Sponsored: Computershare Spotlights Considerations for Offering Liquidity to Shareholders

By Kevin Brennan, executive vice president of business development, Computershare

The alternative investments industry is untraditional, and investors are often looking for some type of liquidity for their investment. Whether it is through a specific listing or liquidity event, or an ongoing program, each option is unique. While there are several types of events, the most common are:

1. Public listing of security: When a direct listing or traditional initial public offering of non-traded shares become tradable at the point of listing or IPO, and released over time.
2. Merger or acquisition: When there is a cashing out of shares or exchanging them for shares in the new company.
3. Return of capital to shareholders: When assets are sold and the funds are distributed to shareholders.

Depending upon the structure of your ongoing plan or event, be sure to choose a partner that can handle both public and non-traded shares. As one of the few providers that can manage both, companies trust Computershare to flawlessly execute their transactions. We have handled many of these transactions, from straightforward deals to those that are highly complex.

Managing one-time liquidity events

 Execution expertise 

 You want one partner with expertise at every stage of the transaction – from preparation to the announcement, execution and event management, to post-event services. We have the processes and procedures in place to support a smooth, seamless event from start to finish.

To begin, we assign your company a dedicated project manager who is your key contact throughout the event. Your project manager can leverage the wide range of services within Computershare to support any type of listing or liquidity event – from straight transfer agent services, proxy services, information agent, paying agent, and more. We also have good working relationships with lawyers and other intermediaries to bring in the expertise needed to ensure a smooth transaction.

If your event involves mergers and acquisitions activity, voluntary offerings or recapitalizations, Computershare offers an automated, web-based portal to make it easy for your team to manage and monitor the event and for shareholders and custodians to participate, thereby streamlining the process. Our platform replaces manual, paper-based processes that are time consuming and prone to errors while reducing costs. Our portal offers a comprehensive reporting and approval process for custodians to monitor and approve their client requests, as well as balancing out and finalizing the funds.

The distribution of cash proceeds is a critical part of any event, and this step is expedited through consolidated payments to custodians, brokers and ultimately, the underlying investors.

 Communication is key 

With any liquidity event, clear and open communication with key stakeholders at every stage is vital. This includes communicating with investors, financial advisers, and custodians to make sure they are aware of the upcoming event, giving them ample time to submit their instructions and ensure their records are in balance for the transaction. We can work with your stakeholders to reconcile their positions prelisting and calculate entitlements. If the event has any added complexities such as a lock-up, a tender offer or a reverse stock split, we will manage it from start to finish.

During the event, continuity is important for stakeholders who need access to consistent data throughout the transaction. Our alternative investments portal provides access to all related transaction information and insights – supporting custodians, advisers, registered investment advisers, brokers, and related institutions.

Coordination with The Depository Trust Company and other third-party stakeholders

For any listing event that involves moving shares from non-traded to publicly traded, it is critical to complete the transaction accurately and on time, allowing your clients to sell their shares on the open market.

To ensure a fast and efficient distribution process, Computershare works with The Depository Trust Company, using their alternative investment platform, available to all DTC participants. We balance and coordinate the delivery of publicly traded shares to DTC for custodians, financial institutions, and other DTC participants to facilitate a smooth reconciliation. For non-DTC intermediaries that are holding positions, we maintain direct contact and have established distribution facilities.

Providing ongoing liquidity

 A public listing or M&A event may not be on your immediate roadmap, but you may still wish to provide some liquidity to your shareholders. Unlike a one-time event such as a tender offer or Dutch auction, share repurchase programs allow issuers to continually offer liquidity to investors when needed. Some share offering types require the establishment of an ongoing repurchase program.

In addition to the specialized liquidity events described above, Computershare’s team can also serve as a trusted adviser overseeing your ongoing share repurchase program. Computershare’s share repurchase portal allows investors to participate in the repurchase program online. This provides convenience for your shareholders and streamlines the process for all key stakeholders, including any custodians. The web portal cuts down the number of items that are not in good order and provides clients with an easy-to-use platform to approve or decline items without the hassle of mailing paper.

If your company is planning a listing or liquidity event, contact Computershare to learn how we can cost-effectively execute your transaction with ease and accuracy.

https://www.computershare.com/us/insights/the-alternative

About Computershare

Computershare is the foremost provider of strategic shareholder services to public and private companies, including registered non-listed real estate investment trusts, business development companies, and other alternative investment securities. The Computershare team offers expertise and responsive client service, as well as innovative technology and tools for cap table management, investor records, and compliance needs. Trusted by more than 6,000 companies representing 25 million investor accounts, Computershare’s proven solutions help clients securely and easily manage important data.

Computershare is a sponsor of The DI Wire, and the article was published as part of their standard directory sponsorship package.

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