Private Equity Backed Ipo Performance

Private equity backed ipo performance

The Performance Private Equity Backed Ipos

37 PagesPosted: 26 Oct 2007Last revised: 22 Dec 2010

Date Written: December 2010

Abstract

The paper examines the aftermarket performance of private equity-backed initial public offerings (IPOs) based a hand collected sample of private equity-backed and equivalent samples of venture capital-backed and other non-sponsored issues on the London Stock Exchange.

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The evidence suggests marked differences across the three groups in terms of market size, industry classification and key operating characteristics at the time of flotation. Private equity-backed IPOs exhibit superior performance compared with their counterparts throughout the 36 months period in the aftermarket; such performance is robust across different benchmarks and estimation procedures.

Private equity backed ipo performance

The performance of private equity-backed IPOs is positively related to their level of leverage and the proportion of equity maintained by the private equity sponsors immediately after flotation.

Keywords: IPOs, Private Equity, Venture Capital, Long-run performance

JEL Classification: G1, G2, G3, G10, G23, G34

Suggested Citation:Suggested Citation

Levis, Mario, The Performance Private Equity Backed Ipos (December 2010).

Available at SSRN: https://ssrn.com/abstract=1108343 or http://dx.doi.org/10.2139/ssrn.1108343

Private equity backed ipo performance