Private equity exits by IPO to hit record high

SHARE offerings by private equity-backed firms are set to reach a record high this year as funds take advantage of the market upturn to exit deals, research showed yesterday.

Funds have taken 11 companies public already this year, raising a total $10.2bn (£6.3bn), and there are many more waiting, data from research firm Preqin found.

Recent exits include US pipeline company Kinder Morgan’s $2.9bn initial public offering this month – the biggest private equity-backed IPO ever – from Highstar Capital, Carlyle, Riverstone and Goldman Sachs.

“With numerous forthcoming proposed deals in the pipeline, 2011 looks set to be a record-breaking year for these exits,” said Preqin’s deals data manager Manuel Carvalho.

Last year 145 IPOs and share sales raised $38.7bn for private equity funds – double the value seen in 2009 and 12 times the level raised in 2008. A greater proportion of private equity exits were through public markets last year too – 17 per cent of exits in 2010, up from five per cent in 2008.

IPOs anticipated soon include a $3.7bn flotation of US healthcare provider HCA, whose owners include Bain Capital, KKR, Citigroup and Merrill Lynch.