Click here to view the full report.
IPO activity more than doubled during the second quarter compared to the slow first quarter, which hit a 2-year low. The 70 IPOs raised almost $13 billion, with each month this quarter having the year-to-date most IPOs, the most proceeds raised and the most initial filings. Issuance rose across nearly every sector, particularly in technology, consumer, and energy. Tech and energy had uncharacteristically weak performance while consumer was the top sector for returns. Fueled by a continued wave of biotechs, the health care sector has accounted for over one in three IPOs for four quarters in a row. The IPO market offered liquidity for private equity and venture capital alike, which together backed 76% of all offerings. IPOs had a modest increase in first-day returns compared to the past year and continued to trend higher until the final two weeks of the quarter, when average returns fell to a 14% gain amid renewed concerns over Greece’s future in the Eurozone. While the second quarter ended with the VIX spiking 50% and the third quarter could see the Fed’s first rate hike since 2006, a combination of strong deal flow during the second quarter, a high number of initial filings and generally positive returns signals an active third quarter.
