Portfolio Stock Exchange bets on uptick in PE fund listings 

While listing a closed-end fund is not the norm, it is now a viable option and can provide a differentiating factor for fund managers' vehicles, Navarro said. Portfolio’s new proposal for reduced costs and fewer intermediaries would help, he added. “Before the end of the year, we will launch several examples of closed-end funds to demonstrate the value provided by the admission to trading of these investment vehicles considered illiquid,” the executive added. 

The Madrid-based company believes that being listed on PSE improves transactionality in the event that any participant wants to sell all or part of its holding before the fund's maturity makes the fund more attractive to investors, the CEO said. 

Listing a fund on PSE while it is raising capital would be more efficient as the Exchange would act as a bookrunner and facilitate the onboarding of investors, Navarro said. But there would be no problem in listing a fund that is already fully subscribed, he added. 

Limited partners (LP) would be able to sell their units of any closed-ended alternative investment funds (AIF) listed on PSE, the executive said. Once listed, the fund’s participants will be able to enter 'buy and sell orders' on PSE to seek liquidity for their units, he added. “This mechanism improves the marketability of funds and makes it easier for fund managers to attract investors with different investment horizons,” he added. Whether the fund is newly created or an existing fund, the adaptations to be made to the fund prospectus are minimal and simple to include, he added. 

The new stock exchange market is starting to look for Spanish closed-ended funds of EUR 40m-EUR 120m in size to be listed on it, Navarro said. PSE is focused on direct lending, infrastructure, ship and aircraft financing and renewable energy investment vehicles, he added. 

The firm is in the launch phase of the stock exchange and its goal is to gradually add retail and professional investors, family offices, private banks and high net worth individuals to the client base that could subscribe to and buy funds from PSE’s web platform, Navarro said. 

The admission to trading of AIF facilitates their national and international distribution, improving their eligibility among retail, professional and institutional investors, Navarro said. 

The possible future funds listed will mainly be backed by institutional and professional investors, but since PSE provides broker and custodian services, even retail investors from anywhere in the world could subscribe directly to the funds from its website, Navarro said.  

PSE was founded four years ago by Navarro and Mariano Torrecilla, as reported by Unquote sister publication Mergermarket. It has raised EUR 6m-EUR 7m since its foundation and will assess listing itself on its own platform in two years’ time. 

The company is supervised by the Spanish National Securities Market Commission (CNMV), it has a Multilateral Trading Facility (MTF) license, and it has also a license for cash and securities custody, order execution, and placement, as reported. 

The stock market has a pipeline of close to 40 corporates that are interested in going public, and it is mainly focused on Spanish Real Estate Investment Trusts, family-owned companies, tech companies, hedge funds or private equity funds. 

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