How a $70B Fund Manager Thinks About Investing in IPOs 💵

IPO Considerations - The quality of the underlying asset and its potential value in 5 years are key factors [1] - Liquidity in the IPO is important, specifically the float size (millions or billions) [1] - Percentage of floating shares and lockup terms are crucial for participation [2] Key IPO Factors - Larger IPOs are preferred, enabling the acquisition of a significant position [2] - A higher percentage of publicly floating shares is better for price discovery [3] - A higher percentage of publicly floating shares reduces volatility and susceptibility to manipulation [3] Lockup Periods - The presence and duration of a lockup period are important considerations [4] - Direct listings may not have lockup periods, potentially leading to faster price discovery [4] - A minimum of 20% float is preferred to avoid volatility [4]