Sagicor Select Fund IPO- Delay in Submission of Details and Basis of Allotment

July 07, 2019

via Jamaica Observer

The principals of Sagicor are confident that its Select Funds Limited initial public offering (IPO), which opened on Wednesday, will achieve its intended $4-billion-dollar subscription target.

The IPO is seeking to raise $2.5 billion (with a right to upsize by an additional $1.5 billion) through the purchase of Class B ordinary shares in the Sagicor Financial Select Fund, at a price of $1 per share with a minimum share purchase of 1000. There are currently 23 financial companies' stocks that make up the Sagicor Financial Select Fund.

Confidence in the IPO was buoyed by the feedback coming from Tuesday's investors' briefing, which was organised a day before its opening by Sagicor Investments, the lead arranger and lead broker for the IPO.

The gathering of investors expressed overwhelming support for the IPO, signalling their intention to invest in the Financial Select Fund, which provides investors with the opportunity to benefit from investing in a pool of assets from a range of financial companies listed on the Jamaica Stock Exchange (JSE).

The Sagicor principals are optimistic that based on the anticipated take-up, the IPO will close before its July 17 schedule.

Sagicor Group CEO, Chris Zacca was himself beaming in confidence that the offer will be a success, urging the investing public to subscribe in Jamaica's first listed equity fund under the Sagicor Select Fund family, which will allow them to tap into the financial sector that has been experiencing significant growth in the market.

In fact, stocks in listed financial companies have been among the best-performing on the JSE in recent years, Zacca declared, adding “we want the investing public to tap into the financial industry, which has a combined market capitalisation of nearly $1-trillion”.

“As lead arranger and brokers for this transaction, Sagicor Investments' main objective is to create, grow and preserve the wealth of all Jamaicans — and this for us is a very fitting move to bring together Jamaicans from all walks of life on this journey to financial security, and we hope to enroll thousands and thousands of Jamaicans in this IPO.”

Zacca told the audience “already we have seen significant interest, particularly among young people and young investors who have seen the value of this IPO. Listed equity funds are a great way for small investors or persons, who may be less risk-averse to investments, to come into the investment space and maximise their earning potential”.

He also spoke about the diversification of this IPO, with the funds being spread into investments in 23 financial stocks. For his part, CEO of Sagicor Investments, Kevin Donaldson encouraged investors to own a piece of the financial sector by investing in this IPO, which not only provides diversification but will preserve their wealth.

“Now is the time for Jamaicans to start creating wealth for themselves and this is the first step. more is to come, so you can look out to infrastructure as an asset class,” Donaldson told the investors' briefing, intimating that a similar fund is being examined utilising infrastructure as a tradable security.

As a sweetener for subscribing in the IPO, Donaldson disclosed that there will be no charges in management fees for this year. Sagicor Investments' manager of research and asset management, Renaldo Thompson, who also spoke at the briefing, explained that the proceeds of the IPO will go towards purchasing more stocks to make up the fund, thus providing even more diversification.

He spoke about the performance of financial stocks on the market, declaring that the returns have been very good over the years.