Athene Proves to be a Hit with Wall Street Investors
As 2016 draws to a close, one of the final major IPO’s of the fiscal year proved to be a hit with Wall Street investors.
Athene, a financial services company whose primary focus revolves around providing, acquiring, and insuring retirement savings products, launched what became the third largest IPO of the year on Friday, December 9th.
Company officials had expected Athene to be valued between $38 to $42 per share; much to their delight, and to those conducting trades on Hantec Markets and other platforms, investors on the New York Stock Exchange purchased 27 million Class A shares at about $40 apiece, raising $1.1 billion in the process.
Rising from the ashes from worst recession since World War II
Founded in the aftermath of the global financial crisis, Athene began its life purchasing retirement assets from insurers that had been ravaged in the market meltdown following the collapse of banks such as Lehman Brothers.
Backed up by Apollo Capital Management, a well-known private equity firm that helped them build credibility on Wall Street, this company built its current portfolio by acquiring companies such as Aviva USA. They never had to go into debt in the process of building their business, allowing to remain on a strong footing through their time as a private company.
The risks taken over the past several years have paid off in a big way, with company revenue through the first three quarters of 2016 totaling $3.05 billion, a 93.8% increase compared to the same time period in the previous fiscal year.
According to chief executive officer Grant Kvalheim, it had always been the intention of the founders to eventually take the company public. From the very beginning, they had operated the business as if they were already listed on the New York Stock Exchange.
Where is Athene going in 2017?
By focusing on creating value as if they already had a fiduciary responsibility to public investors, the path ahead for Athene looks promising. They did not pursue the IPO with the intention of enriching stakeholders within the company, as all proceeds will be flowing to selling shareholders.
Instead, they did it to gain the ability to raise capital through stock sales to retail investors. As a result of this stance, it is not unreasonable to expect that Athene has aggressive growth plans in the months to come.
With a total of $80 billion in assets, $6 billion in the bank, and an annual income of $800 million after taxes, confidence is high in this stock performing well in the months and years to come. A key piece of evidence shoring up that sentiment is the fact that this initial public offering had the backing of some of the biggest names in finance, with Goldman Sachs, Barclays, Citigroup, and Wells Fargo underwriting the deal.
Global Finance Stocks
Furthermore, global finance stocks have been performing well in the wake of the U.S. election, whose results are expected to help Athene’s performance in the foreseeable future. Its performance in recent days supports this hypothesis, as its stock price had increased to $46.51 a share at closing bell on December 16th, representing an increase of more than 16% from its IPO the week before.
Finally, the recent increase in interest rates by the Fed (the first since the global financial crisis) is another trend that is expected to work in their favor. With increased yields expected on savings due to higher interest rates, the overall financial position of Athene is expected to solidify as a result of this development.