Equities desks are gearing up for the twice-a-year end of escrow blocks season, which coincides with reporting season and typically focuses on newly listed companies.This year, desks are getting in early, asking fund managers for early indications of interest, so they have a better feel of what’s hot and what’s not heading into escrow end dates.
Most of the contenders are at the small caps end of the market, where liquidity’s been hard going for institutional investors in the past six months and they’re looking forward to a “liquidity event” or two in coming weeks. The spotlight will be on Australian Clinical Labs, where Crescent Capital Partners has about a $100 million stake, BestAt the bigger end of the market, brokers are watching Coles Group, where Wesfarmers has a $600 million toehold stake, Dalrymple Bay Infrastructure and Ventia Services .
Blocks are big business for the equities desks and equity capital markets teams. While they’re competitive, risky and don’t normally attract hefty fees, are important to show fund manager clients that the desk’s hungry and can be handy for league table credit. co-edits Street Talk, specialising in private equity, investment banking, M&A and equity capital markets. He has 10 years' experience as a business journalist and worked at PwC, auditing and advising financial services companies.