Fund manager calls for reform of IPO market

David Hellier
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BANKING fees for new company share issues should be aligned with a floated group’s share price several months after the first day of dealings, Sacha Sadan, director of corporate governance at Legal & General, said yesterday.

Sadan, whose firm manages £391bn of assets, said yesterday: “How come day one of the flotation is the day that we set the fees? We’re not saying the size of the fees is the issue; we just want it better aligned with a new issue’s stock market performance.”

Sadan’s comments are the latest salvo in the war of words that has been raging for the past couple of years between investors, investment banks and private equity owners, who are struggling to revive London’s moribund IPO market.

Last year there were only four main market IPO share issues, the lowest number since 2009.

Sadan said he also favoured smaller banking syndicates so that banks had more accountability and there might be more independent analyst research. “How do we get the market working again? It’s in everybody’s interest to sort this,” he said.

One executive of a company that intends to float shortly said: “We’d love to float in London but the London market’s been effectively closed for a long time.”