Where Did The IPOs Go?

Updated after jump While moderating a panel at Buyouts Symposium East earlier this year, I asked about the surprising lack of buyout-backed IPOs in 2007. Each panelist looked at me quizzically, and responded that it was just a statistical anomaly that would soon correct itself (save for one panelist who said my numbers must be wrong).

That was April 17, at which point only six buyout-backed offerings had priced on U.S. exchanges. There have been nine more in the proceeding eight weeks, but it still qualifies as a prolonged slowdown. Check out these quarterly numbers, courtesy of Thomson Financial:

Q1 04: 13
Q2 04: 8
Q3 04: 17
Q4 04: 20
Q1 05: 15
Q2 05: 19
Q3 05: 23
Q4 05: 10 
Q1 06: 17
Q2 06: 17
Q3 06: 10
Q4 06: 22
Q1 07: 6
Q2 07: 9

Of equal import is that no one seems able to explain what’s happening (yours truly included). There are plenty of buyout-backed companies of age to be acquired, the public markets are robust (save for a recent hiccup) and aftermarket performance has been generally strong for those companies that do manage to price. Moreover, venture capital-backed companies just had their most voluminous month since October 2004 (NVCA.pdf).

My panelists might be right that this an anomaly that will “soon” be corrected – but I don’t see how conditions could get much better. Of course, I also can’t identify what is hindering offerings today…

Update: Some commenters have been questioning the data, which comes from Thomson Financial. I asked someone else at Thomson to run the numbers, and they come up with the same thing. Here is a more detailed version: IPO_Data.xls

In fact, the more detailed data makes things look worse. Buyout-backed IPOs have accounted for just 15.15% of all U.S. IPO pricings so far in 2007. This compares to a 50% mark for the first half of 2006, and a 46.47% mark for the entire year.

As for the WSJ story that keeps getting mentioned, I can’t find it. If you can, please email it to me