Private equity firms keen to return cash dump discounted stocks

​Private equity firms have been selling out of recently-listed stocks in Europe, swallowing steep discounts in volatile markets to allow them to recycle investor capital.

Hellman & Friedman and other backers of Allfunds Group Plc this week offloaded about €288 million (US$295 million) of stock in the mutual fund distributor at a 37 per cent discount to last year's initial public offering price. About a week earlier, Nordic Capital sold half its stake in Cint Group AB at 19 per cent lower than the Swedish software company's value at IPO.

An even starker example came in October, when Chinese private equity firm Wise Road Capital sold shares in Alphawave IP Group Plc at a 76 per cent discount to the semiconductor firm's London IPO price. 

Sales of large blocks of shares are profit-taking events for a company's early backers, making spates of transactions at such large discounts relatively rare. The recent round is reflective of the pressures facing some private equity firms in a market with rising inflation and higher interest rates.