From Good To Public
Steve Schaefer, 06.09.09, 06:00 AM EDT
The IPO markets are opening up, at least for mature companies.
The market for initial public offerings fell off the table in the second half of 2008, but at least one high-profile money management firm is embracing signals of increasing activity and looks ready to jump in with both feet.
On Monday, Fidelity Investments announced it struck a deal with private equity shop Kohlberg Kravis Roberts ( KFN - news - people )that will give its retail and institutional clients exclusive access to portions of the initial and follow-on offerings of KKR-owned companies.
Mark Haggerty, president of Fidelity's institutional trading division of Fidelity Investments, said "while it's no secret that the IPO market has slowed over the last couple of years, we are beginning to see signs that it may be picking up momentum."
Fidelity is hardly the only firm noticing the trend, but even with the few offerings that have priced in 2009 performing well, underwriters are cautioning that only the most well-prepared companies will be able to take advantage of a buildup of cash on the sidelines anytime soon.
Only five IPOs priced on the New York Stock Exchange from January to April, and only one U.S.-based company completed an initial offering on the Nasdaq through late May. The trend has been in play since 2008, when the number of offerings on both exchanges tumbled, falling to 49, from 256 in 2007, on the NYSE and 13, from 133, on the Nasdaq.
Bob McCooey, senior vice president of new listings and capital markets at the Nasdaq OMX Group ( NDAQ - news - people ), said the IPO market "fell off a cliff in the second half [of 2008]." All is not lost though. With an equity market rebound from early-March lows has come some renewed appetite for new companies among institutional investors, but that demand is discerning.
Steve Schaefer, 06.09.09, 06:00 AM EDT
The IPO markets are opening up, at least for mature companies.
The market for initial public offerings fell off the table in the second half of 2008, but at least one high-profile money management firm is embracing signals of increasing activity and looks ready to jump in with both feet.
On Monday, Fidelity Investments announced it struck a deal with private equity shop Kohlberg Kravis Roberts ( KFN - news - people )that will give its retail and institutional clients exclusive access to portions of the initial and follow-on offerings of KKR-owned companies.
Mark Haggerty, president of Fidelity's institutional trading division of Fidelity Investments, said "while it's no secret that the IPO market has slowed over the last couple of years, we are beginning to see signs that it may be picking up momentum."
Fidelity is hardly the only firm noticing the trend, but even with the few offerings that have priced in 2009 performing well, underwriters are cautioning that only the most well-prepared companies will be able to take advantage of a buildup of cash on the sidelines anytime soon.
Only five IPOs priced on the New York Stock Exchange from January to April, and only one U.S.-based company completed an initial offering on the Nasdaq through late May. The trend has been in play since 2008, when the number of offerings on both exchanges tumbled, falling to 49, from 256 in 2007, on the NYSE and 13, from 133, on the Nasdaq.
Bob McCooey, senior vice president of new listings and capital markets at the Nasdaq OMX Group ( NDAQ - news - people ), said the IPO market "fell off a cliff in the second half [of 2008]." All is not lost though. With an equity market rebound from early-March lows has come some renewed appetite for new companies among institutional investors, but that demand is discerning.
