There's more data coming through about these major liquidity events that mint new millionaires, reinforce the wealth of existing ones, and enable business owners to realize their exit strategies and pass on wealth to heirs and partners.

The volume and proceeds of initial public offerings have fallen this year from a year ago, which translates into fewer wealth-boosting liquidity events, as trade tensions and geopolitics weighed on markets.

EY, aka Ernst & Young, reports that there were 1,115 registered IPOs around the world in 2019, netting proceeds of $198 billion, falling by 19 per cent in deal volume and dropping by 4 per cent in capital raised. The figures are backed up by exclusive figures published a few days before by this publication, based on research from Wealthmonitor, a data provider.

While Asia-Pacific sustained overall declines in deal volume (-1 per cent) and proceeds (-8 per cent) for 2019, it led the regions, with EMEIA (Europe, Middle East, India and Africa) second by both deal volume and proceeds and the Americas third in both measures. The technology sector continued to dominate in 2019 with 263 IPOs raising $62.8 billion. By deal numbers, healthcare (174 deals) and industrials (147 deals) were also active in 2019, while by proceeds, energy ($32 billion) and healthcare ($22.5 billion) performed well.

Activity in Q4 2019 (353 IPOs and proceeds of $84.5 billion) was 5 per cent lower in deal volume and 53 per cent higher by proceeds compared with Q4 2018. Two of the largest IPOs in 2019 came to the market in Q4, improving IPO activity for the quarter. 

EY said that if or when US-China-EU trade tensions, concerns about economic growth and other geopolitical issues – including Brexit and social unrest in Hong Kong – subside, a “healthy increase in IPO activity is expected in 2020, particularly in the first half of the year, as markets are expected to become more volatile leading up to the US Presidential elections”.

Americas
With 213 IPOs raising $53.9 billion, deal volumes and the proceeds of Americas IPO markets in 2019 fell compared with 2018 numbers by 20 per cent and 10 per cent, respectively. The US remained in the spotlight as the leading source of IPOs in 2019, accounting for 77 per cent of Americas IPOs and 93 per cent by proceeds, including 24 unicorn IPOs.

Canada's Toronto Stock Exchange and Venture Exchange saw 18 IPOs, which raised $295 million, accounting for 8 per cent of Americas' IPO deals, while Brazil's B3 exchange posted 5 IPOs over the year, with proceeds of $2.3 billion, and Chile posted two IPOs, with total proceeds of $1.1 billion.

"As is typical, the bulk of Americas' IPO activity occurred in the US for 2019. However, there was activity across a range of markets including Brazil, Chile and Canada. Coming into year end, we see momentum in all of these markets. We expect a strong environment across the Americas for business leaders who have the ambition to go public in 2020,” Jackie Kelley, EY Americas IPO leader, said.

Asia-Pacific
Asia-Pacific continued to “dominate” global IPO activity, EY said, accounting for seven of the top ten exchanges globally by deal number and five of the top ten exchanges by proceeds in 2019. However, 2019 deal volumes (668 deals) slipped by 1 per cent versus 2018 and proceeds ($89.9 billion) fell by 8 per cent.

Japanese exchanges posted 89 IPOs in 2019, dropping by 9 per cent in terms of volume compared with 2018, with proceeds of $3.6 billion slumping by 87 per cent compared with 2018 proceeds. 

Due to the early success of Shanghai's STAR market, Mainland China saw an increase in IPO activity in Q4 2019, which pushed 2019 deal volumes past 2018 levels by 89 per cent (197 deals) and proceeds by 69 per cent ($35.7 billion). 

The Hong Kong Stock Exchange saw a 25 per cent decline by deal number (154 IPOs), but a 4 per cent increase by proceeds ($37.9 billion).

"Despite the geopolitical and trade uncertainty that prevailed throughout much of the year, Asia-Pacific markets performed reasonably well in 2019. However, as we move into 2020, we expect ongoing geopolitical headwinds and rising investor skepticism to slow IPO activity, particularly in the second half of the year,” Ringo Choi, EY Asia-Pacific IPO leader, said.