Private equity-backed IPOs outperforming others

Research by Cass Business School, and commissioned by the BVCA and London Stock Exchange, provides evidence on the strong performance of private equity-backed IPOs.

The key findings in the study included:

- Sponsor-backed IPOs outperformed other IPOs by more than 9% one year after their public listing.

- The same IPOs also outperformed the FTSE All Share Index by 20% over the same period.

- The average time length of time a private equity firm invests in a company before flotation is 4.5 years for venture-backed firms and 3.8 years for private equity-backed.

- Venture capital-backed IPOs typically spend up to five times as much on R&D as non-sponsored counterparts at the time of flotation.

- Private equity portfolio companies' IPOs account for more than 50% of the total number of companies in the consumer services, industrials, healthcare and technology on the main list.

- IPOs in the main market perform relatively better than companies on AIM.

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