It is a testament to the resilience of global economies, entrepreneurship, and financial animal spirits that the global IPO market rebounded as quickly and strongly as it did in 2009 after the devastations of worldwide stock markets and banking systems in 2008. 2009 will be seen as a transition year between crisis and recovery to normalcy. While aggregate global proceeds are still well below normal levels, issuance accelerated through the year, creating a solid foundation for 2010.
The revival of the global IPO market was uneven. There were stark differences in the characteristics of IPOs originating from the dominant global players, the US and China. US-based IPOs were led by LBOs and mortgage REITs, reflecting private equity investors' need to deleverage on one hand and financial opportunism on the other. In contrast, Chinese IPOs, whether debuting in the US, China or Hong Kong, raised money to pour into China's domestic infrastructure, its nascent pharmaceutical industry, and other consumer-oriented enterprises. In a nutshell, the US IPO market activity has largely been geared to healing the excesses of overleveraging in private equity and real estate, while the Chinese IPOs reflect a growth economy.
That said, there are signs that traditional growth IPOs are returning in the US. There are over 20 venture capital-backed IPOs in the pipeline and the shadow pipeline for 2010 holds at least 50 more. A significant comeback of traditional growth IPOs would signify a return of US economic growth, as young, fast-growing companies use IPO proceeds to hire new employees and invest in their businesses.
Read our full 2009 Annual Global IPO Review.
