Deals May Strain On Refco News;

Cowen Group missed forecast on IPO

By Yung Kim

NEW YORK, July 12 (Reuters) - Investment bank Cowen Group Inc., which spun off from French bank Societe Generale (SOGN.PA: Quote, Profile, Research), raised $179.5 million on Wednesday in an initial public offering that missed its own forecast, according to an underwriter.

The 11.2 million share offering, which represents almost 75 percent of outstanding common stock, sold for $16 per share, compared with a $19 to $21 forecast that was in its prospectus.

SG Americas Securities Holdings Inc., an indirect wholly owned subsidiary of Societe Generale, is the sole stockholder of Cowen Group and offered all of the shares in the IPO.

Cowen Group will not receive any proceeds from the offering, which gives the company an initial market capitalization of about $240 million.

The company, which changed its name from SG Cowen this year, focuses on investment banking services for companies backed by venture capital (VC).

For the three months ended March 31, the company earned $36.5 million, up from $9.6 million a year earlier, while revenue rose to $105.6 million from $81.7 million.

However, the company has a number of factors working against it, said Francis Gaskins, an independent IPO analyst and president of IPO Desktop. He cited the increase in electronic trade, generally turbulent market conditions and Cowen's concentration on the tech sector, which is not growing.

"They are not big enough to play in the major leagues," Gaskins said. "When the market tightens up, the so-called 'flight to quality' also happens when people are trying to do deals. The big guys get a preference."

Cowen and Co., Credit Suisse and Merrill Lynch & Co. are the lead underwriters for the IPO. The company has applied to trade on the Nasdaq under the symbol "COWN" (COWN.O: Quote, Profile, Research).