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Unlisted Securities (Private Liquidity Programs)

Tuesday, April 05, 2016

In the current unlisted securities environment, investor wealth can be effectively created by private liquidity events that enhance Company valuation without compromising controls and accuracy.

Very few Companies make it easy for outsiders (non-shareholders) to buy equity. Therefore investors usually have to rely on a well-connected network to access privately held shares often directly from Companies.

Unlisted Companies are generally waiting longer to go public (i.e. listing on ASX, NASDAQ, AIM) which can greatly frustrate stakeholders (often the cornerstone investors, employees and early VC Series investors) looking for a liquidity event and orderly exit.

This results in a number of challenges, not only to cater for shareholder liquidity but competition to recruitment terms, retention of in-demand employees and raising large amounts of capital across a wider shareholder registry.

Companies could best manage such circumstances by the benefits of a formal, private liquidity program as to prepare for capital needs over the business life cycle.

PrimaryMarkets has developed relationships with many leading companies, financiers and professional advisers to better manage capital preferences and legal processes for securities sales.

Through both Intermediary relationships and direct Buyer Memberships, PrimaryMarkets has assembled a large and ever-growing network of Buyer Members who are Professional/Wholesale/Institutional investors looking to deal in securities in unlisted companies.

PrimaryMarkets removes the guess work for Professional/Wholesale/Institutional Investors and cumbersome market navigation for Sellers.

By our focus, experience, relationships and seller empowerment, PrimaryMarkets has is the preferred resource for Sellers of securities (shares, options etc) in unlisted Companies.

Subsequently, the PrimaryMarkets platform delivers a ‘healthy’ marketplace and serves as the premier channel to participate dynamically in unlisted company pre-IPOs, option schemes as well as the new issue of securities (i.e. new capital raisings).

A number of Companies across global capital markets were overwhelmed by investor interest in pre-IPO securities such as:

  • Facebook (NASDAQ.FB) – From 2007 to 2012 IPO – ~US$500M in value of shares was transacted pre-IPO from employees and original investors in off-market transactions.
  • Murray Goulburn (ASX.MGC) – July 2015 – IPO raised ~A$500M on market capitalisation of ~A$2B yet no market was established to permit Pre-IPO shareholders a liquidity event prior to having escrow/restrictions placed on their shares.
  • Atlassian (NASDAQ.TEAM) – December 2015 – Australian company listed on NASDAQ raising~A$550M on market capitalisation of ~A$5.6B. In 2014 strategic investors acquired shares valued then in excess of A$50M from employees and original investors in Atlassian in off-market transactions with buyers willing to accept escrow/ restriction limitations.

 

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