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GB : Strategy - IPO Return Study

Another hot company rings the opening bell in celebration of their IPO. But will investors be celebrating for years to come? Analysing thousands of IPOs across three developed markets yields five recommendations for providing attractive and sustained outperformance from IPO investments: 1) IPOs in the first two years after a bear market perform best, 2) The first 3 to 5 years after the IPO show the strongest growth, 3) Watch net margin declines as a trigger for lower earnings growth, 4) Newly listed companies go through a growth phase, then a reinvestment phase and a maturation phase, and 5) Share prices of UK IPOs perform much better on average than European or US counterparts.


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