The British Private Equity and Venture Capital Association (BVCA) and PwC have published a report on private equity-backed IPOs in the United Kingdom (“PE-backed IPOs”) between 2009 and 2017.

The report looks at a number of metrics, including pricing and performance and use of proceeds, to build a picture of the IPO market and key trends in the market.

Highlights from the report include the following:

  • PE-backed IPOs have resulted in trading 43.9% higher on average than their offer price for the period from the IPO to 31 December 2017. This compares with non PE-backed IPOs, where trading is 26.6% higher on average.
  • The top ten PE-backed IPOs between 2009 and 2017 accounted for 37% of total proceeds from PE-backed IPOs during that period.
  • During recent years, the UK IPO market has been dominated by PE-backed IPOs. The peak occurred in 2014, with 32 PE-backed IPOs raising over £9 billion, and 2015, when PE-backed IPOs represented just under 90% of all IPO proceeds.
  • Of the top ten PE-backed IPOs, Worldpay Group plc’s £2.1 billion IPO in 2015 remains the largest. Only one PE house was involved in more than one of the top ten PE-backed IPOs.
  • When measured both by number of IPOs and by proceeds, there is a slight bias across PE-backed IPOs towards the consumer services sector.
  • On average, 61% of proceeds on PE-backed IPOs came from a secondary sale of shares by selling shareholders, and 39% derived from the issue of new shares.
  • In 46% of PE-backed IPOs, the primary use of the IPO proceeds was to repay debt (compared with 11% in non PE-backed IPOs, which directed proceeds more towards growth objectives).
  • The report contains a list of PE houses ranked by number of IPO exits during the period and by total proceeds.
  • 99 out of 100 PE-backed IPOs reported a lock-up period. Of these, 75 declared a lock-up period of 180 days, 21 used a longer lock-up period, and only three used a shorter period. Non PE-backed IPOs, by contrast, were more evenly spread across periods of 180 days, 360 days, and 365 days or longer, suggesting generally shorter lock-up periods for PE-backed IPOs.
  • In line with this, where a PE-backed IPO was followed by a further offer, the further offer normally occurred within 180 to 360 days after IPO. For non PE-backed IPOs, the further offer normally occurred more than 360 days after IPO.
  • The average holding period over the last five years has been five years or slightly longer.