A closer look IPOs and Shifting Market Trends
Feb 23, 2021
- Despite a volatile year for equities, the IPO (initial public offering) market proved to be surprisingly strong in 2020, and many signs indicate IPO volume will remain elevated in 2021.
- The recent IPO boom diverges from the past two decades, which saw a decline in listed public companies as many firms opted to remain private longer and merger and acquisition activity increased relative to public offerings.
- Despite comparisons to the dot-com bubble of the late 1990s, recent IPOs differ from prior waves in several key ways. Additionally, the IPO process itself is changing with a rise in direct listings and SPACs (special purpose acquisition companies).
- Bessemer’s approach has been to employ disciplined fundamental analysis when evaluating investments in newly public companies. Bessemer portfolios with alternatives have benefited from investments in early-stage growth companies, many of which have recently gone public.