EXPONENTIAL Holdings failed in its initial public offering (IPO) after not raising the minimum $300 million stipulated in its prospectus.

The investment start-up had targeted as much as $480 million from the IPO.

Mayberry Investments Limited, the lead broker in the offering, made the disclosure yesterday as it announced the closure of the IPO. All participants in the issue since it opened on November 25 will be refunded funds they invested by this Friday, the company said.

A dissapointed Gary Peart, the CEO of Mayberry, suggested to the Business Observer yesterday that the product may have been “a little bit ahead of its time”.

“We got support from a lot of people, but at the end of the day I think, while we believed the model is something that people would have wanted at this point in time, in the sense that 70 per cent of the assets would have been invested outside of Jamaica, the reality is that we just didn’t get the support to get to the minimum,” Peart said.

“The reality is that the market wasn’t ready for it you can’t fight the market,” Peart added.

Exponential planned to list on the Jamaica Stock Exchange (JSE) Junior Market, seeking to raise $480m at $2 a share from local investors. Mayberry did not reveal how much was actually raised through the issue.

The proceeds of the offering would have gone towards paying IPO and listing expenses, and the remainder for investment primarily in equities and fixed-income securities and cash. The company expected to earn income from dividends and interest paid on the shares and debt securities comprised in its investment portfolio and from trading securities comprised in the portfolio, according to its prospectus. The company would not be carrying on investment advisory business or securities dealing business and does not hold itself out as dealing in securities on a day-to-day basis, the prospectus said.

Exponential managing director Justin Nam has more than 10 years of financial sector experience in Jamaica and Trinidad and Tobago. Peart did not rule out the company returning to the market in the short term.

“Nothing prevents Justin and Exponential from coming back in the future, maybe when there is more acceptance for the type of structure,” Peart said.

“Justin is a young man, a resilient man, a fighter to the end and knowing Justin and his intellect he will go away and assess the feedback,” the Mayberry CEO continued. “I believe that Justin is one of the best investment managers in the country, and as such I wouldn’t be surprised that in relatively short order he comes around again.”

— Julian Richardson