Private Equity-Backed IPOs Show Decline in 2012

Companies backed by private equity raised a total cash of US$20.5bn through 103 initial public offerings (IPOs) between January and November 2012, according to data released by Ernst & Young (E&Y).

The figure suggests that the total for this year will be significantly lower than for 2011, when a total of 116 deals raised US$38.6bn. However, in the US there were 67 offerings in the first 11 months of 2012, against 62 during the whole of 2011, and at US$15.8bn the US accounts for nearly 80% of the total capital raised this year.

The Asia-Pacific region, which saw 43 IPOs raise US$6bn in 2011, has managed only US$3.3bn from 31 deals so far this year of which US$2.1bn came from the dual listing of IHH Healthcare on the Singapore and Kuala Lumpur exchanges. Europe is also sharply lower, with only five deals raising US$1.4bn so far this year against 11 deals raising US$2.9bn in 2011.

“Lowered investor confidence on continued concerns around macroeconomic growth equated to lower volumes of IPOs in 2012,” said Jeffrey Bunder, global private equity leader at E&Y.

“However, those deals that priced during the year generally performed well on the first day of trading – and more importantly, the majority of those companies successfully held on to those initial gains.”

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