Glencore’s partners are not offering equityto you and me out of a sense of charity
We’re all going to be investors in Glencore, whether we like it or not. If the flotation of this giant commodity and mining group goes ahead next month at the valuation currently indicated, it will leap straight into the upper reaches of the FTSE 100 — something that has not happened to any new share since the big privatisations of the 1980s. That means every major pension fund, and all those tracker funds and funds of funds that wealth managers love to stuff their clients into, will end up owning little bits of Glencore.
The fact that this secretive operator, headquartered in a fiscally convenient Swiss village, controls half the world’s copper trading and two thirds of global zinc trading, plus shedloads of coal, oil and agricultural produce — pretty well everything the world is running short of, in fact — should make Glencore shares even more of a must-have. But that does not mean we shouldn’t greet the flotation with a dose of scepticism: we should ask why the firm’s 485 faceless partners have chosen this moment to turn their stakes in Glencore into another tradeable commodity, at such a high opening price. The managing partners could be enriched by $200 million each, while the South African-born chief executive Ivan Glasenberg will become an instant multibillionaire.
Well, that’s what happens if you build a successful business and launch it on the stock market, even if it’s a business that just buys and sells stuff, some of which it digs out of the ground. Glencore has long been divorced from its controversial founder, the trader Marc Rich, who was indicted for tax evasion and illegal oil dealing but pardoned by Bill Clinton (though not by Taki, for whose barbs Rich remains a regular target).
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