Record year for IPOs, predicts Ernst & Young

FUNDS raised through flotations could hit more than £190bn globally and set record levels by the end of 2010.

In the first 11 months of this year, IPOs worldwide have already raised almost £162bn in 1,199 deals, fuelled by economic growth and record-breaking debuts, according to research by Ernst & Young.

Ernst & Young said that by the end of this year, total global IPO values will exceed the previous record of £187bn, raised in the global fundraising peak of 2007), according to the firm’s year-end Global IPO Update.   

The fourth quarter in 2010 will also reach the highest quarterly IPO value on record, the research found.

In Europe so far, the first 11 months of 2010 have seen a 526% increase in capital raised from the same time period in 2009.

Despite market volatility exacerbated by the euro zone sovereign debt crisis, European exchanges launched 223 IPOs worth £20bn. UK exchanges led Europe in fundraising with £13bn raised in 50 offerings.

David Wilkinson, UK IPO leader at Ernst & Young, said: “There were high expectations for IPO activity in 2010, with a line-up of high profile floats. Instead, the year began with the withdrawal of private equity frontrunners, including Travelport, Merlin Entertainment and New Look.

“Sovereign debt, the General Election, a hung parliament, the Emergency Budget and the Government’s Spending Review kept IPO levels lower than expected in the first nine months of the year.   

“But there is light on the horizon. The last quarter is already shaping up well, with 17 IPOs listed so far on UK exchanges in October and November. The Betfair float in October helped to boost confidence in a dampened market, but has since suffered a fall in share price. Many UK companies are still holding back until volatility reduces and valuations improve.”