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AltAssets is the private equity news and research service from Almeida Capital
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PRINT THIS PAGE UK private equity-backed IPOs outperform market over 12 months, Cass report29/04/2008. Source: AltAssets. 
Private equity-backed IPOs outperform other IPOs by more than nine per cent one year after their public listing, research published by Cass Business School, London, found. The research was commissioned jointly by the British Private Equity and Venture Capital Association and the London Stock Exchange. Private equity-backed IPOs also outperform the FTSE ALL Share Index by 20 per cent over the same period.
The report also shows that venture capital-backed IPOs typically spend up to five times as much on R&D as their non-private equity-backed counterparts at the time of flotation.
Typical private equity-backed IPOs spend twice as much on capital expenditure in relation to total assets as non-private equity-backed companies.
Simon Walker, chief executive of the BVCA, said, 'This research provides more evidence of the way in which private equity is good at building better businesses by growing value. The figures on spending on R&D and capital investment underline the big contribution that private equity and venture capital make to creating both businesses and an economy that are more innovative.'
Professor Mario Levis, author of the report, added, 'The study shows significant aftermarket performance for private equity-backed IPOs. Such IPOs are more profitable, they are run more efficiently and they invest more in both physical assets and R&D than their non-private equity backed-counterparts. Investors will increasingly look for such attributes in companies seeking a public listing under the challenging current market conditions.'
IPOs in the Main market perform relatively better than their AIM counterparts.
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