With IPO volume low, many investors will be tempted to ignore the IPO market altogether as we move into 2009. This may be a mistake. Historical precedent suggests that IPOs in periods of low issuance can generate very strong returns as compnaies are forced to become more realistic with their proposed valuations.

The Renaissance Infrastructure IPO Index was down 14.9% in October, outperforming the benchmark Renaissance IPO Index® and other major indices.

The Renaissance Green IPO Index was down 30.5% in October and significantly underperformed the Renaissance IPO Index® and other major indices, primarily because of the poor performance of index heavy‐weight First Solar (FSLR), which traded down 23.9%.

The Renaissance IPO Index was down 19.7% in October and generated its greatest monthly loss this year. The broader market struggled to survive the economic turmoil and even with the approval of the $700 billion bailout, investor confidence in the market reached new lows. With record breaking equity sell-offs, IPOs took an even harder hit as their unseasoned nature scared off already fearful investors. Despite its relative underperformance to other equity indices, the Renaissance IPO Index® continued to generate unique returns and superior risk-adjusted returns.

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.

Global IPO activity plummeted during the third quarter of 2008, further extending the trend from the first half of the year. Faced with unprecedented uncertainty stemming from the spiraling of the credit crisis and slowing global economic growth, investors turned increasingly skeptical of unseasoned stories typical of IPOs. Using a $100 million proceeds floor and excluding special purpose acquisition companies (SPACs) and closed-end funds, the number of global IPOs in the third quarter fell -82% year-over-year to 20, while the amount of proceeds raised declined -89% to $9.3 billion.

The Renaissance IPO Index® was down 18.7% in September, bringing its quarterly loss to -24.2% and underperforming the other major indices. The index saw negative returns in July (-7.0%) as investors, concerned about the economy, pulled their money out of unseasoned equities and was up slightly in August (+0.2%) as commodity prices eased and the dollar began to strengthen, but in September the banking nightmare took its toll on equities across the board.

The Renaissance Green IPO Index rose +1.4% in August, performing in-line with the other major indices.

Filing activity perks up as "Big" and "Green" deals prep for IPOs.

Renaissance Capital LLC today announced the introduction of the Renaissance Green IPO Index, a derivative of its comprehensive benchmark Renaissance IPO Index®, to address the increasing demand for environmentally-friendly investments by institutional investors and pension funds.

While global IPO issuance slowed in the first half of 2008, there were distinct changes in market share and the types of issuers that could herald profound shifts in global IPO dynamics. Since Sarbanes-Oxley was implemented, prognosticators have opined that the United States would lose IPO share, but this has proved to be false thus far in 2008, thanks to Visa. Instead, it was the United Kingdom that lost share to exchanges in the Middle East and Asia, where economic expansion supported an increase in energy and infrastructure IPOs. The IPO market also saw a substantial decrease in the number of small IPOs, as investors were less inclined to take on the risk associated with less mature companies.