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PE-backed IPOs reach four-year high in second quarter

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Chinese and Indian firms contributed $2.7 billion of the $17.2 billion raised through IPOs by private equity-backed companies worldwide in the second quarter of 2011, according to Ernst & Young. The proceeds, which came from 45 offerings, represent the highest quarterly total since April-June 2007.

The $2.7 billion from China and India was generated by nine deals, compared to $1.5 billion from six deals in the previous quarter. There were 12 listings on Asian exchanges specifically, raising a total of $3.2 billion, up from six deals and $1.3 billion for January-March. It is worth noting, however, that 28 China-related deals were postponed or withdrawn in the second quarter, due to weak market sentiment.

So far this year, private equity-backed firms have raised $31.1 billion in 68 IPOs. Activity is such that the full-year total may exceed the $58.3 billion raised in 2007, when the market was at its peak.

"Despite ongoing uncertainties in the markets, momentum is clearly continuing to build across the IPO markets. This is giving PE sponsors an ever-widening window to exit holdings as investors move further out of the risk spectrum in search of companies with strong growth stories," said Jeffrey Bunder, global private equity leader at Ernst & Young.

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