Aussie IPOs outperform benchmark

Despite a handful of infamous failed Aussie floats in 2019, the IPO market outperformed the benchmark ASX 200 Index by 16.8%.

New research from equity raising platform OnMarket revealed that IPOs returned an average 35.2%, marking the fourth time in five years that the IPO market's returns have beat the benchmark.

More than $5.4 billion was raised from last year's 63 IPOs, with a market capitalisation of $14.2 billion.

OnMarket chief executive Ben Bucknell said that a stellar 2019 for the IPO market proved that these listings are systematically underpriced.

"A model portfolio created by (a) investing the same amount into every IPO in 2019; and (b) selling every investment three months post listing; delivered investors a simple money-weighted annualised return of 157.7%," he said.

Of the year's IPOs, 19 were financial sector companies. On average, they returned 16.1% after one month and 12.3% by December 31.

Fund manager VGI Partners was the highest returning financial sector stock with a 143% return by the end of 2019.

Other financial services listings for the year included MCP Income Opportunities Trust, Pengana Private Equity Trust, Perpetual Credit Income Trust, Powerwrap, Teaminvest Private Group, Prospa Group, Regal Investment Fund, QuickFee, Sezzle, Partners Group Global Income Fund, Magellan High Conviction Trust, 360 Capital Digital Infrastructure Fund, Primewest, VGI Partners Asian Investments, KKR Credit Income Fund, Tyro Payments, MoneyMe, and Openpay Group.

Not all IPOs proved successful, with some losing much of their value after listing.

"Candy Club Holdings was the worst performer of the year, losing two thirds of its value by year end. The best performer was Uniti Wireless, which was up 530% on its issue price as at 31 December 2019," Bucknell said.

Over one third of the listings were technology companies, with internet service provider Uniti Wireless, bioresorbable implant producer Osteopore (up 265%), and buy now, pay later platform Splitit Payments (up 230%) leading the pack.

Companies with exposure to the Chinese market also performed well, with retailer Mediland Pham finishing the year up 37.5% and goat milk producer Nuchev returning 38.5%.

Notable failed IPOs of the year included much-hyped consumer lender Latitude, which failed in its second listing attempt, as well as coal seam gas firm MPC Kinetic, property platform PropertyGuru and Boost Juice parent company RetailZoo.

Read more: IPOASXOnMarketUniti WirelessVGI PartnersBen BucknellCandy Club HoldingsCapital Digital Infrastructure FundCredit Income TrustKKR Credit Income FundMagellan High Conviction TrustMCP Income Opportunities TrustMediland PhamNuchevOpenpay GroupPartners Group Global Income FundPengana Private Equity TrustPowerwrapPrimewestPropertyGuruProspa GroupQuickFeeRegal Investment FundRetailZooSezzleTeaminvest Private GroupTyro
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