Private Equity-backed IPOs – a recipe for success?

Abstract: The purpose of this paper is to study and compare the underpricing and long-term performance of Initial Public Offerings of companies backed by Private Equity-firms to Initial Public Offerings of companies not backed by Private Equity-firms on the Nordic stock exchanges between 2007-2018. The sample consists of 92 companies that have went public on any of the Nordic stock exchanges between 2007-2018, with an IPO size of at least EUR 100 million. The OMX Nordic All Share has been applied as benchmark index. The study concludes that no significant differences in the underpricing between the PE-backed and non-PE-backed IPOs can be identified, and the chosen variables cannot with statistical significance be confirmed to impact the first day of trading. Furthermore, non-PE-backed IPOs have overperformed to PE-backed IPOs in the sample