Private equity firm Bridgepoint has seen its shares soar higher after kicking off its stock market debut with an initial £2.9 billion valuation.
The group, which was spun out of NatWest bank in 2000, set its initial public offering (IPO) price at 350p a share for the start of conditional trading on Wednesday – pricing the stock at the top end of the 300p to 350p estimated range.
But shares quickly surged, jumping by more than 25% to around 440p in early trading.
Bridgepoint raised £300 million of new money from the listing, which will be invested in growth plans, the next generation of funds, acquisitions and to allow it to pay down debts.
Unconditional dealing in Bridgepoint shares will begin on Monday.
Bridgepoint joins a small band of listed European buyout groups, including FTSE 100 firm 3i Group, and comes amid a boom in private equity deals.
But the flurry of private equity activity is coming under increasing scrutiny as concerns mount that the sector is taking advantage of cheap prices following the pandemic and Brexit woes, with takeover targets then left with high debt levels as part of acquisitions.
Supermarket Morrisons has become the latest to agree to a proposed private equity buyout.
Bank of England Governor Andrew Bailey last week sent out a warning shot over the spate of private equity deals, saying that highly leveraged firms are “in a much less resilient position when a shock comes along”.
Bridgepoint, which was formerly NatWest’s Equity Partners division, largely invests in firms worth up to around 1.5 billion euros (£1.3 billion) in the so-called middle market investor sector.
One of its most well-known investments was sandwich chain Pret a Manger, which it owned for 10 years before selling to investment group JAB Holdings in 2018.
It also recently took a minority stake in Itsu, understood to value the Asian fast-food chain at £100 million.
Bridgepoint will provide investment to help fund the expansion of 100 new Itsu sites and create 2,000 jobs in the UK as part of the deal.
The buyout firm has more than £23 billion in assets under management and a network of 10 offices across Europe, the United States and Asia.
It has 43 partners, more than 300 employees and some 170 investment professionals.