Cornerstone investors have become
fundamental to initial public offerings (IPOs) in Asia, with
offerings such as those of Felda Global Ventures and Astro
dependent on their support. But rules are vague and
significantly differ throughout jurisdictions.
Cornerstone investors are usually sovereign
wealth funds, institutional investors or, in the case of Hong
Kong, local tycoons. They guarantee that a proportion of the
offer will be sold and stimulate investor demand.
Although cornerstone investors were
clamouring to be involved in deals four years ago, the volatile
markets mean that there has been a role reversal: banks must
actively seek cornerstone investors to be involved in
The cornerstone investors role has changed drastically
since 2006. According to one Hong Kong-based partner, In
a bull market, cornerstone investors...