Buyout barons get set to sell if Remain wins referendum

PRIVATE equity firms are gearing up to sell big chunks of their stock market investments if London’s markets rally following a vote to remain in the EU.

Lock-up periods, which prevent firms from selling shares for a certain period, ended for a string of big private equity-owned firms in April and May but firms decided not to sell because of the uncertainty over the referendum.

Bankers are now lining up a wave of so-called block trades — when big chunks of company shares are sold all at once — for private equity firms who own stakes in listed companies if Remain wins on June 23.

“A number of houses are looking to do big block trades. There will be two- or three-week window after the referendum when everyone is calmer,” one banker said.

Jittery markets and uncertainty over the outcome of the vote has put a dampener on bullish sentiment since the vote was announced in February.

UK block trades have been held back and are roughly flat for the January to May period at about $10 billion (£7.15 billion), according to Dealogic figures.

Things are worse in Europe where block trades have slumped 82% for the year ending May to around $30 billion.

One likely contender which could see a share sale is £5.5 billion FTSE 100 giant Worldpay, 28% co-owned by buyout firms Advent and Bain.

Its lock-up ended on April 13 although it did sell £740 million worth of shares in a placing on April 7 after obtaining a waiver from the underwriters. Advent and Bain are now free to sell shares without a waiver after the lock-up period ended.

Insurer Hastings, majority-backed by Goldman Sachs’ private equity arm, and Bain-owned brick-maker Ibstock have also seen their lock-ups come and go.