From MoneyBeat:
Goldman, JPMorgan Reap Fee Bonanza from Private Equity-Backed IPOs
LONDON–Goldman Sachs Group Inc., JPMorgan Chase & Co. and other investment banks have booked record fees in 2014 for arranging the flotation of companies owned by private equity firms on stock markets around the world, according to Dealogic.I've mentioned that the idea in the headline is not original to me.
Private equity firms have paid $1.3 billion to banks to arrange initial public offerings for their companies so far this year, more than double the $498 million paid in the same period in 2013. Banks earned a total of $3.6 billion in fees by advising private equity firms on the sale of companies, including follow-on share sales, convertible bond sales and sales of companies outright to other companies.
The share price performance of the IPOs was less impressive — in the short term at least. Shares of the private equity-backed IPOs are up 8.1% to Aug. 7, while the shares of IPOs that weren’t backed by private equity firms are up 25.9% in the same period. However, private equity-backed IPOs performed better in the longer term than all other IPOs. They outperformed in every year from 2010 to 2013, according to Dealogic. Private equity-backed IPOs from 2010, for example, are up 48.4%, while all other IPOs are down 19.2%, according to the data....MORE
I believe it devolved from Blinder, Robinson to First Jersey to Stratton-Oakmont before the crooks got hold of it.
