The private placement platform being developed by technology specialist ACE in partnership with NYSE Euronext will offer private companies a suite of IR tools.
Peter Williams, chief executive officer and president of ACE Group, hopes an increased capacity for IR will aid in creating a more efficient and transparent private market.
‘When we set up ACE, we wanted to make the transaction management process more efficient,’ he explains. ‘Usually you have to go through a couple of people on a capital markets desk and over the telephone – it’s not the best way to market transactions or get the best pricing for more clients or even broader distribution among investors.
‘We asked what we could do – especially once the transaction is completed – and how private companies act on an ongoing basis. Our thoughts were very much that we’d already built the document management and transaction platforms, and we shouldn’t stop there.’
ACE will continue to develop the existing platform in conjunction with NYSE Euronext, with branding and marketing responsibilities shared between the two. Williams hopes the private marketplace – built upon ACE’s existing private platform – will begin to mirror some of the efficiencies formed on the public exchanges.
‘Privately listed companies are becoming more prominent, particularly in the US and especially since the limit for private shareholders was expanded from 500 to 2,000,’ he says. ‘A lot of firms are realizing they have to reach out to a broader group of investors on a more regular basis and in a more transparent manner.’
In light of this, Williams hopes to expand exactly what the ACE and Euronext platform could offer. ‘We’re looking to implement an ongoing suite of IR tools,’ he says. ‘Issuers will hopefully use these on a regular basis to work with the investor pool, allowing them to interact with companies and potentially ask them questions directly, for example.
‘We are in the process of designing and engineering it at the moment; the aim is to be launching within a year. It was a fairly intuitive decision: we spoke with some private companies and potential users of the tool and got a great deal of positive feedback.’
Williams himself comes from a distinguished investment banking background, having raised $13 bn across energy, aerospace, chemicals and other sectors through a number of transactions, involving equity, debt and structured products.
‘I’m also on the board of a publicly traded company, so I’m aware of the professional issues surrounding IR,’ he says. Chief among those, he adds, is recognizing that investor interactions last far beyond just a trade, and continue ever after. This is particularly important on the public side, he says, where IR tends to be focused.
‘Obviously, there are benefits to being publicly traded or privately held – there can be a lack of liquidity in the private markets, a situation we’re hoping to improve with some new features,’ Williams notes. ‘Overall, there’s been an expansion of the US private capital markets over the last few years and, on a new issue basis, they are roughly the same size as the public markets. We hope that, fundamentally, we can add a lot of value to the private markets.’
