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Three months removed from a dreadful 2011, the global IPO market struggled to get back on track in 1Q12. Global IPO proceeds declined 69% year-over-year to $11.4 billion and deal activity fell 53%. Despite this weak activity, the IPO market made progress in the first quarter as strong overall returns helped facilitate growing investor confidence in the asset class and as US deal activity picked up.

Global IPOs
2005200620072008200920102011 1Q111Q12
Total Proceeds (billions)$148.6$220.5$265.0$80.8$106.0$234.4$137.9 $37.2$11.4
No. of Deals346459556121179479339 9645

Note: Global IPOs includes all IPOs with deal size greater than $100 million. Data as of March 29, 2012.

In the US IPO market, IPO proceeds raised fell 58% to $5.6 billion; however, deal activity rose 28%. IPO investors favored smaller emerging growth IPOs during the period, including on-demand software firms such as Guidewire Software (GWRE: +150% from offer price) and Brightcove (BCOV: +124%) and mobile internet firms such as Yelp (YELP: +89%) and Millennial Media (MM: +92%). Returns were exceptionally strong rising 37% on average from the IPO price. 85% of IPOs this quarter have traded positively and 1 in 4 IPOs rose 50% or more from their IPO price.

2005200620072008200920102011 1Q111Q12
Total Proceeds (billions)$33.7$42.2$49.0$24.5$21.9$38.7$36.3 $13.4$5.6
No. of Deals1921962143163154125 3240

Note: US IPOs include IPOs of all deal sizes. Data as of March 29, 2012.

During the quarter, newly public companies began making up for the poor performance of 2011. The global IPO market outperformed the broader equity market evidenced by the FTSE Renaissance Global IPO Index which generated a first quarter return of 14.2%, compared to the 10.0% return of the MSCI All World Country Index. Furthermore, the US IPO market outperformed the global IPO market as the FTSE Renaissance US IPO index has produced a 19.0% first quarter return, substantially greater than the 12.2% return of the Russell 3000.

IPO Aftermarket Returns
FTSE Renaissance Global IPO Index28.8%20.5%-56.5%54.4%13.8%-20.6%14.2%
FTSE Renaissance US IPO Index17.5%15.1%-50.2%54.9%20.3%-21.4%19.0%

Note: The FTSE Renaissance IPO Index Series represents a rolling two-year population of newly public companies included after the first day of trading and weighted by float adjusted market cap. Year-to-date returns are as of March 28, 2012.

(Click to enlarge)1Q12 Chart