Renewable Energy Group (REGI), the leading domestic producer of biodiesel, priced at $10.00 on Wednesday, below the proposed range of $13.00 to $15.00. In its first day of trading, the stock finished at $10.10, up 1%. Renewable Energy Group was the first IPO of the year to price, but we do not believe the lackluster showing is necessarily indicative of current demand for IPOs. Alternative energy IPOs tend to appeal to a somewhat limited subset of investors, and there was likely skepticism about the deal because of poor trading from 2011 biofuels IPOs and the fear of negative impact from regulatory changes. More pertinently, the FTSE Renaissance US IPO Index is up 8.5% YTD, against 4.5% YTD for the S&P 500, indicating that recent IPOs are performing well overall and investor risk appetite for newly public companies is increasing. With 10 deals pricing in the next two weeks, the true investor appetite for IPOs should become clearer soon.