Kay McCarthy, Head of Jersey Office at The International Stock Exchange (TISE), explores the introduction of an innovative service for private companies and the potential for wider application across private markets.
TISE operates a well-established and highly respected public market for bonds and equities and now we’ve expanded our product and service suite with the addition of a new offering for the private markets.
It is no secret that there is a continuing trend for companies to stay private or cancel their quotations on public markets.
"...data from McKinsey shows that the total private markets assets under management reached $11.7 trillion as of 30 June 2022, growing at an annual rate of nearly 20% since 2017."
In 2022, PWC stated that private markets are expected to make up more than 10% of global assets under management by 2025. At the same time, data from McKinsey shows that the total private markets assets under management reached $11.7 trillion as of 30 June 2022, growing at an annual rate of nearly 20% since 2017.
However, with this has come a rapid development of technology to enable the automation of transaction workflows. Investors in private companies, who can include venture capital firms, private equity firms, family offices and high net worth individuals, are seeking solutions to enhance price discovery, maximise liquidity, create exit events and improve conflict and risk management practises in a cost effective, technology driven way.
TISE Private Markets
TISE Private Markets provides unlisted companies with access to an integrated set of tailored electronic trading, settlement and registry solutions, enabling companies to have full control of their dedicated marketplace.
We have conducted significant market research to develop this unique offering which we believe will be a highly attractive proposition to privately owned companies with a proven track record looking to improve the liquidity of their shares and also attract potential new investors.
The key characteristics of TISE Private Markets:
- Company controlled marketplace – Companies have full control of their dedicated market, from onboarding shareholders to scheduling auction events and managing registers;
- Bespoke auction model – The auction model, which leverages proven, state-of-the-art trading technology, concentrates liquidity, enhances price discovery and reduces price volatility;
- Seamless electronic settlement – Pre-funded orders mitigate counterparty risk and facilitate seamless electronic settlement of cash and shares which don’t have to be held in a depository (e.g. CREST);
- A solution for pre-emption rights – Existing shareholders of the company have first right of execution in an auction, with approved new shareholders only able to participate in any new surplus;
- All-inclusive, annual subscription fee – Companies pay a single annual subscription fee for the service and there are no intermediary charges, transaction fees or other commissions; and
- Safe and secure – A cloud-based service from an established market operator within a respected International Finance Centre.
TISE Private Markets has been established in conjunction with a pilot private company and we are continuing to innovate this service to facilitate transaction workflows across the broader private markets.
The launch of this offering represents a significant milestone in the execution of our strategy to diversify and scale up the business and is major landmark in both the history and future of the exchange.
This article was originally published in Jersey Evening Post's Investment & Funds Supplement, May 2023.