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Portfolio > Alternative Investments > Hedge Funds

PIPE Volume Broaches All-Time Peak

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NEW YORK (–Private investments in public equity, a type of company finance that has increasingly drawn hedge funds, came to more than $16 billion in the first half of this year in the United States, according to Sagient Research Systems.

If this flow continues, 2006 will break the record set back in 2000, when the annual value of PIPE deals in the United States totaled $24 billion. Since that zenith at the end of the technology bubble, volume has been lower. It was $20 billion in 2005, by Sagient data.

The research group reported that the top five investors by number of transactions were Nite Capital Management LLC, Iroquois Capital LP, Highbridge International LLC, Downsview Capital Inc., and Cornell Capital Partners LP. Among this group, Cornell Capital did the largest dollar volume of deals year-to-date, with about $186 million.

The top five investment banks active in PIPEs were Rodman & Renshaw LLC, Roth Capital Partners LLC, Cowen and Company LLC, Midtown Partners & Co. LLC and Sanders Morris Harris Inc.

Transaction count increased almost 12% and total amount raised increased 58% over the first half of 2005, according to Robert Kyle, executive vice president of Sagient Research.

“If this pace continues, 2006 should set new records for both number of transactions and total dollars raised in the U.S. PIPE market,” he said in a statement.

PIPEs started as financing for small U.S. companies but have in recent years been used to raise capital by larger businesses and firms in other parts of the world, including Asia and Latin America.

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Contact Bob Keane with questions or comments at [email protected].


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