Private equity exits: to invest or not to invest?

Not all IPOs are created equal. It isn't imprudent, considering recent events, to ask yourself: “If I buy shares in an IPO that represents an exit by a private equity group, will I be comprehensively done over?” To judge by recent comments and the much picked over collapse of the Dick Smith Group, you would be, but the statistics indicate that in fact over the long haul, you would be better off actually backing PE exits than avoiding them. That’s not just the opinion of the PE industry, which of course wants you to do exactly that, but also of a study by Deloitte called the 2016 IPO report. So what’s the catch? The catch is that the trend went the other way in 2015 so, as with many pieces of analysis, it all depends on what date you start from. As the latest report from the Australian Private Equity and Venture Capital Association (AVCAL) admits, “PE backed IPOs in 2015 underperformed non-PE backed IPOs’’. Continue reading: (VIEW LINK)


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