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Published 27 September 2013 10:16, Updated 30 September 2013 09:40
Mark Rowsthorn is looking to raise $155 million when he floats McAleese Transport. Photo: James Davies
Here’s a good basic rule for entrepreneurs and even investors: it pays to watch the rich.
When the rich start selling assets en masse, it’s generally a sign that the top of the market is approaching.
When a number of wealthy entrepreneurs start buying assets in a particular market or sector, it’s a sign that the market has bottomed.
And when the rich start taking their companies public, it’s a good sign that growth is well and truly on the agenda.
The last week has seen a spate of wealthy entrepreneurs take steps towards floating their companies, including:
Overseas, the floats of Chinese e-commerce giant Alibaba and Twitter will also mint billionaires.
There are a few reasons for this rush of floats. After a relatively weak period on IPO markets over the last 18 months, low interest rates have investors chasing returns – and they are more prepared to take a punt on a new listing. Private equity firms, which have found it difficult to engineer IPO exits in the past few years, are clearly pleased the door has opened.
But the preparedness of these wealthy entrepreneurs to tap the market for growth capital is a good sign.
While the wider economy is waiting to see if the post-election spike in consumer and business confidence can be sustained, the rich are putting their growth plans into action, looking to expand while asset prices remain low and some competitors are weak.
It’s not exactly proof that the good times are here, but this spate of floats backed by wealth entrepreneurs shouldn’t be ignored.