Baer's Artio IPO Jumps Almost 5 Percent in Debut

ZURICH/NEW YORK (Reuters) - Shares of Julius Baer Holding AG's U.S. asset management arm Artio Global Investors Inc finished their first day of trade up 4.8 percent after the company's initial public offering raised more money than expected.

Artio closed the day at $27.25 on the New York Stock Exchange.

On Wednesday, Artio sold 25 million shares in the IPO, more than expected, for $26 each, raising $650 million from its initial public offering and helping its parent build its acquisition war chest.

"The Artio IPO is, in our view, well timed and takes advantage of a positive financial market environment," said analyst Stefan Schuermann at banking and asset management group Vontobel, who reiterated a "buy" recommendation on Baer.

Artio will use the money to repurchase 22.6 million shares from its parent, more than halving Julius Baer's stake.

Baer said its private banking unit would get $300 million of the proceeds from the IPO, with the rest to be used to strengthen the buying power of hedge fund arm GAM, which is also set to be listed separately from the private bank.

If the IPO's managers, led by Goldman Sachs , exercise their option to buy another 3.75 million shares, the IPO could yield $747.5 million and become the third-largest U.S. IPO so far this year.

Baer, Switzerland's third-biggest bank, has often said it was planning to list Artio once equity markets steady and it decided earlier this month the time was right to cash in on higher share prices to help fund possible acquisitions.

The Artio IPO ends a 15-month drought in financial company flotations, excluding real estate investment trusts, in the United States. The last asset manager to go public there was Fifth Street Finance Corp in June 2008.

RENEWED ENTHUSIASM

Artio may have benefited from investors' renewed enthusiasm for asset managers. The Standard & Poor's Asset Management and Custody Banks index <.GSPAMCB> has rallied 102 percent from its March 2009 lows and JP Morgan last week raised price targets on five U.S. asset managers because of strong equity markets.