Australian PE Backed IPOs Outperform


April 16, 2014

At DealMarket Digest, we like to highlight news that goes against conventional thinking PE (positive and negative). Today under the heading of myth-busting, we picked up on the news about an Australian study that shows that “contrary to market perceptions”, initial public offerings that are backed by private equity firms have outperformed other floats in the market.


It said that PE-backed floats listed between 2003 and February 2014 posted an average return of 95 per cent since listing, compared with a 2.2 per cent decline for floats that were not backed by private equity. There has traditionally been skepticism about PE-backed floats, as we have reported here.


The study was undertaken by AVCAL an Australian buyout industry lobby group, said the report. The journalist did not seek commentary from less involved capital market analysts for the article. The AVCAL study is available here. It used a number of time periods for its analysis, weighted returns and absolute return scenarios were part of the analysis.

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