A trade group has been formed to represent the growing Pipes (private investment in public equity) industry.
A trade group has been formed to represent the growing Pipes (private investment in public equity) industry.
The group, called the Direct Funding Preservation Alliance, will be involved in providing information and educational resources for investors and for those who are looking into securing financing, as well as lobbying on behalf of its members.
The group will consist of both investment firms and vendors that are involved in this arena.
According to Sagient Research, the US Pipe market totalled USD177.26bn raised through 1,283 transactions in 2008 compared to USD83.96bn raised through 1,416 transactions in 2007. In sharp contrast, there was only USD7bn in Pipe transitions in 1999.
‘Since the government is now using these structures on a daily basis it has disseminated a wealth of information out into the public arena. However, there is currently no central repository for this information and it is very important that all sides of the strategy understand exactly how Pipe transactions work,’ says David Schwartz, partner at Empire Government Strategies and founding member of the trade group.
Schwartz will lead the lobbying efforts to educate regulators on the role that Pipes play in the economy.
‘Excessive regulation will cause medical technology companies to lose funding that are the bread and butter in finding cures to diseases,’ Schwartz says. ‘Some of our best inventions and discoveries have come about because of Pipes funding.’
The group plans to publish position papers that address issues relating to the Pipes industry and launch a website that will be a resource for those seeking information.
