RU
Oct 28, 2016
Pension fund shares entered the stock market

Author: Marina Rudneva

The allocation of shares of the Public Joint-Stock Company FUTURE Financial Group took place on the Moscow Exchange. This сompany is one of the largest pension assets managers in Russia. The shares of the entities whose job was pension fund management were not traded on the market before

The allocation of shares of the Public Joint-Stock Company FUTURE Financial Group took place on the Moscow Exchange. This сompany is one of the largest pension assets managers in Russia. The shares of the entities whose job was pension fund management were not traded on the market before.

On October 28, 2016, the Public Joint Stock Company FUTURE Financial Group, one of the largest entities managing pension assets in Russia, announced its intention to go public via an IPO — an initial public offer of its shares.
The majority shareholder of the Company is the O1 Group, the beneficial owner of which is Boric Mints.

The Offer price was established at the level of RUB 1,190 per Share, which corresponds to the Company’s market capitalization in the amount of RUB 58.5 bln.

9,834,945 of the Company’s shares in the amount of RUB 11.7 bln were sold in the framework of this Offer.

As a result of the Offer, the Company’s free-float of shares will amount to 20%.

Share settlements will be completed today on October 28, 2016. The Secondary Share Trade (ticker FTRE2) started at 15:00, Moscow time on October 28.

According to Boris Mints, the Company does not have plans for either new shares allocation or new debt securities allocation. We saw a demand for the shares from both retail customers and institutional investors.

The company intends to channel RUB 3–4 bln, gained as a result of IPO, to discharging its debt to the Credit Bank of Moscow (CBM). The Company shares that previously have been pledged to this bank have now been replaced with other liquid assets of the Group. The Company will channel the rest of the profit gained as a result of the transaction to its own development. At the same time, in the near future, the Company does not have any intentions to acquire new pension funds.

The company plans that the total number of placed shares will remain the same within 180 days after the offer date. The O1 Group enforces a moratorium for the share sale within 180 days after the offer date.

VTB Capital became the exclusive global coordinator and bookrunner of the offer. The investment group ATON became the bookrunner of this offer.

"The IPO generated significant interest from a wide range of the investors," Marina Rudneva, the CEO of FG FUTURE declared. "The book was oversubscribed and the general demand for the IPO price exceeded the supply by more than 1.2 times. We received a large number of bids, including more than 1,000 bids from individuals," she explained.

FUTURE Financial Group is one of the largest financial entities managing pension assets in Russia. It manages five non-state pension funds that perform mandatory and non-state pension insurance activity.

The total sum of the assets managed by the Group comprises RUB 274 bln, including more than RUB 245 bln of pension savings and RUB 28.5 bln of pension reserves. The total number of the customers exceeds 4.5 mln people. All of the funds are included into the System guaranteeing the rights of insured people established by the Deposit Insurance Agency (DIA).

Pension funds started the process of going public three years ago. This was performed upon the initiative of the legislator, who obliged non-state pension funds to disclose their owners and join the system for insuring pension savings.

The funds comprising FG FUTURE will start their first payouts in accordance with the law in 2021. At the same time, the Company counts on the fact that the first large payouts will start in 2027–2028.