After a strong nine months for new listings on the London Stock Exchange, a number of real asset-backed initial public offerings (IPOs) have struggled recently.

Last week, Aviva Investors pulled its IPO to raise £200m (€226m) for a long-income real estate fund, the Aviva Investors Secure Income REIT.

The company cited “insufficient demand”, and Renos Booth, head of real estate long income at Aviva Investors, said: “We will give consideration to reactivating the proposed initial public offering at a later date.”

The aborted IPO comes soon after the cancellation of the listing of M7 Multi-Let REIT, which was seeking to raise up to £300m in November.

Aberdeen Standard Investments, however, succeeding in listing its European logistics REIT, albeit missing its £250m fundraising target by 25%.

The Aberdeen Standard European Logistics Income is designed to tap into the rapid growth of e-commerce across Europe by investing in logistics properties such as large ‘big box’ warehouses and local ‘last mile’ distribution centres.

Martin Gilbert, co-chief executive of Aberdeen Standard Investments, said at the time: “This is the first investment trust launch by Aberdeen Standard Investments and to have raised £187.5m is an excellent result and delivers a strong platform from which we can grow this exciting asset class.”

In a note, Numis Securities said the London IPO market had been strong this year after an uncertain 2016, during which there were only six launches. Despite continued political uncertainty, 18 new issues had raised gross proceeds of £3.35bn by 20 September, according to Numis. The pace of new issuance was particularly strong in the third quarter 2017, with eight IPOs raising £1.84bn.

Numis said there had been “tough conditions” in the fourth quarter, saying it was easier to raise secondary capital for existing funds today.

“This is because there are a relatively limited number of institutions that are able to cornerstone the launch of a new issue.

“The major multi-asset investors appreciate the benefits of the closed-end structure in specialist asset classes. However, they are wary of illiquidity and increasingly want vehicles to be at least £200m.”

The £200m threshold was often a “tall order”, Numis said, “particularly for funds investing in asset classes that are unfamiliar to most investors”.

Last month, a new infrastructure fund run by former John Laing Infrastructure Fund advisers, said it was looking to raise £200m by listing in London. Tri-Pillar Infrastructure Fund, which aims to invest in North American and European infrastructure, delayed its 8 December IPO.

Advised by an investment team led by Andrew Charlesworth – who co-led the initial public offering (IPO) of John Laing Infrastructure Fund in 2010 – Tri-Pillar recently provided an update, stating: “The company had been informed that there would be a grant of exclusivity by a vendor on a significant potential acquisition by the beginning of this week and the company therefore extended the timetable for the fundraise accordingly.”

Tri-Pillar added that, despite the continued progress made by CAMG in developing the acquisition, due to the absence of any definitive outcome, the company has decided to postpone any further public fundraising activity until 2018 subject to market conditions.

With the exception of Aberdeen Standard European Logistics Income, there have been no successful IPOs during the fourth quarter to date. But there could yet be more real asset-backed IPOs before the end of the year.

Numis said it was aware of two other IPOs being promoted, including Tufton Oceanic Assets, which is seeking to raise more than $100m (€84.9m) to invest in second-hand commercial sea-going vessels.

The other is Greensphere Capital, which is seeking to raise up to $500m to invest in sustainable infrastructure. Both funds are due to start trading on 20 December.

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