Wednesday, May 19, 2010

PEU IPO's Give Worst 2010 Returns

Bloomberg reported private equity underwriter (PEU) sponsored IPO's in 2010 haven't fared well. The article stated:

The 13 offerings by private-equity funds have fallen 2 percent in the first month of trading after averaging gains every year since at least 2001, according to data compiled by Bloomberg and Greenwich, Connecticut-based Renaissance Capital LLC. The IPOs have also lagged behind the Standard & Poor’s 500 Index, while companies without support from buyout firms have beaten the benchmark gauge for U.S. stocks by 5.8 percentage points after their initial sales.
The piece mentions The Carlyle Group's Niska Gas Storage and Apollo's Metals USA as losers. It highlighted KKR and Bain Capital's upcoming IPO of HCA, the huge for-profit hospital company. Bloomberg failed to mention HCA's $2.25 billion in special distributions to PEU owners in 2010.

The PEU milking continues. Sometimes the product sours.