While 2014 was a record year for initial public offerings (IPO), the current year is the worst since 2009 measured by dollars raised. In 2015 a total of 170 companies launched into the public markets according to IPO ETF manager Renaissance Capital, and those companies raised a total of $30 billion. In 2014, 275 companies came public and raised $85.3 billion.
Renaissance Capital reported that the average return this year was a negative 3.8%, well below 2014’s average return of 21% and 2013’s whopping 40.8% return. Some 58% of all 2015 IPOs traded below the issue price by the end of the year.
Here are 2015’s top 10 IPOs by deal size and return:
- First Data Corp. (NYSE: FDC) – $2.56 billion; -0.6%
- Tallgrass Energy GP LP (NYSE: TEGP) – $1.2 billion; -45.1%
- Columbia Pipeline Partners LP (NYSE: CPPL) – $1.08 billion; -31%
- Ferrari NV (NYSE: RACE) – $893 million; -6.2%
- Univar Inc. (NYSE: UNVR) – $770 million; -23.6%
- Fitbit Inc. (NYSE: FIT) – $732 million; 47.5%
- Blue Buffalo Pet Products Inc. (NASDAQ: BUFF) – $677 million; -10.1%
- TerraForm Global Inc. (NASDAQ: GLBL) – $675 million; -70.1%
- TransUnion (NYSE: TRU) – $665 million; 15.2%
- EQT GP Holdings LP (NYSE: EQGP) – $621 million; -24.9%
Only two posted positive returns and the four energy IPOs were the big losers. Energy IPOs dropped from 30 in 2014 to 12 this year and cash raised fell from $12.7 billion to $5.5 billion.
Private-equity backed IPOs totaled just 39 in 2015, down from 71 and 68 in the previous two years. Of that total, 14 leveraged buyout IPOs managed an average gain of 4% while the 25 growth-equity IPOs averaged a loss of 4%.
Venture capital backed 50% of all IPOs in 2015, the largest portion in over 10 years, but that was largely due to the low number of deals completed. VC-backed IPO exits dropped 33% due to 19 fewer biotech IPOs and 18 fewer tech IPOs according to Renaissance Capital. Tech IPO proceeds totaled just $2.6 billion and proceeds from all VC-backed IPOs fell 75% year-over-year.
And lest we think that was all due to the $22 billion Alibaba IPO in 2014, Renaissance Capital noted that even excluding that huge deal proceeds in 2015 would have been 35% lower.
Renaissance Capital’s current IPO pipeline for the coming year shows 110 companies looking to raise a total of $26 billion. The largest IPOs in that pipeline are Albertsons Companies ($1.6 billion), Univision ($1 billion), Neiman Marcus Group ($1 billion), and Laureate Education ($1 billion).
Renaissance Capital’s year-end review includes much more information on 2015’s IPO performance.