This study aims to analyse whether PE-backed IPOs in the UK in a
post-financial crisis period retain to show first day underpricing, as
it is true for average IPOs. However, more importantly is to find
whether consisent with Johannson (2011), who found that European
PE-backed IPOs have less underpricing, 4.67% compared to 16.40% in case
of average IPOs, in paricular PE-backed IPOs in the UK show less
underpricing than their non-backed counterparts. In the past, that is
found true for PE-backed IPOs on the LSE between 1992 and 2005, and
PE-backed IPOs on the LSE and the Alternative Investment Market (AIM)
between 2011 and 2011. Hence, the first research question is: Do
PE-backed IPOs in the UK show less underpricing on the initial day than
non-sponsor backed IPOs in a post-financial crisis period? And secondly,
do PE-backed IPOs in the UK in the long-run outperform non-sponsor
backed IPOs in post-financial crisis period? One rationale is to examine
whether equity markets experienced structural changes which might
potentially affect the performance of PE-backed IPOs, which were deemed
as such with superior returns. From a practical perspective, this study
aims to make a contribution to investors who consider investing in
equities in that sense, that it allows to better understand the
aftermarket performance of PE-backed IPOs in the UK in a period after a
major global financial crisis.
