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Private Equity Buyout- and Venture Capital-Backed IPOs, 2008 - 2013 - May 2013

by Jonathan Parker

  • 23 May 2013
  • PE

The initial public offering has long been a key exit route for fund managers, both in the private equity buyout space and venture capital. However, there have been contrasting trends in the prominence of IPOs as an exit type for buyout and venture capital fund managers. In 2012, 67 venture capital-backed IPOs were completed globally with an aggregate value of $22bn, compared to 54 buyout-backed IPOs valued at a total of $16bn. This represents the only year in the period from 2008 to 2012 that the number and aggregate value of venture capital-backed IPOs outweighed that of buyout-backed IPOs, albeit with Facebook’s $16bn IPO in May of last year heavily skewing the aggregate value of venture capital-backed offerings.

In 2008, just nine venture capital-backed IPOs were completed globally, with an aggregate value of $961mn, which increased to 22 in 2009, valued at $2.0bn. The following year witnessed another sharp increase in IPO activity, with 68 valued at a total of $5.6bn. Interestingly, 2011 saw a slight drop in terms of numbers with 55 IPOs, yet the aggregate value rose once again to $7.7bn. 2012 saw a recovery in the number of venture capital-backed IPOs to 67 and another increase in the aggregate value, to $22bn. However, it is worth noting that if Facebook’s IPO is discounted from these figures, the aggregate value would have been just $5.7bn – $2bn lower than in 2011, despite the higher number of offerings. Although 2013 has so far seen just 25 venture capital-backed IPOs valued at a total of $1.6bn, encouragingly there are 29 venture capital-backed companies globally that currently have an active IPO filing and the estimated aggregate value of these offerings is $4.5bn.

Private equity buyout-backed IPOs showed a similar trend to their venture capital-backed counterparts, with 23 IPOs in 2008, rising to 46 in 2009 and 82 in 2010, then falling to 67 in 2011. Similarly to venture capital-backed IPOs, the global aggregate value also rose in each year, starting at $6.7bn in 2008 and rising to $17bn, $24bn and $38bn in 2009, 2010 and 2011, respectively. In contrast to the recovery in number of venture capital-backed IPOs in 2012, the number of buyout-backed IPOs fell to 54, with the global aggregate value dropping significantly to $16bn. In the year so far, there have been 31 private equity buyout-backed offerings globally valued at a total of $10bn and there are currently 20 private equity buyout-backed companies that have an active IPO filing. The estimated aggregate value of these is $5.7bn, so it is quite possible that 2013 will see an increase in private equity buyout-backed IPO activity over 2012, both in terms of the number and aggregate value of offerings.

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