Wednesday, 30 July 2014
Last updated 10 hours ago
Oct 7 2010 | 12:30pm ET
The price finally right for investors, Ellington Management has managed to secure enough buyers for the initial public offering of its three-year-old subprime mortgage fund.
Underwriters Deutsche Bank and Cantor Fitzgerald appear to have drummed up enough buyers to ensure that the Ellington Financial IPO is pre-sold. But the oft-delayed offering is much smaller than originally planned: When Ellington chief Michael Vranos announced its launch, he said he hoped to raise $750 million in permanent capital for it. An aborted IPO 10 months ago sought $208 million. Today, the fund hopes to raise $108 million.
Still, Ellington appears to have done well enough. Bloomberg News reports that the shares sold for between $22 and $24 for an average discount of about 9.1% to its claimed book value of $25.31 per share. That’s substantially more than anchor investors Legg Mason, which owns 21% of the fund, and FBR Capital Markets, which owns 12%, value their stakes at.
Most of the proceeds of the IPO are to be for investments.
Ellington Financial managed $246 million at the end of June. The fund returned 43% last year and is up 7.3% this year.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…