Ever since August, the IPO market has been shut down. Year-to-date there have been a meager 43 US-listed IPOs and 96 non-US IPOs greater than $100 million in size, down 77% and 69%, respectively, from 2007. Equity capital markets desks from New York to Hong Kong are sitting on their hands. And yet, the global IPO pipeline is full – 190 companies have current IPO filings with the SEC, about the same as last year, and while it is difficult to be precise about the number of prospective non-US issuers because of differing offering procedures, we believe that this number is substantial as well. Capital market desks report that their deal backlogs are big and that they are waiting for the ice to break.

Risk capital will eventually open up to new issuers, but what will it take to get there and when might this happen? After studying the last significant downturn, the recession of 1973-1974, we believe that the past holds some answers. more