Pisces’ first birthday was an intimate affair
The faint pop of a champagne bottle was heard in the Square Mile a few days ago, marking the first anniversary of the LSE getting a licence for Pisces – the private securities venue providing liquidity to fast-growing firms. As celebrations go, it was an intimate affair.
Over the past year, just three businesses have signed up to the LSE’s Pisces – AI firm Wayve, fintech Moneybox and an abstruse ownership structure that sits above Oxford Science Enterprises. Between them, they have pulled off a mammoth four share auctions.
Why have things been so quiet? Uncertainty triggered by the Iran war hasn’t helped, for one thing, and there is a similar sluggishness in the IPO world. For another, member firms have leaned towards a liberal interpretation of ‘intermittent’ – the ‘i’ in Pisces – which stipulates they don’t have to hold auctions with any great frequency. The Oxford Sciences auction takes place just once a quarter, while the Wayve and Moneybox auctions were a Hotel California-esque ‘one-off’: if you bought in, you may never leave.
But maybe it was naive to expect a flurry of activity.
We’re coming up to another great financial anniversary: the 20th of GSTrUE (you’re forgiven if you don’t recognise it). GSTrUE, which if nothing else deserves a prize for the acronym’s awfulness, stood for Goldman Sachs Tradable Unregistered Equity platform and was the eponymous bank’s attempt at a similar offering: provide liquidity events for firms that don’t want to IPO.
It opened its doors to customers in early 2007 and landed big early wins: two of the sexiest private investment firms on Wall Street, Oaktree and Apollo, who between them raised over $1bn (you can’t raise anything on Pisces). That lifted hopes that GSTrUE could become a major force in the market. But it wasn’t to be.
“There was one problem: No one showed up to trade on the exchange,” The New York Times wrote in 2012.
Goldman executives who created GSTrUE thought a liquid market would develop among qualified investors. They were wrong. Investors in both Apollo and Oaktree who bought shares on GSTrUE found few, if any, buyers, for their stock when they wanted to sell.
“To say that our shares traded by appointment is putting it generously,” said one executive whose company listed on the exchange.
This much is GSTrUE
In the end, Apollo and Oaktree were the only two firms that ever joined GSTrUE. Apollo moved over to the public markets in 2011. The last man standing, Oaktree, followed soon after, tail between legs. And with that, Goldman were GSThrough with GSTrUE.
To be fair to Goldman, its market was also a victim of circumstance. The launch preceded the financial crash by mere months, after which markets everywhere seized up.
But aside from having one (!) more member, and a more palatable moniker, it’s hard to see what Pisces has that GSTrUE lacked. Someone, somewhere at the LSE needs to breathe some life into this thing before it suffers the same fate.