Company Profiles
Guernsey's International Stock Exchange Targets Non-Listed Corporates
This news service has spoken to the boss of the exchange to ask about its foray into the business of enabling buying and selling stakes in unlisted companies efficiently – a crucial role at a time when private market investing is continuing to grow.
When you have spent decades working in the world of European
stock exchanges and other markets, and chosen a quieter life, it
takes a compelling proposition to head back into the combat.
The International Stock Exchange (TISE) in Guernsey came knocking
on the door for Cees Vermaas (pictured) in October 2020 in a bid
to bring an experienced industry figure into the business and
drive change.
And an important business area for TISE is its market-enabling
owners of privately held businesses who buy or sell stakes in
unlisted companies without the costs and delays associated with
middlemen, lawyers, brokers and others. Launched in late April
2023, TISE Private Markets provides unlisted companies with
access to an integrated set of tailored electronic trading,
settlement and registry solutions.
With private market investing remaining a hot wealth management
topic, reflecting a secular shift away from listed markets in
much of the West, a need for owners of private firms to buy or
sell efficiently is more significant. The sale of a private firm,
for example, is typically an important liquidity event that
private banks and wealth advisors will want to track.
TISE is helping to build the infrastructure to make the efficient
purchase and sale of private firms a reality, Vermaas told
WealthBriefing recently.
“What’s unique [about this marketplace] is that it
disintermediates the full trading value chain and brings the
whole process under control of the issuing company. In a quoted
market, activities like registry, listing, trading and settlement
are provided by many parties that all ‘eat part of the pie’,
which makes these models very costly,” he said.
As Vermaas is also keen to point out, TISE Private Markets is
another way for Guernsey to flex its muscles as an international
financial centre, offering the kind of fast-moving service that
competes with larger financial hubs.
The first company to join the platform was Guernsey-based Blue
Diamond Limited, which operates garden centres across the UK and
Channel Islands, he said. This is a business with an approximate
market cap of around £200 million ($253 million) that would in
the past have been a classic member of London’s Alternative
Investment Market. Instead, Blue Diamond was a privately held
firm and was able to operate on the TISE platform, he said. It
has seen a steady improvement in price stability and efficiency
since it joined TISE’s private market.
The ascent of businesses such as TISE Private Markets is also a
part of the infrastructure of the market having had to
evolve as more money has moved into private equity, credit,
infrastructure and real estate. The ability to buy and sell a
stake in privately held companies isn’t always clear. Within
private markets, there has been the rise of a market in
“secondaries,” giving some liquidity options in a space that
is typically less liquid than a stock market.
The exchange is talking to several interested parties who want to
use its services, varying from an international retail company in
sportswear/equipment, an international bank to a fund provider,
to give some examples. “There’s enormous need,” he said. “We
create transparency in a non-transparent world.”
With so many UK businesses not listed on exchanges, and where the
ability to buy or sell stakes is important, the stakes for making
successful transactions are high, Vermaas said. “It is the
backbone of the UK economy,” he said.
“Given the size of the private market, our focus is for the time
being on the UK. Longer term, the offering will be rolled out
more internationally. Technically our systems are suitable to
provide the service to any private company globally.”
Vermaas has years of experience in international financial market
infrastructure. He has held senior executive positions at
exchanges including CEO of CME Europe, CEO of Euronext
Amsterdam, and head of European cash markets for NYSE Euronext.
He also worked for a decade in IT and programme management roles
at Dutch powerhouses including Philips and Delta Lloyd Group.
Having undertaken a wide variety of senior roles in European
firms is also useful on a resumé when doing business post-Brexit
and when Guernsey’s role as a conduit into international markets
is so significant. It will be interesting to see how the TISE
adventure under Vermaas unfolds.