Wednesday, 9 November 2011

Could ETF Securities IPO soon?

For more than a year there has been talk that ETF Securities could list - it's the company which issues the physical gold ETF (PHAU) shares I own.

Back in August 2010 the rumours of an IPO came with a 12-18 month timescale which may have been lengthened after Glencore shares took a bumpy downward ride. But there's been a few listings since then - two of them gold miners (FT Alphaville: Golden Opportunity for FTSE ) - so will ETFS be thinking about it again?

The LSE's full list of companies that have listed this year only goes up to september (the chart shows those on the main market not AIM). It leaves off Evraz (£4.7 billion) Polymetal (£3.5 billion) and Polyus () all three of them potentially in the FTSE 100.

Alphaville's reasons why investors might like Polyus and Polymetal were given by Andrew Jones of Renaissance Capital who "predicts a (gold) price of $1,825/oz in 2012, $1,900/oz in 2013 and $2,000/oz in 2014, and he remains bullish over the long term predicting a price correction to $1,450/oz (higher than the consensus of $1,200/oz)"

But there are lots of concerns about governance and, in comparison, ETF Securities is not in Russia, has $28 billion under management and as the gold price increases so does the value of it's 0.39% charge for the gold ETFs - as does the likelihood of more people buying their products.

Some details from the Financial News story: Back in April US venture capital group Millennium Technology Value Partners bought a 10% stake in ETF Securities for $70 million.

Apparently venture capitalist firm FTV Capital paid $10m for the same share in late 2006 "although a spokeswoman for FTV said it continued to be a significant investor."

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