What happens when PE-owned companies return to the public equity markets through IPOs?
A. Private equity investment makes companies stronger when they enter public equity markets. According to a 2006 study, the share price of companies owned by PE firms for a year or more that went public between 1981 and 2003 outperformed the stock market as a whole over a three-to-five year period. The PE-backed IPOs were on average much larger in size, more profitable, and were backed by more reputable underwriters.
