MARKET REPORT: New blow to Goldman Sachs as Petershill shares tank
The Hermes tie-wearing private equity group has enjoyed a bumper decade perched in its oak-panelled boardrooms, but in the last six months the rot has begun to set in firmly.
Soaring interest rates have made debt more expensive, while raising money in capital markets has dried up. Few will shed a tear, but the worry is that the consequences are starting to hit ordinary investors hard.
There was a rush into private equity while it was on the rise and many piled money into FTSE 250 companies such as Bridgepoint and Goldman Sachs-backed Petershill Partners, giving investors exposure to what is largely considered a closed shop.
The reasoning was fair, as fund managers and retail investors sought returns in a low interest rate environment and a lackluster FTSE. But the performance has been dismal.
Bridgepoint, which was spun out of Natwest Equity Partners in 2000 by William Jackson and former 3i (down 0.4 per cent, or 7.5p, to 1,993.5p) man David Shaw, has seen its shares fall 46 per cent since its IPO in 2021. But yesterday they rose 1.3 per cent, or 2.4 pence, to 191 pence.
Coup: Goldman Sachs still retains 76 percent stake in Petershill Partners
Things are even worse for Petershill Partners, which went public that same year. Yesterday, it said fee income for this year would be £168m, down from its previous forecast of £200m.
Petershill’s half-year results also failed to live up to expectations, posting profits of £54m, a sharp drop from the previous year’s £110m and almost a third less than analysts had expected. the City.
Unlike Bridgepoint, Petershill is not exclusively a private equity firm, but owns minority stakes in a number of firms, including Clearlake and Francisco Partners. It is also another drain on Goldman Sachs, as Petershill was founded by the bank’s asset management division in 2007. Goldman still retains a 76 percent stake and the banking giant must ask itself what it can do to gain some breathing room from the growing pressure on your boss. executive David Solomon ahead of another job cuts next month.
Petershill shares languish 56 per cent below the 350p price at which it joined the London Stock Exchange in September 2021, falling 14.5 per cent, or 25.4p, to 150p yesterday .
Elsewhere in the top flight, JD Sports rose to the top of the table after Berenberg said the fall in its share price this year looked “harsh”.
“JD is more than a retailer – it is a global brand that dominates the ‘mindset’ of the Gen Z consumer,” the broker gushed. The shares gained 2.6 per cent, or 3.5 pence, to 137.75 pence.
The next one was also in charge when Societe Generale gave the company the go-ahead.
Shares in the High Street retailer added 1.7 per cent, or 116p, to 7,108p.
GlaxoSmithKline was another notable climber, rising 4 per cent, or 56 pence, to 1,444.2 pence. The pharmaceutical group, led by Dame Emma Walmsley, was boosted after an industry report showed the value of the global vaccine market will reach £74bn in 2028, up from £45bn. 2022. Glaxo is the world’s number one vaccine manufacturer.
Overall, the FTSE 100 rose 0.5 per cent, or 36.47 points, to 7,478.19. The FTSE 250 gained 0.4 per cent, or 79.34 points, to 18,463.19.
But there were plenty of red ink in the final trading session of the week, including Melrose, who just a day earlier had announced that top brass would pull out.
The head of the aerospace business, Simon Peckham, is leaving next March after two decades, along with executive vice-president Christopher Miller and chief financial officer Geoffrey Martin. The shares fell 4.9 per cent, or 26.4 pence, to 510.8 pence.
Colostomy bag maker Convatec also lost out after its largest investor, Denmark’s Novo Holdings, said it had resigned from its board seat. The shares fell 2.6 per cent, or 6p, to 224.8p.