IPO markets around the world began to gently reopen in Q2, and a number of listings were successfully completed in North American and Asia. Australian equity managers have shown no appetite for IPOs since late 2007, but they certainly haven't been sitting on their hands. Our equity markets have experienced extraordinary levels of activity driven by de-gearing and de-risking of ASX companies. In fact, Australian equity issuance represented 18% of global issuance in Q1. . . pretty incredible for a country of just 22 million people.
The Australian recap process is now largely complete, our banks are in good shape, the ASX has been experiencing a sustained rally, and consumer confidence is surprisingly strong. Many of our superannuation funds and small cap managers missed the recent rally and urgently need to rebalance cash-heavy portfolios.
It all adds up to a private equity led Aussie IPO boom in Q4.
There's a backlog of IPO quality companies sitting in Aussie PE portfolios and it's been a long time since most of the teams banked a carry cheque. Is that fresh prospectus ink I smell wafting from office buildings across Sydney?
IPO watch candidates include:
Myer (Australia's largest department store family, TPG Capital)
NDA Group (Stainless steel fabricator, RMB Capital Partners)
Ascendia Retail (Sports stores, Archer)
iNova Pharmaceuticals (old 3m Asian pharma business, Archer)
Healthcare Australia (CHAMP)
Kathmandu (Outdoor clothing and equipment stores, Quadrant and GSJBW)
Link Market Services (Share registry, Pacific Equity Partners)
And in the medium term: Device Technologies (Medical device distributor, RMB Capital Partners), Mastermyne (Coal mining services, CHAMP Ventures), Hoyts (Cinemas, Pacific Equity Partners), ATF (temporary fencing, Quadrant)