Chicago-based accounting and financial consulting firm BDO USA LLP released its survey of capital markets executives on Tuesday, Jan. 8, regarding the upcoming year's IPO expectations.
"In 2012, the number of U.S. IPOs was relatively flat with activity in 2011, but total proceeds raised were the second-most in the past 10 years, trailing only the pre-crisis high of 2007," said Brian Eccleston, a partner in BDO's capital markets practice, in a statement accompanying the results. "If you remove Facebook from 2012 figures, the bankers' projections for the coming year represent an approximate 28% increase in proceeds."
The value of issues domestically in 2012 totaled $42.6 billion, according to data from Renaissance Capital.
The May 18, 2012, debut of Facebook Inc., which raised about $16 billion through a 421 million share offering, did indeed skew results; more than a third of 2012 proceeds were attributable to that one IPO.
Absent the Facebook offering, proceeds would have been the lowest since the height of the financial crisis in 2009, Eccleston said.
Overall, bankers predicted a 6% increase in the number of U.S. IPOs this year, over the 128 that were launched in 2012, according to Renaissance Capital. They anticipate that these IPOs will have an average value of $250 million, which projects to $34 billion in total IPO proceeds on U.S. exchanges for 2013.
About two-thirds of the bankers polled predicted an increase in offerings in sectors such as healthcare, technology, biotech and energy. Real estate also was noted by a majority of those polled as a sector that would see a rise in offerings.
"The Affordable Care Act is going to have a major impact on [healthcare and real estate]," BDO capital markets partner Lee Graul said in a phone interview. "With the increased utilization of healthcare, doctors providing more services, they're going to need more medical buildings. That's good for people who construct them.
Also, lower interest rates are good for builders across the board," Graul added.
Survey respondents cited the biggest threats to the IPO market in 2013 as tax increases and government spending cuts (37%), while 34% highlighted global political and financial instability. Other potential problems for the IPO market cited were high unemployment, constrained bank lending, and competition from foreign exchanges.
Private equity portfolio companies were predicted to be the most fruitful source for IPOs. VC funds, owner-managed private businesses, and spinoffs and divestments are the other likely sources, survey participants said.
BDO is the U.S. arm of the U.K.'s BDO International Ltd. and serves clients through 45 offices nationwide.
Investment bank Berkery, Noyes & Co. hired Vineet Asthana (an avid squash player) as a managing director in the telecom, media and technology group. For other updates launch today's Movers & shakers slideshow.
If Warren Buffett is right that investors should be fearful when others are greedy and greedy when others are fearful, it's time to be greedy-at least with oil and gas stocks. And two big oilfield services mergers are creating perhaps the best bets. More video