Liquidnet, operator of a large block crossing network and brokerage, today announced it is offering the buyside the ability to buy shares of privately-held and pre-IPO companies.
To lead this new effort, it has hired Lou Kerner to run the newly formed Private Shares Group. Kerner, a 17-year veteran, joins Liquidnet from Wedbush Securities where he was vice president of equity research covering the social media and e-commerce sector for one-and-a-half years.
Prior to that he had been an entrepreneur with previous ventures including Bolt Media, an early social media network, and The .tv Corporation, which licensed the Internet domain suffix .tv. He spent the first seven years of his career as an equity analyst following media companies at Merrill Lynch and Goldman Sachs.
The thrust behind the move is that trading in the shares of private and pre-IPO companies has expanded rapidly in recent years, Kerner said.
"We think this is an emerging asset class and it makes sense to get involved in it," he said.
And recent data could prove this. According to a survey, trading in private shares and IPOs is forecast to grow to approximately $7 billion this year, up from the $4.5 billion seen in 2010.
Kerner’s two person team, which includes Michael Silverstein, a fellow researcher also from Wedbush, will be looking for investment opportunities in private companies as well as with the private companies themselves that are seeking to set up programs to sell their own shares. The PSG will be part of the firm’s Equity Capital Markets business.
"We expect to grow this team over time," Kerner said. There are plans to grow the group and possibly hire sales traders in the future, he added.