December 11, 2008

It was a dismal year for taking your company public, as Ernst & Young's year-end global IPO report shows. For the year through November:
• 2008: 745 IPOs worldwide, raising $95.3 billion.
• 2007: 1,790 IPOs worldwide, raising $256.9 billion.

That's the lowest total since 1995, and full-year figures are expected to continue the trend. Some 298 IPOs were postponed or withdrawn this year vs. just 167 in 2007.
What action there was in new offerings took place increasingly in Asia (led by China), which outpaced the amount of capital raised in North America this year. New Asian public offerings raised $29.7 billion in 337 IPOs compared to North America's 91 deals worth $27 billion. By size, Visa's IPO was the years largest (and the largest ever at $19.7 billion) but of the top 20, 15 were in emerging markets.
The takeaway here is that going public is an increasingly global phenomenon, and when the world economy takes a hit there aren't really any markets that escape the pain.

Two-thirds of institutional investors surveyed will have no room left to increase their commitments to private equity funds by this time next year.
Investors in private equity funds, known as limited partners, are primarily made up large pension funds, endowments and wealthy individuals. These limited partners typically set targets for a specific percentage of their overall pool of money that is allocated to private equity. That pool, however, has shrunk because of the drastic drop in stocks, bonds and other investments over the last year. (A lot of limited partner capital is also locked up in money-losing hedge funds.)
Since private equity funds are illiquid long-term commitments — cash is typically locked up for 10 years — the percentage allocated to private equity will likely exceed many limited partners’ targets.

A year from now, 28 percent of the limited partners surveyed by Coller Capital expect to exceed their allocation targets. That means they will likely have to sell their interest in private equity funds at a discount on the secondary market to firm’s like Coller.