Because many of the floats have been of smaller companies, smaller-company fund managers have come up against severe cash constraints.Perhaps more importantly, they have lost the inclination to invest in companies that many investors perceive to have been of poor quality. They have been especially put off by the number that have come to market only to shock the City soon afterwards with a profits warning.It is not altogether clear, however, that nervousness is justified by statistical evidence. A price of 150p a share compares with original hopes of nearer 200p and reduces the amount Albright’s 100 per cent owner, Tenneco, will raise from the flotation by more than £100m.
Albright was not alone in struggling to persuade investors of its merits. The basis of the NRG claim, which is being vigorously defended, is that they failed to warn over the extent of the shortfall in Victory Re’s reserves caused by losses associated with storms in 1987, the Exxon Valdez oil spill and other catastrophes.. The dramatic scaling back of expectations for the issue price of shares in Albright & Wilson this week underlined the high jitters afflicting the new-issues market. “The case is as much about what Swiss Bank did not do as well as what it did do,” added Mr Aiken.NRG is also suing accountants Ernst & Young and actuaries Bacon & Woodrow over the advice they gave at the time of the acquisition. At issue is a case of negligence brought against Swiss Bank Corporation over its advice to a Dutch insurance company, Nederlandse Reassurantie Group (NRG), when it acquired Victory Re, another insurance company.

NRG claims to have suffered losses of £255m following the purchase of Victory Re from Legal & General in July 1990 for £122m.
Mr Richard Aikens QC, representing NRG, said the bank was responsible for the pre-acquisition investigation of the target company,which meant it had to advise on the merits of the purchase and the risks involved. Legal action which could set into law the responsibilities of an investment bank heated up in the High Court yesterday. The Stock Exchange said the planned market, which is to replace the Unlisted Securities Market, had received support from Michael Heseltine, President of the Board of Trade.
The exchange said its consultations had shown strong support for the concept of AIM, and the rules were framed to offer wide accessibility and lower costs, while providing an orderly and regulated market.”Trading will be subject to the same level of surveillance and supervision as on the official list,” the exchange said in a summary of AIM rules, adding that the shares would be traded on Seats Plus, the trading system scheduled to come on-line in June.AIM’s rules would place no restrictions on market capitalisation, length of operating record or percentage of shares in public hands.”Companies will be able to raise capital and to trade their shares on a regulated market, raising their public profile at the same time,” said Michael Lawrence, chief executive of the Stock Exchange.AIM could have more than 100 entrants in its first 12 months if companies currently trading under Stock Exchange Rule 4.2 join the market in strength, according to accountancy firm KPMG .If not, then a figure of around 30 entrants might be more realistic for the new market, KPMG said.Neil Austin, head of new issues at KPMG Corporate Finance, said: “It is important for AIM to work if smaller companies are to have better access both to capital and, for whatever reasons they may have, to a market for their shares.”He added: “The business economy needs AIM and it is a good initiative, one that we shall be fully supporting.”. The Stock Exchange will launch its new AIM market for small, young and growing companies on 19 June, and participants forecast it could attract 100 entrants in its first 12 months. He added that the new regulatory regime being put in place was better than had existed previously.In response to MPs’ questions about Lloyd’s solvency he said that last summer Lloyd’s had passed its test of having enough free assets to cover liabilities by a factor of three..

He said he believed the current management of the society was going down the right road in attempting to quantify the liabilities likely to emerge in future from the “long-tail” business that has caused Lloyd’s biggest losses. He said it would be unwise to legislate for external regulation now although it might be worth considering in a few years’ time as the profile of the market changed.
Mr Spencer was answering questions from the Treasury and Civil Service select committee, which is examining financial regulation.In response to tough questioning from MPs he maintained that it was the DTI’s role to protect policyholders not capital providers such as the names, who have lost vast sums over the past decade. Mr Spencer defended self-regulation at Lloyd’s and said progress had been made in improving procedures. Jonathan Spencer, the senior Department of Trade and Industry civil servant overseeing Lloyd’s of London, yesterday told MPs that the insurance market was likely to pass its solvency test this year. He is understood to have written to the Stock Exchange confirming Mr Newmarch’s version of events. BY JOHN MURRAY

Mick Newmarch, former chief executive of Prudential, told the Chancellor of the Exchequer, Kenneth Clarke, that the Securities and Investments Board report on pension transfers would hit the company’s share price, according to a senior Treasury official.
The official was one of two Treasury civil servants giving evidence yesterday to the Stock Exchange as part of the investigation into share dealings by Mr Newmarch on 25 October, the day the SIB report was published.The exchange has already indicated it intends to censure Mr Newmarch and the Pru’s chairman, Sir Brian Corby, over the affair on the grounds that it was a breach of the code governing directors’ share dealings.Mr Newmarch made a profit of more than £200,000 by exercising and selling more than 200,000 share options in the company hours before the SIB report was published.The Prudential argues that the report was not price-sensitive.But the Treasury alerted the Stock Exchange to Mr Newmarch’s remarks, which took place during a meeting in early October between him and the Chancellor to discuss the SIB report.The meeting, held at Mr Newmarch’s request, included David Prosser, chief executive of Legal and General. But total joblessness fell 27,500 in January, after seasonal adjustment, below the average of 40,000 a month in the past six months..