Seeking Alpha

Private equity IPOs keeping IBs in the chips

  • Private equity firms have paid $1.3B this year to investment banks like JPMorgan (JPM +0.4%) and Goldman Sachs (GS +0.8%) for their assistance with arranging IPOs of portfolio companies, according to Dealogic. That's more than double the $498M paid over the same period in 2013.
  • The share price performance of the IPOs leaves something to be desired - up 8.1% so far vs. a 25.9% gain for IPOs of businesses not backed by P-E. On the other hand, IPOs from P-E firms have performed better over the long-term - those from 2010, for example, are up 48.4%, while all other IPOs are down 19.2%.
  • Goldman has the largest share of global fees from P-E firms with 11.1%, followed by JPMorgan with 8.2%. Bank of America (BAC -0.3%) has a 7.2% share.
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