Initial Public Offering 2009
Private Equity Firms May be Using IPO Again
Private equity firms seem to be using the Initial Public Offering as a exit strategy for their portfolio companies again. There is a reported rise in the number of companies seeking an IPO exit as private equity firms regain some faith in the market.July 2, 2009 “There’s a slow snowball picking up,” said Richard Truesdell, co-head of the global Capital Markets Group at law firm Davis Polk & Wardwell in New York. “We are miles away from the frenetic activity of 2007 but we are also hopefully miles away from the complete absence of IPOs that we had.”
A tentative rebound in shares has given rise to speculation that IPOs will return more forcefully. Since a multiyear low in March, the Dow Jones Industrial Average .DJI has risen about 30 percent. But grave concerns remain about investor appetite, the amount of leverage on companies and whether private-equity firms will get adequate returns in the market to appease the investors in their funds.
Investors are also wary of the fragility of equity markets, meaning any significant spurt of listings is a way off. That’s borne out by the small number of private equity-backed firms in registration. Owners may also seek to float just a small portion of firms and do follow-on raisings if the market improves, bankers say.
“I expect we’ll start to see filings starting shortly (from private equity-backed firms),” said Lisa Carnoy, global head of equity capital markets for Bank of America Merrill Lynch (BAC.N).
Tags: initial public offering 2009, initial public offering 2008, initial public offering, initial public offer, IPO 2009, IPO 2008, What is an Initial Public offering
Link to This Resource: Initial Public Offering 2009
http://privateequityblogger.com/2009/06/initial-public-offering-2009.html