After a strong nine months for new listings on the London Stock Exchange, a number of real asset-backed initial public offerings (IPOs) have struggled recently.
Last week, Aviva Investors pulled its IPO to raise 拢200m (鈧�226m) for a long-income real estate fund, the Aviva Investors Secure Income REIT.
The company cited 鈥渋nsufficient demand鈥�, and Renos Booth, head of real estate long income at Aviva Investors, said: 鈥淲e will give consideration to reactivating the proposed initial public offering at a later date.鈥�
The aborted IPO comes soon after the cancellation of the listing of M7 Multi-Let REIT, which was seeking to raise up to 拢300m in November.
Aberdeen Standard Investments, however, succeeding in listing its European logistics REIT, albeit missing its 拢250m fundraising target by 25%.
The Aberdeen Standard European Logistics Income is designed to tap into the rapid growth of e-commerce across Europe by investing in logistics properties such as large 鈥榖ig box鈥� warehouses and local 鈥榣ast mile鈥� distribution centres.
Martin Gilbert, co-chief executive of Aberdeen Standard Investments, said at the time: 鈥淭his is the first investment trust launch by Aberdeen Standard Investments and to have raised 拢187.5m is an excellent result and delivers a strong platform from which we can grow this exciting asset class.鈥�
In a note, Numis Securities said the London IPO market had been strong this year after an uncertain 2016, during which there were only six launches. Despite continued political uncertainty, 18 new issues had raised gross proceeds of 拢3.35bn by 20 September, according to Numis. The pace of new issuance was particularly strong in the third quarter 2017, with eight IPOs raising 拢1.84bn.
Numis said there had been 鈥渢ough conditions鈥� in the fourth quarter, saying it was easier to raise secondary capital for existing funds today.
鈥淭his is because there are a relatively limited number of institutions that are able to cornerstone the launch of a new issue.
鈥淭he major multi-asset investors appreciate the benefits of the closed-end structure in specialist asset classes. However, they are wary of illiquidity and increasingly want vehicles to be at least 拢200m.鈥�
The 拢200m threshold was often a 鈥渢all order鈥�, Numis said, 鈥減articularly for funds investing in asset classes that are unfamiliar to most investors鈥�.
Last month, a new infrastructure fund run by former John Laing Infrastructure Fund advisers, said it was looking to raise 拢200m by listing in London. Tri-Pillar Infrastructure Fund, which aims to invest in North American and European infrastructure, delayed its 8 December IPO.
Advised by an investment team led by Andrew Charlesworth 鈥� who co-led the initial public offering (IPO) of John Laing Infrastructure Fund in 2010 鈥� Tri-Pillar recently provided an update, stating: 鈥淭he company had been informed that there would be a grant of exclusivity by a vendor on a significant potential acquisition by the beginning of this week and the company therefore extended the timetable for the fundraise accordingly.鈥�
Tri-Pillar added that, despite the continued progress made by CAMG in developing the acquisition, due to the absence of any definitive outcome, the company has decided to postpone any further public fundraising activity until 2018 subject to market conditions.
With the exception of Aberdeen Standard European Logistics Income, there have been no successful IPOs during the fourth quarter to date. But there could yet be more real asset-backed IPOs before the end of the year.
Numis said it was aware of two other IPOs being promoted, including Tufton Oceanic Assets, which is seeking to raise more than $100m (鈧�84.9m) to invest in second-hand commercial sea-going vessels.
The other is Greensphere Capital, which is seeking to raise up to $500m to invest in sustainable infrastructure. Both funds are due to start trading on 20 December.
