The next 12 months may not prove as rich for initial public offerings as the last year. But to Wall Street bankers, 2014 still promises an abundance of opportunity.
And that could include what may be one of the biggest market debuts in years: that of Alibaba, the Chinese Internet behemoth.
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Even as global merger activity turned in another lackluster performance, the business of taking companies public soared. The amount raised by IPO's in the United States last year jumped 40 percent over 2012, to $59.3 billion, according to data from Thomson Reuters.
Overall activity in equity capital markets banking totaled nearly $797 billion for the year, up 27 percent and one of the best years in recent memory. Fees for bankers in the field rose 34 percent from the previous year, to $17.9 billion, in what Thomson Reuters described as the highest level in three years.
The FTSE Renaissance Global IPO Index, which tracks the returns of newly public shares, returned 31.7 percent last year through Dec. 17, outstripping the MSCI All Country World Index's 15.4 percent.
Advisers are quick to caution that such a run — one with a number of big stock market debuts, like those of Hilton Worldwide, the animal health company Zoetis and, of course, Twitter — will be hard to duplicate. But as long as the economy holds up, so will the stock markets, prompting private companies to look to share sales to raise money.
"I would be surprised if the overall market is up 25 percent or more next year, but I'm optimistic and think it's still trending upward," John S. Daly, the head of Americas equity capital markets at Goldman Sachs, said.
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Behind the IPO boom are the usual factors, bankers say. Encouraging economic conditions drove impressive stock market growth, particularly in the United States. (Last year was the first time since 2004 that the highest share of IPO proceeds were raised in North America, at 34 percent.)
Investors proved especially eager to buy into new stocks: The flow of money into stock mutual funds outpaced money going into bond funds last year, providing a big source of capital waiting to be spent on new offerings.
"The economy is improving and that there's a lot less risk of a big downward shock," Cully Davis, a managing director of equity capital markets at Credit Suisse, said. "Investors' risk tolerance changed."
At the same time, Mr. Daly said, investors have been disciplined about what they have been willing to pay for IPO's.
The presence of ready buyers has prompted a spate of entities, including corporations looking to spin off divisions and private start-ups looking to seize on years of work and rising hype. Bankers say that the backlog of IPO's is strong, if not nearly bursting.
The boom has been fairly evenly spread, though financial and consumer companies were the majority, according to Renaissance Capital. Even sectors that had fallen out of favor, like biotechnology companies, look poised to recover.
For many investors, the most attractive type of investment remains companies that are poised for double-digit revenue growth. A new crop of technology start-ups that many analysts and bankers predict may go public in 2014 fits neatly into that mold, even if none will equal Facebook's $16 billion offering or draw as much attention as Twitter's.
Among them are Dropbox and Box, two of the big online storage companies, and the Lending Club, the biggest player in the peer-to-peer lending industry.
But the most highly anticipated offering is that of Alibaba, whose vast e-commerce operations make the company a Chinese amalgam of Amazon, eBay and a host of others. The Internet giant has not picked bankers for its forthcoming offering, according to people briefed on the matter, but that has not stopped an army of senior-level deal makers from making regular trips to Hong Kong to pay their respects to the company's founder, Jack Ma, and its executive vice chairman, Joseph Tsai.
Fevered speculation about Alibaba's potential market value has only increased, with bankers and analysts now guessing that the company could fetch a valuation of more than $150 billion.
(Read more: High-quality IPOs coming for end of the year)
Other companies expected to go public are not considered high-growth stories, but nevertheless have strong financial performance that could draw investors all the same. Ally Financial, the lender that once was General Motors' financing arm, is among those weighing a potential IPO to help repay its government bailout, according to people briefed on the matter. And General Electric plans to spin off its huge consumer finance arm.
Private equity firms have also been eager to seize on the roaring markets to sell their investments. Last year, the Blackstone Group took a number of its portfolio companies public, including Hilton and SeaWorld.
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Such firms often do not sell any shares in the IPO; Blackstone sold none of its shares in Hilton when the company went public last month. According to Philip Drury, a co-head of equity capital markets for the Americas at Citigroup, leveraged buyout shops have multiyear plans to sell off their holdings. Though investors had worried in the past that the firms would dump their investments, the firms now hold on to big stakes in their companies in hopes that the stocks will continue to rise.
Even as the enthusiasm for 2014 remains strong, advisers warn that any number of unexpected developments — a new war, uncertainty over a government debt impasse, an unforeseen market stumble — could damp the prospects for a prolonged renaissance in stock offerings.
"I think we've all understood that IPO market windows open and close pretty quickly," Mr. Drury said. "History has taught us to be somewhat cautious."