Skip to main navigation

Global IPO trends 2012 - Private Equity: a tale of two markets - EY - Global

Global IPO trends 2012: Prepare early, move fast

Private Equity: a tale of two markets

  • Share
“In early 2012 there are signs that the market is coming back.”
Jeff Bunder,
Global Private Equity Leader,

After an active 2010, which saw 155 PE–backed companies raise more than US$35b, the PE–backed IPO market continued to improve in the first half of 2011. With 70 companies raising US$31.4b in the first six months, the industry was on pace for its best year on record.

However issuance took a dive midway through the year, as investor concerns about Europe’s sovereign debt issues, the US economy and Asian corporate governance hurt sentiment. Overall, PE–backed deals raised US$38.3b in 118 separate listings in 2011, accounting for 23% of global IPO proceeds — the highest percentage on record.

PE–backed companies raised record amounts

We saw a succession of record–breaking PE–sponsored deals listing in the US last year, despite the market gloom. In February, Kinder Morgan, a Texas–based pipeline operator, completed a US$3.3b IPO on the New York Stock Exchange (NYSE).

The float was the biggest PE–backed IPO in history, until March, when HCA Holdings, the largest hospital operator in the US, went public on the NYSE to raise nearly US$4.4b.

Pipeline grew as filings outpaced offerings

Filings for PE–backed IPOs have exceeded sponsored deals brought to market by a significant margin over the last two years. More than 160 companies have filed to go public since January 2011, leading to a rapid expansion of the sponsored pipeline.

Currently, more than 80 companies have filed and are preparing to go public, which could raise more than US$20b in total. Add to that a sizeable shadow pipeline of companies that are interested in going public but have yet to file, and there is a long line of IPOs waiting for the right market conditions.

Bright spots in emerging Europe

Activity dried up across Europe’s developed markets, but some of the region’s emerging countries showed signs of life. In Poland, two PE–backed companies went public, raising US$173.1m, adding to the three which debuted in 2010.

Further afield, we saw significant PE–backed deals in South Africa.

Most deals achieved the desired price — or better

Pricing generally improved for PE–backed deals compared to 2010. Some 76% of Americas and EMEA listings opened within or above their pricing range, against just 62% in 2010. Two factors account for this: the window for IPOs was wide open in the first part of 2011, and in the second half, many companies pulled deals to avoid pricing pressure when markets tightened.


Private equity firms will want to return monies to their investors so they will continue to look for exit opportunities. But they’ll want to wait for the right market conditions. Most firms have spent years driving transformational change and making operational improvement in their portfolio businesses; they will want to realize the full value of their efforts.

While there are signs in early 2012 that the market is coming back, particularly in the US, which has seen strong share performance by the NYSE and NASDAQ, PE will explore alternative exit routes if necessary to capture that value.

Trade exits to cash–rich strategic buyers and secondary deals with PE firms, seeking to deploy a measure of the industry’s estimated US$365b in dry powder, will also be attractive options.

Rise in venture capital (VC) backed IPOs

VC firms exited 141 companies via IPOs in 2011, raising US$17.3b — a 26% increase by capital raised in 2010 (128 deals, US$13.7b). In China and India, IPOs represent the vast majority of exits for VC-backed companies.

But in the US, Europe and Israel, the main exit route for VC-backed companies is acquisitions (M&A), representing more than 90% of all exits. Furthermore, VC firms are also selling companies to private equity firms as a third path to liquidity. We expect these trends to continue.

<< Previous


EY - Global IPO trends 2012: Prepare early, move fast

Related content


  • Global IPO activity rose in Q2
    Even without Facebook’s IPO, which made up 38% of capital raised in Q2, overall global IPO activity in Q2 was 49% higher than Q1.


EY - Maria Pinelli

Maria Pinelli
Global Strategic Growth Markets
+44 207 980 0960

Back to top