Hope you did that capital raise while you were able to…
I won’t say that the capital window is slamming shut, but I’m starting to hear and see the signs that it’s creaking slowly shut after being as wide-open as a barn door for the last 9 months or so.
Everyone who wanted to could raise funds over the last year – equity, debt, preferreds, it almost didn’t matter.
Casinos got revolvers reopened and refinancings done, REITs sold more bonds, banks did monster secondary stock offerings…you name the ailing industry, big money came out to play.
This is too recent a development for me to quantify. As recently as Monday, they were crowing about how this could be a $2 billion dollar week for new issues alone. I have no data to support my sense that the window for raising cash is beginning to shrink, but I am getting word that recent closed-end fund and unit investment trust offerings have fallen flat here on The Street of Dreams. I’m guessing that the data and newsflow will be surfacing to back me up shortly.
What I can tell you is that IPOs are jamming into the doorway Three Stooges-style – and when that happens, its hard for anyone to get through.
Ron Burkle, the billionaire investor who runs the Yucaipa hedge fund, has had to slash the price for an Atlanta-based REIT and warehouse operator he’s bringing public shortly. A Chinese shipping company had to cancel a deal they were hoping to open in Singapore. Another Chinese IPO, Charm Communications ($CHRM), was a floperoo on its open earlier this week. When anecdotes like these begin to add up to actual datapoints, the word gets out and people stop taking meetings and roadshow presentations.
If you listen closely, you may hear what I’m hearing. The capital window is the truth.