The Performance of Private Equity-Backed IPOs

My paper examines the aftermarket performance of private equity-backed initial public offerings (IPOs) and compares it to the performances of equivalent samples of venture capital-backed and other nonsponsored issues on the London Stock Exchange during the period 1992-2005. The evidence suggests marked differences across the three groups in terms of market size, industry classification, first-day returns, and key operating characteristics at the time of flotation. In fact, private equity-backed IPOs are larger firms in terms of sales and assets, more profitable, and relatively modest first-day returns. In the three years following the public listing, they display better operating and market performance when compared to other IPOs and the market as a whole.