Outlook for 2009 IPOs
December 2008
Volume will stay low, but we expect returns to improve
- IPO activity will be low in 2009, but new issues could produce healthy returns
- High-growth stories are less likely to be successful as investors lean toward defensive sectors
- Private equity may be a source of several large deals toward the end of the year
- Although many companies have withdrawn IPO filings, there are still 100+ US operating companies in the pipeline
- As in 2008, there will likely be several privatizations going public on foreign markets
With IPO volume low, many investors will be tempted to ignore the IPO market altogether as we move into 2009. This
may be a mistake. Historical precedent suggests that IPOs in periods of low issuance can generate very strong returns
as companies are forced to become more realistic with their proposed valuations in order to successfully raise capital,
thereby creating opportunities for investors.
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