Premier Asset Management (PAM:AIM) has enjoyed a decent start to its second life as a quoted business with its shares rising just over 3% to 136.5p.
The fund manager’s IPO (initial public offering) was priced at 132p and it raised £47.4m of new money.
The cash will be used to repay principal and accrued interest of its preference shares, meaning Premier is substantially ungeared. A few pre-IPO investors have sold a further £16.3m worth of shares as part of the AIM admission.
The £140m asset manager hopes to pay dividends every three months, making the stock appealing to income investors, although it is not yet clear as to the potential dividend yield for the stock.
The business had £5bn of assets under management as of the end of September 2016.
Premier is best known for multi-asset funds and its brand is becoming well known in the retail space.
It reckons the business ranked sixth in terms of total UK retail fund net sales in the first half of 2016.
Most of its revenue comes from ongoing management fees. It manages 23 retail funds, two segregated mandates and two investment trusts. Most of its investments are in equities, including 40% in the UK market.
The company’s history dates back to the late 1980s when Premier Fund Managers was established as the asset management subsidiary of an investment advisory business.
Premier Asset Management Limited floated on AIM in 1997 and stayed on the junior market until 1999 before moving to the Main Market for six years and then returning to AIM in 2005. It delisted in 2007 as part of a management buyout.
It subsequently shut down low margin areas of the business and bought the management contracts of two fund umbrellas from Aberdeen Asset Management (ADN) including 10 funds with £850m of assets under management.