Bankers Think PE Will Fuel IPOs, Survey Says
Technology, energy, biotechnology and health care will comprise the lion's share of IPOs this year
January 12, 2010
Investment bank executives expect a strong increase in initial public offerings from private equity-owned companies in 2010, according to a survey by financial advisory firm BDO Seidman LLP.
Sixty-two percent of bulge-bracket bank respondents believe that portfolios of buyout groups will serve as the main source of IPO activity. As for other new issuance activity, spinoffs, divestitures, venture-capital firms and privately held businesses will provide the rest of new issues in the year, the survey of 100 capital markets professionals found.
“Overall, the bankers’ outlook for IPOs is very positive, but some industry sectors are clearly seen as stronger than others," said Jay Duke, a partner in the capital markets practice at BDO Seidman, in a statement.
Technology, energy, biotechnology and health care were identified by respondents as the industries that will command the lion's share of IPOs. Within the energy space 58% of respondents indicated that alternative energy will comprise a significant part of energy-related IPOs in 2010.
Almost half, or 46%, of respondents expect that IPO activity will peak in the third quarter, while 33% indicated the second quarter will generate the most offerings.
As it pertains to the exchanges, 76% thought that the Nasdaq will be the main venue for new equity issuance in 2010. By contrast, 24% predicted the New York Stock Exchange would list the most IPOs.
Forty-four percent of BDO survey respondents, meanwhile, viewed improvement in stock market performance as one primary reason for the rebound in IPOs in the latter half of 2009. Separately, 25% indicated improved investor confidence was another reason for the increase in new issues in the last six months.
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