A number of New Zealand-based fund managers say they received up to half the Trade Me shares they applied for from the Fairfax sale, with most of the stock going to Australian institutions.
Australian publisher Fairfax sold its 202 million shares - representing its 51% stake in the company - for nearly $670 million to help reduce its debt and restructure its struggling print operations.
Milford Asset Management executive director Brian Gaynor said the New Zealand allocation was disappointing but Trade Me has been a popular stock in Australia.
He says it would have been a problem selling all the shares within New Zealand but it is possible the local market could have taken 30 to 40% as opposed to the 10% actually sold here.
Mr Gaynor says, however, that it's the seller's decision where the shares should go and more Trade Me shares are currently in New Zealand hands than was the case before the sale.
The high allocation of Trade Me shares to Australia follows the listing of Fonterra's Shareholders Fund, when a large chunk went to offshore funds.
That's raised concerns that the partial float of state-owned Mighty River Power in 2013 will follow the same pattern.
But Mr Gaynor believes Mighty River Power will stay mostly in New Zealand hands because the Prime Minister will have a big say in the allocation.
"Absolutely, he'll make sure that they're allocated to New Zealanders because otherwise he's on a hiding to nothing."