Fund managers reject 'ridiculous' IPOs in favour of mid-cap bargains

Fund managers are turning away from the IPO hype which has seen many companies list this year, to concentrate instead on ‘overshadowed' mid-cap stocks.

The market has seen a flurry of initial public offerings in the first half of the year, with online property service Zoopla, TSB Banking Group, and the AA floating in June. But UK fund managers have questioned the valuations of these stocks, and noted the time required to properly scrutinise new offerings has led them to limit contact with IPO fundraisers. Instead, there is renewed appetite for backing more familiar and established names. The June review of the FTSE indices has led to the introduction of newly floated companies, while older names have been pushed out. For some investo...