Private equity firms may still be struggling to access capital for new funds. However, they are aggressively laying the groundwork for cashing out of earlier deals.
As the IPO market slowly recovers, private equity-backed deals are picking up as well. So far this year, 10 PE-sponsored companies have gone public, raising $2.2 billion, according to Greenwich, Connecticut-based Renaissance Capital. This works out to 27 percent of the 37 total IPOs completed so far this year.
What’s more, PE deals have accounted for 40 percent of the total IPO-related proceeds this year since these are typically larger deals. Last year, 22 of the 63 total IPOs, or 35 percent of the total number, were private equity backed deals, according to Renaissance.
“Investors are more comfortable with PE deals,” says Kathy Smith, chairman of Renaissance. She says investors figure the best holdings are coming out of the PE portfolios these days as the generally shaky IPO market tries to regain some stability. And these deals are typically larger than non PE-backed IPOs. ....