to promote entrepreneurialism within the boardroom, a management buy-out could be an option?

The following are options to consider when planning your exit:

IPO

An IPO or initial public offering is when you make your shares available on the stock market. This is usually the most liquid market for equities, however you will usually require a sizeable market capitalization and stable earnings before this is an advisable option. At this point, there will be a firm price associated with the equity you own in your business.

Acquisition

If your company gets acquired then you may be able to get a much quicker exit than if you hold out for an IPO. If you intend to develop great technology, but do not want to build the infrastructure to unlock its full potential, this can be a great option. Sometimes entrepreneurialism can be about doing what you do best, and then moving on. For some people, that’s starting companies and taking them to a certain stage.

Sell Your Equity

It’s possible for you to sell your equity while allowing pre-existing investors to keep hold of theirs. You may find that pre-existing investors are the best people to approach in this instance. However if the company has potential, a large pool of potential candidates may be interested. The board may also consider a share buy-back.

Exie asks:

An IPO, also known as the Initial Public Offering is a favorite with new ventures. For those not familiar with the term, an IPO is the first time a company decides to make its shares available to the general public. It enables you to raise funds from people by promising them a portion of your profits later. Sounds good? However, the markets can also prove treacherous for newcomers. Speculation reigns high and so is the probability of going from riches to rags. If you are contemplating an IPO, then make sure that when it comes to basics, you are not completely at sea!

All Hands Meeting: Any firm planning an IPO will, typically, need to hire an Investment Bank and a team of lawyers and accountants, who will at a later date, come together for an all hands meeting. This meeting is usually held close to two months before the planned IPO and is meant for team players to decide their plan-of-action.

Disclosure and Prospectus: The disclosure, as the name suggests, requires that the company reveal all that needs to be known about its business, especially in terms of growth plans and risk faced. All the relevant data, ranging from legal documents to financial records, must be organized chronologically, in the form of a prospectus, also known as a “red herring”. For an IPO in the United States, the prospectus will have to be filed along with the “S-1 document” with the Securities Exchange Commission (SEC). Together, they form the registration statement. The SEC requires a “quiet period” to be maintained for about 25 days after the stock starts trading. So, the prospectus may well be the only source of information for interested investors during that period. Needless to say, it is an incredibly important document.

Underwriting: The Investment Bank is responsible for finding investors. If they fail to do so, they will have to buy the shares themselves. In return for underwriting or assuming this risk, they charge a fee, which is deducted once the funds are raised. Underwriting by a reputed firm lends credibility to the IPO. Often, there is more than one underwriter and in such a case the one in charge is called the lead underwriter or lead manager. Once the prospectus is filed with the SEC and a response is awaited, the lead manager sets out to find prospective investors. When more than one underwriter is involved, the lead underwriter assigns a certain number of shares to every member of the syndicate (fancy name for the other investment banks in the team) for which they have to find takers.

The “Multi-City” Tour: Simply put, this is a road show to attract the big investors. Doing a tour of big cities where such investors can be found, presenting the business plan to them and convincing them to invest in your firm, are all necessary steps to a successful IPO. All that couldn’t be said through the prospectus can be mentioned during the road show. Apart from a good business plan, investors would also want to know about the people in charge; the Management and the Board of Directors. So before you go in for an IPO, make sure you have the right people by your side. The final prospectus can then be printed and distributed to the investors.

Pricing: Based on the expected demand for the stock, the Investment Bank fixes an appropriate price per share (or even a price band in certain countries). Interested investors are invited to apply for the shares at that price. Allotment of shares is a function of supply and demand. In case of excessive demand, also called, oversubscription, the company can decide to issue more shares than originally planned. This is also called a “greenshoe option”.

The IPO: The IPO is considered to be official a day or two after the prospectus is distributed and the price decided upon. The Investment Bank continues to be responsible for the IPO’s performance for atleast seven days after it becomes official (this may vary from country to country). During this time period, the company may also withdraw the IPO. After a period of seven days, it is considered final and no change of mind will be entertained.

Another interesting option is the Direct Public Offering, also called the DPO. Through a DPO you can go public without the help of an underwriter and trade over the internet. Learn all you would want to know about IPOs and DPOs in, “Going Public: Everything You Need to Know to Take Your Company Public, Including Internet Direct Public Offerings” by James B. Arkebauer & Ron Schultz, available at “IPO Decision: Why and How Companies Go Public” by Jason Draho, could also come in handy.

The nuances of opting for an IPO can be mind boggling, but with good team members, sound knowledge of the markets and a great business plan, it should be no challenge at all!

Kathryn asks:

So you’d like to earn your living DayTrading? You have all heard the stories of losing DayTraders running down the streets shooting people?

During the heady .com days prior to 2001, (when Bush became president,) there were stocks, 3 or 4 times a week that went up from 30 to 200% a day.

It was possible, if you knew what you were doing, to check before the market opened to see which stocks were running in real time and why.

And, if you then had a fast electronic brokerage system you could dive into the market, buy a bunch and sell them the same day.

About 1% of people doing this consistently made money. I saw one private individual make a million in one day shorting a Word Processing Stock. And then there was somebody who lost a bunch hanging on too long to an IPO.

As a matter of fact the bottom line is that if you take inflation into account you’d have been better off putting your money in an old sock since 2001. So what to do?

Give up on the Stock Market let alone give up on DayTrading? Don’t give up on the Stock Market, if you use the right system you can still make 30% or more on your money annually.

The bottom line is this; if you want to DayTrade there is only one way to do this today. And that is with MINDBLOWING News.

MINDBLOWING News along the lines of: XYZ corporation finds cure for cancer. ABC Inc invents Eternal Life Pill DreamCar Corp invents car that runs on water.

You get the idea. And then I am going to use another qualifier: You should get this news BEFORE most other people get it.

How to do this: For about $10 a month you can get a subscription to real-time market news. Get your Real Time Market News at about 6 AM Eastern Standard Time.

Say you find the real time news that a company has invented a car that runs on water. Check the time the news was first released, making sure that news item was not available yesterday.

Buy the stock now with money that you can afford to burn ALWAYS USING A STOP LOSS. Most electronic brokerage firms today allow you to buy stocks on NASDAQ only as early as 6 AM EST.

Sell the stock at 9.28 AM EST to all the traders that are waking up. You could conceivably double your money.

So would you then trade again in this stock after the market opens officially? No,you should not.

Too many mindgames will be played by market makers during the first day with the stock that produced the mindblowing news.

Remember the statement above: “There have been very few days since 2001 that any stocks actually went up more than 30% in one day, the oomph has disappeared from both the Nasdaq and the Dow.”

Never hold the mind blowing news stock overnight, because people in most cases will dump it on the second day.

One more tip: Never buy IPO’s on the first day. The most touted IPO(meaning almost all large brokerage houses were praising this IPO to the sky) cost people the most in decreased value on the second day after the IPO came out.

Who were the winners? The brokerage houses. So, if you have money to burn, have a cast iron stomach and want to watch market news from 6 AM to 9.28 AM EST, DayTrading may be for you.

Johna asks:

Sources confirm, leading American investment banker, Goldman Sachs is likely to ink a deal with real estate major DLF, investing close to Rs. 1,000-crore in the firm. The sources claim Goldman Sachs is bullish on investing in some of the Indian real estate major’s on-going projects, including the one being developed in Delhi, part of a joint venture with Indiabulls. Earlier this year, Goldman Sachs announced plans for investing around Rs. 4,500-crore in various businesses in India, including, residential and commercial real estate and infrastructure projects.

However, when contacted by ET, a Goldman Sachs spokesperson said they would not comment on market rumours, and neither did Saurabh Chawla, DLF’s Senior Vice President Finance confirm ongoing talks with the American investment banking major.

Sources confirming the move, were, however, not sure of the exact modalities to be followed by Goldman Sachs, while investing in the Indian real estate behemoth. According to inside news from Goldman Sachs, while discussions are on with DLF, Goldman Sachs may also initiate discussions with some other Indian developers. A tricky question, it remains to be asked as to how this investment would be treated, as the government has not allowed pre-IPO FDI in the real estate sector. Government officials maintain that FDI infusion before an IPO can only come in as portfolio investment, subject to a 10%-cap.

Goldman Sachs’ association with DLF begins from when the former was a joint venture partner of Kotak, the lead banker in DLF’s proposed IPO. However, earlier this year, DLF and Kotak broke a 10-year alliance, and subsequently, Goldman Sachs announced plans to set up its own business in India.

L.B. Entwistle, CEO Goldman Sachs India says his bank wants to introduce all their businesses, including asset management in the country over a period of time, while announcing plans for investing $1-billion in the sub-continent, over the next couple of years.

Sources confirm the investment banking firm is eyeing significant stakes in some extremely hot and booming real estate destinations, such as, the NCR, areas around Mumbai, and near the under-construction Bangalore International Airport. It is also believed to be bullish on areas close to already announced SEZs.

On an all time high, Indian real estate continues to grow in demand as it like other industries, begins to attract foreign direct investment on a gigantic scale!

Johnetta asks:

David Gray, a Principal with Orchard Growth Partners, has recently been appointed the Honorary Treasurer of the Motor Neurone Disease Association. He has been a Trustee since September 2005 and is a member of the Finance Committee.

MND affects around 5,000 people in the UK; five people a day die from the disease and life expectancy for most is just two to five years. The Research Foundation was launched in 2006 to raise £15m to specifically finance a six year plan to hopefully move closer to the vision of a ‘world free of MND’. So far more than £11.5m has been raised.

David, a Chartered Accountant, is an experienced finance director, primarily in quoted and AIM listed small caps. He has taken a company to IPO on AIM and worked with other SME’s including another planning an AIM listing and a start up ladies fashion business.

Commenting on his appointment, David Gray said:

“I feel honoured and privileged to have been appointed. I follow in the footsteps of some excellent past treasurers and am looking forward to working more closely with the executive team at the MND Association. With increased funding and awareness it is an exciting time which will hopefully contribute to the ultimate aim of “a world free of MND“.“

About the Motor Neurone Disease Association:

The Motor Neurone Disease (MND) Association is dedicated to the support of people with MND and those who care for them. The Association funds and promotes research to understand what causes MND, how to diagnose it and, most importantly, how to effectively treat it so that it no longer devastates lives. We also campaign nationally and locally for better care for all people with MND, and provide support and advice to help people with the disease and those who care for them to achieve the highest quality of life possible.

www.orchardgrowth.com

Diamond asks:

WSJ article “IPO Obstacles Hinder Startups” offers a good coverage of how IPOs are becoming tougher for small venture-backed companies.

This raises the question, what should CEOs and early-stage VCs do, once a company has reached $100 M+ in annual sales? (Below this threshhold, it is absolutely undesirable to go public; investor courting, ongoing investor management, Sarbanes-Oaxley compliance related paperwork and massive expenses - being some key distractors …)

In general, by year 5 or year 6 in a company’s history, the Series A investors, the Founders, and the early executive team that is still around - get itchy to extract some liquidity. Today, given the sophistication, the available money, and the level of activity in the Private Equity industry, a late-stage / LBO fund could easily step in and provide the necessary liquidity.

Liquidity, I believe, is no reason to go public prematurely. An enterprise that has built-in scalability should stay private, stay on course, and execute, execute, execute. If, however, the business does NOT have built-in scalability - and most don’t - they should absolutely NEVER go public. They should get acquired, and become part of a larger portfolio.

Last year, 41 start-ups backed by venture-capital investors became publicly traded U.S. companies, down from 67 in 2004 and 250 in the boom year of 1999, according to research firm VentureOne.

I would say, the recent numbers are much closer to what they should be.

After all, how many enterprises really have built-in scalability in their business model?

Most companies simply go public and then struggle, giving smart investors absolutely no reason to touch them, and hence, giving analysts no incentive to cover them!

Rather, a secondary exit market for private placements of a chunk of the company’s shares held by early shareholders - is a far better alternative.

Yahaira asks:

Benedicte Gravrand, Opalesque London: Amir Zada, associate director at Exotix, an investment broker specialising in emerging markets and frontier markets with expertise on illiquid, distressed, undervalued debt, spoke to Opalesque about some recent issues related to emerging markets and especially Africa.

Emerging markets, and of late, frontier markets, have been the way out of economies suffering from subprime-related troubles. This month (July) alone saw London-based firm Fincere Ltd. launching a global emerging markets hedge fund, HSBC’s fund arm announcing plans for a frontier market fund, Calstrs looking to allocate to frontier markets and news of sovereign wealth funds turning to emerging markets. Although a recent Fitch report says there has been a sharp acceleration in inflation in several EM economies, “posing a major challenge to relatively young monetary and inflation targeting regimes”, nevertheless, activity indicators for most emerging (and developing) market economies remain strong. Fitch forecasts still impressive growth of around 6% this year, albeit down from more than 7% in 2007” (Coverage.)

The Credit Suisse / Tremont Emerging Markets Hedge Index was up 2.14% in May and -1.99% YTD. The Barclay Emerging Markets Hedge Fund Index did not do so well as it returned -3.58% (est.) in June and -8.86% (est.) YTD. And the Eurekahedge Emerging Markets Hedge Fund Index returned -2.78% (est.) in June and -5.30% YTD.

Local currency funds are favourite

“Investors are flocking to emerging market debt, brushing past securities issued in hard currency to buy sovereign bonds in Mexican pesos, Brazilian reals or Turkish lira,” reported the FT. According to figures from Standard Asset Management, local currency assets accounted for most of the inflows, attracting about $212m, compared with $63m into blended funds. “If you look at the way hard currencies have been performing of late… Comparing to 2000, the values of local currencies is so much more,” Mr. Zada said. “So for the near future at least, local currencies are very beneficial.”

IPOs: more to come from emerging and frontier markets

It was reported last month that the London Stock Exchange (LSE) was seeing an increasing amount from emerging market companies raising IPO capital. “The smaller companies tend to list on the Alternative Investments Market (AIM) ,” Mr. Zada said. “The larger economies’ companies (from BRIC economies) would very likely do an IPO on the LSE purely because of capital restraints. But you do have smaller economies’ companies that are doing extremely well. Nigeria for example, in which GDP is growing at 5% p.a., has a lot of companies that are going for IPOs in alternative markets.”

Equities in Africa: long term value can be outstanding

EM equities have gained 12% since the end of January and so have shown obvious profitability. Although some believe the near-term risk/reward trade-off for EM equities has deteriorated ( Source).

“Exotix’s focus on equities is purely on sub-Saharan Africa at this particular moment. Africa as a whole, and in particular places like Nigeria, is really in the early stages of growth. So even though of lot of these companies are listed locally or externally and the trading potentially expenses valuation; despite that, it is still at an early stage of growth so the long term value involved in getting hold of these stocks is still predominantly out there. There is still so much value left in those companies in the long run because of the life cycle of the stock and the countries that they are involved in.”

Source:

Emerging markets specialist Exotix

 

Leonor asks:

On the Gregorian calender, 1998 came across as a year like any other. Okay, there was some significance attached to the fact that it was the year of the Twins or Geminians. But apart from the above facts, no one paid much attention to this particular year. It was only after historians got together to compile certain facts, that everyone realized how really momentous this one year had been! It was the year of IPOmania, along with other noteworthy events!

This is a compilation of all the major occurrences that had taken place in 1998, along with IPOmania–

(1) More than positive happenings like IPOmania, scandals remain in the public memory for a long time, especially if it is something involving the U.S. president! This was the year when Bill Clinton’s relationship (supposedly discrete) with Monica Lewinsky (ex-White House intern) was brought out into the open. From then on, this incident was always referred to as the White House scandal.

(2) Ramzi Yousef, a prime suspect in the bombing of the World Trade Center, was sentenced for life on the eighth of January.

(3) The U.S. president, Bill Clinton took action against Iraq, which refused to close down its weapons of mass destruction program (WMDP). The president had been impressed upon by the U.S. Senate to do something in this regard. It was in the month of February that the Senate had passed Resolution 71.

(4) On the sixth of January, the National Aeronautics and Space Administration launched the Lunar Prospector spacecraft into space. It was directed into the moon’s orbit, and later presented evidence of frozen water found at the moon’s poles. This spacecraft had been constructed and developed for the sole purpose of low polar orbit investigation on the moon, and was meant to be a part of the Discovery Program.

(5) The popularity of the Internet grew by leaps and bounds in this year. There was quite a lot of sophisticated technology that was offered to its users.

Not only were Net savvy people excited about how the World Web could change their lifestyles, even the business world felt thrilled at the opportunity to experiment with a new way of conducting business transactions! The trading community believed that the Internet would prove to be a wonderful platform for investors and brokers–they could use it to generate great gains!

(7) The most exciting thing about 1998 was the “launching” of IPOmania, as mentioed earlier. Quite a few Internet-based organizations were involved with this idea of generating large revenues and seeing business operations to successful completion, via their own initial public offering (IPO).

The SEC or U.S. Securities and Exchange Commission conducted a survey, and discovered that around 370 organizations had registered their IPO in 1998! The total revenue proved to be an astounding $44.8 billion! IPOmania was definitely at its height!

Around 25 organizations that were part of IPOmania, were Internet-based companies. Some noted organizations were–

(a) Think of search engine, and one thinks, “Google Inc.”! Well, its services were launched in 1998! Even today, it is claimed to be the biggest search engine on the World Web.

(b) Who has not heard of the best auctioneering service on the World Web–eBay? They too came into the public eye on September 24, 1998. Thir initial public offering was set at a price of $18 per common share. By the time it closed, the value of each common share had risen to $252.25–a whopping difference of 1,301.39%!

(c) Geocities offered each of its common shares at a price of $17, when it launched its initial public offering on August 11, 1998. At closing time, the price had gone up by 122.79% or $37.88.

(d) Then we have Broadcom offering each common share at $24. This was on April 17, 1998. By the time it closed, the IPO had gone up to $112 per common share (an increase of 366.67%).

(e) Each common share of 24/7 Media was priced at $14 on August 14, 1998. The closing value was $25.88, an increase of 84.82%.

(f) The final noteworthy entrant to IPOmania was Broadcastcom! Valued at $18 per common share on July 17, 1998, the price went up by 294.44% at closing time–it was $71 per common share!

Chantay asks:

Opalesque, the world’s largest subscription-based publisher on alternative investments, hosts a Webinar: The Monetization of Hedge Fund Management Firms on July 10th 2008 10 am New York time.

Registration is now open and qualified participants (see below) can register here:

www.opalesque.com/index.php?act=static?=webinar

Traditional Ways to Partially Monetize A Hedge Fund Management Company

There are five methods to partially monetize interests in a hedge fund management company:

(1) a traditional IPO

(2) a reverse merger into a public shell (or SPAC)

(3) a listing on AIM, without any capital being raised

(4) selling less than 100% of the equity or

(5) selling a revenue interest.

Examples of traditional IPOs would include Man, Och-Ziff, Gottex, RAB Capital; BlueBay, Polar, and Ashmore (plus Fortress, Blackstone, and Partners Group, if extended to alternative asset managers). These should not be confused with the IPOs of publicly traded closed ended funds.

Examples of reverse mergers would include GLG and Asset Alliance. Examples of an AIM listing without raising capital would include Absolute and Charlemagne. An example of a partial sale would include Highbridge and examples of revenue interests would include AQR, First Quadrant, Avenue, Lansdowne, Winton, and most firms backed by seeding platforms.

With the exception of Man and the Partners Group in Switzerland, each of the IPOs has been a disappointment relative to their initial public offering price. As for Reverse mergers, GLG has not been a success thus far, even after GLG coughed up nearly $500 million in slippage to get the deal done. The Asset Alliance – Tailwind reverse merger which was announced nearly 5 months ago has gone radio silent, which is not a positive sign.

AIM listings without raising capital lack a third party value validation when offered to the public and Absolute has been nothing short of a disaster, while Charlemagne is off more than 50%. Selling less than 100% of the equity or a revenue interest seems to work best, but a minority equity stake often imposes restrictions under which hedge fund managers chafe, while revenue interests do not. Whether a less than 100% equity stake or a revenue interest, each method still begs the question of how to monetize the rest of the ownership.

Selling Out

The only way to fully monetize a hedge fund management business is to sell out. Unfortunately, a total sale usually ends up with the sellers leaving at the first opportunity and the buyer usually has great difficulty in maintaining the value that it purchased. Examples of this include Glenwood, RMF, HBV, and Old Lane. As such, buyers will naturally be(a)ware and pricing will usually be lower than in other industries as a result.

Creating a Reinsurer or Bank and Merging Some or All of the Hedge Fund Manager into it

A new alternative is for the hedge fund manager to sponsor the creation of a reinsurer or bank that allocates all of its investable assets to the sponsoring manager, providing a significant amount of permanent capital for the manager (making the management firm more valuable) and producing significantly higher returns for investors than the manager’s funds without a proportionate increase in risk. Once the reinsurer or bank is fully developed, it can acquire some or all of the hedge fund management firm.

In this manner, the monetization process is able to benefit from many of the better points of other monetization alternatives. For example, it permits a total sale (without the normal problem of loss of control) and creates a public market for the interests of the hedge fund manager, but as a reinsurer or bank, rather than as an asset manager (which probably means higher market multiples). Carefully crafted, the transaction can be structured on a very tax efficient basis, particularly if partnership taxation for publicly traded managers or deferred compensation for offshore funds is lost.

While this alternative is yet unproven, it is more or less how Warren Buffett transitioned from being a hedge fund manager and monetized his asset management business. This summer a $15 billion hedge fund manager is likely to announce a merger with a Swiss private bank as the first step in a similar process.

Our Panel:

Joseph K. Taussig is the Founder of Taussig Capital and has acted as a merchant banker for numerous financial services startups since 1990. Most of the capital for these companies has been provided by the hedge fund industry or hedge fund investors and most of the startups invest their assets in hedge fund strategies.

Matthias Knab, Director of Opalesque Ltd, will moderate this webinar. Matthias Knab is an internationally recognized expert on hedge funds and alternatives and has frequently served as chairman of hedge fund conferences in New York, Tokyo, Shanghai, Hong Kong, Miami, Bahamas, Stockholm, Dubai etc. In addition, he has presented or moderated at hedge fund events in Sydney, Cape Town, Madrid, and Bombay, and lectured at numerous universities on the subjects of hedge funds and the state of the global alternative asset management industry.

Limited to founders (or partners owning more than 15%) of hedge fund or FoHF management companies

Participation in the Webinar on July 10th at 10 am New York time is limited to founders (or partners owning more than 15%) of hedge fund or FoHF management companies who would like to learn more about creating a reinsurer or bank in order to generate significant amounts of permanent capital and provide superior returns (without a proportionate increase in risk) for their investors. Provided that a founder or 15% partner is present, additional colleagues from the hedge fund or FoHF management company may also participate.

Registration is now open and qualified participants can register here:

www.opalesque.com/index.php?act=static?=webinar



About Opalesque:

Since February 2003, Opalesque is publishing Alternative Market Briefing, the premium news service on hedge funds and alternatives. The launch of these Briefing was a revolution in the hedge fund media space (”Opalesque changed the world by bringing transparency where there was opacity and by delivering an accurate professional reporting service.” - Nigel Blanchard, Culross) combining proprietary news with the “clipping service” approach of integrating third party news. Each week, Opalesque publications are read by more than 400,000 industry professionals from all over the globe.

Opalesque is the only daily hedge fund publisher which is actually read by the elite managers themselves (www.opalesque.com/op_testimonials.html). For more information,

please go to >> Hedge funds news