Equity Fund Manager Cornerstone Seeks to Raise $30 Million on NYSE American

The firm, which backs U.S.-listed Chinese companies, expects to complete its IPO on the NYSE American.

Author: CapitalWatch Staff   

Nearly a year after it first filed for an initial public offering in New York, Cornerstone Management Inc. continued its efforts with an amended filing and an increased target of $30 million.

In its prospectus filed Friday with the U.S. Securities and Exchange Commission, the Guangzhou equity fund manager said it expects to trade under the symbol "CSCA" on the NYSE American.

In an October 2018 filing, Cornerstone applied to raise $20 million on the Nasdaq Capital Market.

Cornerstone backs Chinese companies that are publicly listed or plan to list on a U.S. stock exchange. Its focus category is primarily in the technology, media, and telecom (TMT) market. It invests during any stage of the investment cycle: pre-IPO, IPO subscriptions and post-IPO secondary market investments, Cornerstone said. The company also provides financial advice to third-party investors.

The company's revenue in the twelve months through March was $29 million compared with $12.8 million in the year through March 2018. Net income was $8.6 million compared with $2.9 million, respectively, Cornerstone said.

Among its strengths, Cornerstone noted that its investor base is mainly comprised of affluent Chinese. In the year through March, the number of its clients increased by 500 to 2,000 total, it said. Of all investors, 98.5 percent were individuals and 1.5 percent were institutions as of March 31.

"With China experiencing a rapid rise in private wealth, many high income individuals together with institutional investors, are increasingly seeking to make offshore investments for currency hedge purposes," Cornerstone said in its filing.

Citing research by China Insights Consultancy (CIC), the company said that U.S. capital markets are "especially appealing" to Chinese investors. Cornerstone said the appeal is in the well-developed investor base, as well as the U.S.-listed high-growth Chinese companies and better returns on the markets.

The company said it would use the proceeds of its IPO to expand its operations and for general corporate purposes, including increasing its marketing and sales team. 

Cornerstone did not specify the amount of shares it seeks to sell.

Network 1 Financial Securities Inc. is underwriting the deal.