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Market Pros Bullish on '10 IPO Growth: Survey

Capital markets executives at leading investment banks predict increased growth for IPOs in 2010, according to a recent survey.

“Two-thirds think that the market is going to be very good for IPOs with an increase in both number and volume and dollars invested in the 2010 year,” said Lee Graul, a partner at BDO Capital Market Practice, an accounting and consulting organization.

Overall, the bankers expect the number of public offerings to increase 25 percent and to average just over $400 million. And of the 68 percent that believe IPO activity will increase, about half expect a peak in the third quarter while a third expect one in the second quarter.

Private equity was named a major source of capital for IPOs in 2010. Spinoffs and venture capital portfolios were also cited.

“I think that the private equity investors have been the ones that have been funding those companies for a while now, and from that standpoint, [they] are looking for an opportunity to get others involved,” said Graul.

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Slideshow: The Largest IPOs in U.S. History

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The top IPO sectors to watch in 2010 include technology (83 percent), energy and natural resources (78 percent), biotech (72 percent) and health care (62 percent), according to the survey.

Another two-thirds of surveyed bankers predict that the NASDAQ will land most of the offerings compared to just under a quarter for the NYSE.

Meanwhile, social networking sites like Facebook and LinkedIn are already attracting a lot of attention, said Graul.

“Those names are generating a lot of buzz at this point in time, and from that standpoint, you would expect them to be first out the door,” he said.

The BDO IPO Outlook Survey is a national telephone survey of 100 respondents and was conducted by an independent research consulting firm.