Foreign Investors Stand To Gain $8B With Ant Group’s IPO

Ant Group’s pending IPO could spell a multibillion-dollar payday for a small and elite group of foreign investors, who bought a stake in the giant Chinese FinTech two years ago, The Wall Street Journal reports.

Some of the top investors pumped $500 million each into Ant Group, including the “sovereign-wealth funds of Singapore and Malaysia, the Canada Pension Plan Investment Board and private-equity firms Silver Lake, Warburg Pincus, Carlyle Group and General Atlantic,” the Journal reports, citing Ant’s listing prospectus.

A trio of top mutual fund managers – Fidelity Investments, Rowe Price Group Inc. and BlackRock Inc. – plunked down anywhere from $200 million to $500 million apiece, the WSJ reports.

All told, the foreign investors pumped $10.3 billion into Ant in the summer of 2018 as part of its third round of funding. The choice of investors was also highly selective, with Ant rejecting offers from those who had previously backed rival Tencent, the WSJ reports.

Now that same group stands to make as much as $8 billion, with investors in Ant poised to reap an 84 percent return based on the proposed share valuation of the IPO, according to the Journal.

Ant is expected to raise more than $34 billion through what is likely to be a record-shattering IPO, with pricing of its shares pegging the fast-growing FinTech’s value at $313 billion, according to the WSJ, which notes that is more than double Ant’s value in 2018.

“It is unusual for investors to put in so much money and make big returns so quickly,” Min Lin, a founding partner at NewQuest Capital Partners, a firm that provides liquidity solutions to private-equity funds, told the Journal.

“Ant’s earlier fundraising was very tightly controlled, and everyone who got to invest earlier was selected by Ant’s management because of their status or their strategic importance to the company,” Lin added in her comments to the WSJ.