Oct. 17 (Bloomberg) -- Liquidnet Holdings Inc., a trading platform used by institutional investors to buy and sell large blocks of shares, hired social-media analyst Lou Kerner to run a new group focused on private companies.
Kerner’s team will provide research on fast-growing startups and help clients, including mutual funds and hedge funds, invest in those companies, New York-based Liquidnet said today in an e-mailed statement. Since June 2010, Kerner has managed the private companies research group at Wedbush Securities Inc.
Liquidnet joins a growing list of firms that are focusing on startups, following the growth of Facebook Inc., Twitter Inc. and Groupon Inc., which reached multibillion-dollar valuations without selling shares to the public. SecondMarket Inc. and SharesPost Inc. have emerged to let employees and stakeholders in startups sell shares to institutional investors, while firms like Greencrest Capital Management, PrivCo and VC Experts Inc. provide research and valuation analysis.
“There’s been a growing interest in this asset class,” Steve Greenblatt, the head of issuer servicers and equity capital markets at Liquidnet, said in an interview. “We expect our coverage to expand as more and more value is held in these rapidly growing private companies.”
Trading to Surge
So far this year, 143 companies have held initial public offerings in the U.S., according to Bloomberg data. While that’s up from 133 a year ago, it’s 64 percent below the number of deals priced at the same time in 2000.
Trading of privately held companies is likely to surge 51 percent to almost $6.9 billion in 2011 from the previous year, according to Nyppex LLC, a New York research and advisory services firm. Facebook, the world’s biggest social-networking site, is valued at $68.2 billion on SharesPost, making it larger than 66 of the 74 companies in the Standard & Poor’s 500 Information Technology Index.
Kerner, 50, is being joined by Michael Silverstein, who had been a researcher in Wedbush’s private companies group since March, according to his LinkedIn profile. They will both be based in New York and Greenblatt said the team will add more people next year.
As of the end of 2010, Liquidnet had 637 institutions using its platform, with an average of $20 billion in assets under management, and the company offered trading in 39 markets worldwide, according to its website. The private shares group will be part of Liquidnet’s equity capital markets group.
“We really think the companies we’re working with today are changing the world in a dramatic fashion,” Kerner said in an interview. “They’re disrupting industries and they’re creating significant shareholder value. We think we’re at the beginning of a long run.”
--With assistance from Nina Mehta in New York. Editors: Marcus Chan, Nick Turner
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