Table of Contents
Introduction 1
Part 1 Key parameters 5
Chapter 1.1 What are cornerstone investors? 7
Chapter 1.2 From early beginnings in Europe to three key Asian jurisdictions today 9
Chapter 1.3 Cornerstone tranches or corporate placings? 13
Chapter 1.4 Differences with pre-IPO investors 16
Chapter 1.5 Types of cornerstone investors and the US option 21
Chapter 1.6 Individual subscription amounts 29
Chapter 1.7 How many cornerstones are in an IPO? 30
Chapter 1.8 Tranche sizes and the question of liquidity 31
Chapter 1.9 What cornerstones bring to IPOs 34
Chapter 1.10 What is in it for the cornerstones? 36
Chapter 1.11 Obligations of cornerstone investors 38
Chapter 1.12 Anchor investors: Cornerstone investors by another name? 41
Part 2 The legal framework 43
Chapter 2.1 Hong Kong 45
Chapter 2.2 Malaysia 51
Chapter 2.3 Singapore 54
Part 3 How the process works in practice 57
Chapter 3.1 Defining the equity story 59
Chapter 3.2 The initial approach 60
Chapter 3.3 Targeting potential cornerstones 62
Chapter 3.4 Drawbacks of a 'free-for-all' approach 64
Chapter 3.5 Cornerstone marketing and multi-bookrunner syndicates 67
Chapter 3.6 The bookrunner script 69
Chapter 3.7 The non-disclosure agreement (NDA) 71
Chapter 3.8 What happens after the NDA has been signed 78
Chapter 3.9 Firming up the bids 84
Chapter 3.10 The subscription agreement 86
Chapter 3.11 Finalizing the allocations and settlement 100
Part 4 Issues associated with cornerstone investors 107
Chapter 4.1 Ethics 109
Chapter 4.2 Cornerstone investors: A way around market forces? 111
Chapter 4.3 Disclosure 113
Chapter 4.4 The lock-up requirement 115
Chapter 4.5 Recent developments 117
Conclusion 119
Appendix 1 Recent examples of cornerstone tranches in Hong Kong 123
Appendix 2 Older examples of cornerstone tranches in Hong Kong 129
Appendix 3 Recent examples of cornerstone tranches in Malaysia 132
Appendix 4 Recent examples of cornerstone tranches in Singapore 136
Appendix 5 Sample script for an initial approach to potential cornerstone investors by bookrunner banks 139
Appendix 6 Example of a non-disclosure agreement for potential cornerstone investors 141
Appendix 7 Example of an international cornerstone subscription agreement 152
Appendix 8 Selected profiles of cornerstone investors 169
Appendix 9 Target list of potential cornerstone investors (by jurisdiction) 205
Glossary 212
About the author 243
Index 244
