US IPO Market Off to a Slow Start: Renaissance Capital's 1Q 2015 Review

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2015 US IPO Market Off to a Slow Start
After a record year in 2014, the IPO market slowed dramatically in the first quarter of 2015. The 34 IPOs raised $5.4 billion, making it the least active quarter by IPO count since the 1Q 2013 and the smallest by proceeds raised since the 3Q 2011. Led by biotechs, the health care sector stayed active, accounting for half of all IPOs. While recognizable brands like Box, GoDaddy and Shake Shack became publicly listed, technology, consumer and energy offerings fell below their historical averages and unlike recent years there were few large LBO exits. Technology IPO issuance was likely dampened by the widespread availability of private funding at very high valuations, which produced little urgency for companies to seek IPO capital. Volatile currency markets, global interest rate movements and heightened follow-on activity also competed for the attention of institutional investors. However, the solid performance of recent IPOs combined with a large active pipeline should support a more active second quarter.