Julius Baer funds management IPO to be one of few


The decision by Julius Baer Investment Management executives to take the firm public likely will prove the exception and not the rule among asset managers looking to raise capital, investment bankers say.

Lower valuations and a volatile market are likely to scare away most investment managers who were considering an initial public offering to raise capital or cash out senior investment staff. Instead, those managers might seek a merger, shelve IPO plans until the market improves or take advantage of a special purpose acquisition company.

Earnings before interest tax and amortization multiples for asset management firms are down 16 per cent since September, according to data from Grail Partners. “You’re looking at [valuations] being down 10 per cent to 30 per cent,” said John Siciliano, a managing partner with Grail. “I’m perplexed as to why anyone would decide to do this right now.”

Given market conditions, the timing of the IPO from Julius Baer surprised many in the investment banking industry. It was rumored last summer that Julius Baer Holdings, the money manager’s Zurich-based parent, might float the company publicly after talks with other money managers wanting to acquire JBIM fell through. That was before the markets, and valuations, fell. “Only the strongest should tackle this market for the right IPO,” said Elizabeth Nesvold, founder of investment banking boutique Silver Lane Advisors.

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