The key difference with OnMarket is that we are entirely broker agnostic and investors get access to IPOs, no matter who their broker account is with or which lead manager is conducting the IPO. In this fragmented market, it is rare for even the largest lead manager or broker to gain access to more than 10 IPOs per year for their retail clients. The Australian broker market is highly fragmented, which means that even if a retail investor has a broking account, or several broking accounts, this may not lead to increased accessibility to IPOs. Challenge 2: The fragmented broker market With the OnMarket app and bidding platform, investors can access IPOs with or without a broker account (although investors will need a broker account to sell the shares). Retail investors who are not associated with that broker or lead manager are consistently excluded from their IPOs. The broker or lead manager of the IPO will typically provide access to the IPO, only to those retail investors who have an account with his or her broking firm. Traditionally, to ensure that an investor can participate in the IPO process, the investor needed to set up an account with a broker. On average over the last few years, around 80-100 companies have listed on the ASX per annum. There are three key challenges for retail investors seeking to invest in IPOs: Challenge 1: Getting access IPOs have traditionally been offered to institutional investors and access to IPOs, especially sought-after deals, is hard to come by for self-directed or retail investors. After investing in an IPO, investors can sell the shares (or buy more) on a securities exchange such as the Australian Securities Exchange (ASX). It is also called ‘floating the company’.įor investors, IPOs present an opportunity to gain a share in the ownership of a growing business. This is when a company offers shares in its business to the public for the first time, and 'lists' these shares on a securities exchange once the offer is completed. The term IPO stands for ‘Initial Public Offering’. How to invest in IPOs - cutting to the chase for retail investors What are IPOs?
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