When Lyft finally starts trading, one firm that will be carefully watching how the stock performs is Paul Hudson’s Glade Brook Capital Management.
Although his investment in the ride-sharing company is not big enough to be included in Lyft’s disclosure filing, Glade Brook was an early investor. Lyft was one of six companies that Glade Brook’s first main private equity fund, GB Private Opportunities Fund, invested in.
The other five were social media company Snap, online home rental company Airbnb, ride sharing app Uber Technologies, office sharing company WeWork Cos., and The Honest Co., the consumer goods company co-founded by Jessica Alba.
As market experts anticipate a pick-up in the number of IPOs this year, especially among the so-called unicorns, or private companies valued at more than $1 billion, Hudson is no doubt anticipating — or hoping for — a possible big payoff. Hudson did not return a phone call seeking comment.
Uber is reportedly planning to go public later this year. There is no indication the others are planning an IPO this year.
As it turns out, three of the five most valuable private companies ranked by CB Insights are also investments made by GB Private Opportunities Fund. They are Uber, ranked second on the list with a $72 billion valuation; WeWork, ranked fourth at $47 billion; and Airbnb, ranked fifth at $29.3 billion.
But Hudson and other investors should be careful for what they wish for.
Snap was the first of the original six to go public, and it has not been a success since its IPO. Snap went public at $17 in March 2017. The shares now trade at around $11 after dropping as low as $4.82. Glade Brook is no longer in the stock.
Another one-time Glade Brook private holding has also had a rough time as a public company. Back in September, Chinese internet company Meituan Dianping went public at $69 (Hong Kong). It closed Wednesday at $50 after dropping to the low $40s at the beginning of the year.
Glade Brook did not sell any shares in the IPO, according to a person familiar with its investment at the time the shares went public.
Meituan was the first and biggest investment made by Glade Brook’s second private fund, GB Private Opportunities Fund II, according to the person.
Before the offering, the Tencent Holdings-backed startup was valued at $30 billion, making it the third-most-valuable private company at the time, behind Uber and Didi Chuxing, according to CBInsights.
Several years ago, Glade Brook morphed from a hedge fund to a private equity firm. Hudson previously worked for Chris Shumway’s Shumway Capital Partners. Shumway had previously worked for Julian Robertson Jr.’s Tiger Management, making Hudson a so-called Tiger Grandcub.
