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Co-Founder, President and CEO of Sygnus Group Berisford Grey, answers questions from the audience during a Q&A Session with Mischa mcleod Hines, vice-president of capital market at Sagicor Investments, and Scotia Investments Head of Capital Markets Sarah Cumming — joint lead brokers. (Photo: LinkedIn)

Sygnus Real Estate IPO falls short

Co-Founder, President and CEO of Sygnus Group Berisford Grey, answers questions from the audience during a Q&A Session with Mischa mcleod Hines, vice-president of capital market at Sagicor Investments, and Scotia Investments Head of Capital Markets Sarah Cumming — joint lead brokers. (Photo: LinkedIn)

Sygnus Real Estate Finance (SRF) failed to raise the almost JM$4 billion it targeted in its recent initial public offering (IPO) but said it is ready to execute on projects with the funds garnered.

The company said it raised an estimated JM$2.3 billion in total from both its Jamaican dollar and US dollar share classes from 1,153 subscriptions.

The offer was closed on Friday, September 10 after being extended from its original August 20 closing date. Sygnus had also indicated that it would have upsized the offer if it was oversubscribed.

Co-founder and president of Sygnus Berisford Grey said he was “still very pleased with the results”, which he said “shows investor confidence in our alternative investment strategy”.

From left: Berisford Grey, co-founder and CEO of Sygnus, with David Cummings, vice-president and head of Real Estate & Project Finance at Sygnus and Mischa McLeod Hines, vice-president, Capital Markets — Sagicor Investments Jamaica. (Photo: Jamaica Observer)

“The reality is we are still living in the middle of a global pandemic, which as we know in Jamaica has recently seen a workweek reduced to three days, restricted movement, and increased COVID- 19 protocols,” he continued. He added that “the shortfall in SRF’s capital raise will not impact SRF’s capacity to execute its pipeline projects, as we are already in advanced discussions with pension funds and co-investment partners whose preference at this time is to participate directly in funding these real estate opportunities”.

SRF will become the second alternative investment company managed by Sygnus to be listed on the Jamaica Stock Exchange within the last four years.

“Following this fund raise we are very optimistic about the future of real estate investing as we continue to have strong interest from investors in this asset class which still remains a key long-term medium for wealth creation and portfolio diversification. We remain committed and focused on leveraging our expertise to unlocking value in real estate for SRF’s shareholders,” stated Grey.

SRF had stated in its prospectus that it has four key strategic objectives to unlock additional value from its major strategic property acquisitions, which contain significant upside opportunities within the next two to three years.

“SRF chose to focus first on the Jamaican real estate market, given what it believes is a better risk-to-reward ratio on its investment capital. The quality of the assets on SRF’s books is evidence that this was the best path for the company to take when it made that decision. In order to invest the capital required to unlock the additional value in these assets, and accomplish its other strategic objectives, SRF needs to raise additional Dry Powder,” it stated further in the prospectus.

It outlined that the IPO represents a key initiative to unlock the value it sees and assist in financing its robust pipeline of at least JM$5.5 billion over the next 18 months.

The company did not indicate when SRF will be listed on the Jamaica Stock Exchange.

Sagicor Investments and Scotia Investments were the lead brokers. Sygnus Capital was the lead arranger for the IPO.