Key Points
Some investors in US initial public offerings are demanding rules what they see as unequal treatment in the rules around how stock is allocated to so-called cornerstone investors in new listings..
An overwhelming 87% of 62 institutional investors said anchor investors who agree to buy IPO shares before the offerings are sold to a broader group should be required to hold onto their shares for a specified period after the listing, according to a KKR Capital Markets survey in December..
In several prominent recent US listings where the companies chose to involve so-called cornerstones, no such restrictions on selling were imposed..
While bankers touted the benefits of having such investors on board as providing added confidence and stability for the deal, and there have been no indications that anchors sold down their stakes, companies such as Arm Holdings Plc and Birkenstock Holding Plc still saw choppy trading after their debuts..
For those companies that come to market with anchor investors, it will be important to see those anchors put their money where their mouth is, with a true lock-up structure in place to ensure alignment with new investors," said David Bauer, head of KKRs public equity capital markets business..
