IPO returns analysis. ASX listed IPOs since 2013 (minimum offer size of A$100m)

Transcription

1 IPO returns analysis ASX listed IPOs since 2013 (minimum offer size of A$100m) 23 February 2016

2 Contents Sections 1 Executive summary 2 2 Sample space overview 9 3 Average returns analysis ( ) 13 4 Weighted average returns analysis 20 5 Industry returns 26 6 Post IPO selldown analysis for PE backed IPOs 29 Appendices A Supporting information 32 1

3 1. Executive summary

4 1. Executive summary 1.1 Executive summary 1 Introduction The Australian Private Equity and Venture Capital Association (AVCAL), in association with Rothschild, has analysed the returns of private equity (PE) backed IPOs on the ASX since 2013 in order to inform members and the market This report is the third annual report which Rothschild and AVCAL have conducted since the re-opening of the IPO market in 2013 Analysis has been undertaken of the 67 PE backed and non-pe backed IPOs which listed on the ASX during 2013, 2014 and 2015 with an offer size of at least A$100m Returns of PE backed IPOs have been compared to non-pe backed IPOs and relevant market indices Returns analysis has focussed on share price performance up to 31 December 2015 (excludes ordinary dividends) This year s study also assesses the share price performance of PE backed IPOs following vendor selldowns 2 Returns have been assessed utilising average returns and weighted average returns Average return analysis Assumes an equal dollar investment in each IPO (say $10,000), consistent with how a retail investor may consider participating in new IPOs Results have been evaluated over various time periods and per industry classification Weighted average returns analysis Individual company returns have been weighted by market capitalisation at IPO to provide a weighted measure of PE backed versus non-pe backed IPO returns since listing Results have been evaluated over various time periods and per industry classification Results for both PE and non-pe samples were also compared to an equivalent weighted exposure throughout time in the S&P/ASX Small Industrials Index 3

5 1.2 Executive summary 1. Executive summary 3 PE backed IPOs have outperformed non-pe backed IPOs since the re-opening of the Australian IPO market in 2013, although PE backed IPOs in 2015 underperformed non-pe backed IPOs PE backed IPOs since 2013 have achieved an average return of 40.9% and a weighted average return of 26.4%, outperforming non-pe backed IPOs by ~15% and ~8%, respectively Non-PE backed IPOs in 2015 have achieved an average return of 19.3% and a weighted average return of 18.9%, outperforming PE backed IPOs by ~6% and 9.5% respectively 4 PE backed IPOs have significantly outperformed an investment in the S&P/ASX Small Industrials Index PE backed IPOs since 2013 achieved a weighted average return of 26.4%, outperforming the return of an equivalent investment in the S&P/ASX Small Industrials Index of 10.4% PE backed IPOs in 2015 achieved a weighted average return of 9.4%, outperforming the return of an equivalent investment in the S&P/ASX Small Industrials Index of 5.8% 5 PE backed IPOs strongly outperformed non-pe backed IPOs after the first year of listing PE backed IPOs outperformed by ~23% on both an average and weighted average basis after the first year of listing Performance of PE backed and non-pe backed IPOs over 1 week and 1 month post listing are broadly comparable 6 Since 2013, PE backed IPOs have accounted for 8 of the top 10 performing IPOs (to 31 December 2015) 7 There has been a total of 21 PE secondary selldowns across 11 PE backed IPOs that listed since 2013 Overall, returns have been favourable, with an average share price return between each selldown date and 31 December 2015 of 16.5% 4

6 1.3 Executive summary 1. Executive summary Summary returns for 2015, 2014 and 2013 IPOs since listing and 2015 IPOs only Average IPO returns Weighted average IPO returns 1,2 Number of IPOs 26.4% Returns since listing (2013, 2014 and 2015 IPOs) 25.5% 40.9% Returns since listing (2013, 2014 and 2015 IPOs) 10.4% 18.2% 2013, 2014 and 2015 IPOs % 9.4% 2015 returns (2015 IPOs only) 13.1% 19.3% 2015 returns (2015 IPOs only) 5.8% 6.5% 18.9% 2015 IPOs only 7 11 PE backed Share prices as at 31 December 2015 (Source: IRESS) 0% 10% 20% 30% 40% Non-PE backed PE backed Non-PE backed (10)% 0% 10% 20% 30% XSI weighted to PE XSI weighted to Non-PE Note 1 Weighted average returns calculated as sum of (absolute returns x IPO market capitalisation for each IPO) / total IPO market capitalisation of PE or non-pe backed sample 2 XSI is the S&P/ASX Small Industrials Index PE backed Non-PE backed 5

7 1. Executive summary 1.4 Executive summary Summary returns over various time periods post IPO Average IPO returns Weighted average IPO returns 1 Number of IPOs 1 year performance (2013 and 2014 IPOs) 12.7% 35.8% 1 year performance (2013 and 2014 IPOs) 9.5% 32.9% 2013 and 2014 IPOs month performance (2013, 2014 and 2015 IPOs) 5.0% 6.5% 1 month performance (2013, 2014 and 2015 IPOs) 6.5% 6.5% 2013, 2014 and 2015 IPOs week performance (2013, 2014 and 2015 IPOs) 5.1% 5.6% 1 week performance (2013, 2014 and 2015 IPOs) 6.5% 4.2% 2013, 2014 and 2015 IPOs PE backed Share prices as at 31 December 2015 (Source: IRESS) (10)% 0% 10% 20% 30% 40% Non-PE backed PE backed (10)% 0% 10% 20% 30% 40% Non-PE backed Note 1 Weighted average returns calculated as sum of (absolute returns x IPO market capitalisation for each IPO) / total IPO market capitalisation of PE or non-pe backed sample PE backed Non-PE backed 6

8 1.5 Executive summary Weighted returns against the S&P/ASX Small Industrials Index 1. Executive summary Weighted average IPO returns for 2013, 2014 and 2015 IPOs since listing 1, May 13 Aug 13 Nov 13 Feb 14 May 14 Aug 14 Nov 14 Feb 15 May 15 Aug 15 Nov 15 PE Index Non PE Index XSI weighted to PE IPOs XSI weighted to Non PE IPOs Returns 26.4% 18.2% 11.2% 10.4% Note 1 Weighted average returns calculated as sum of (absolute returns x IPO market capitalisation for each IPO) / total IPO market capitalisation of PE or non-pe backed sample 2 S&P/ASX Small Industrials Index returns calculated by making an equivalent dollar investment in the Index as was invested in the respective PE backed or non-pe backed IPOs 7 Weighted average IPO returns for 2015 IPOs since listing 1, Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 PE Index Non PE Index XSI weighted to PE IPOs XSI weighted to Non PE IPOs Share prices as at 31 December 2015 (Source: IRESS) Returns 18.9% 9.4% 6.5% 5.8%

9 1. Executive summary 1.6 Executive summary Post IPO block trade returns analysis for PE backed IPOs Share price returns for investors in PE selldowns (from each selldown date to 31 Dec 2015) The average return of PE secondary selldowns between selldown date and 31 December 2015 was 16.5% 80.0% 60.0% 40.0% 20.0% 76.2% 52.3% 48.3% 40.8% 29.9% 29.5% 6.0% 3.8% 1 Average = 16.5% 0.0% (20.0%) (2.7%) (40.0%) (60.0%) (45.0%) (80.0%) (100.0%) (84.0%) Notes 1 Average return of 16.5% across the total of 21 selldowns / block trades from 11 PE backed IPOs 8

10 2. Sample space overview

11 2. Sample space overview 2.1 Introduction 1 Selection criteria for the sample space of IPOs is as follows; ASX listed (including dual listings) 1 Dual listings have been incorporated at full offer size rather than only the component of the offer that is tradable on the ASX Listing date from 1 January 2013 to 31 December 2015 IPO offer size greater than or equal to A$100m Listings that have incorporated partly paid or instalment receipts have been excluded as have Listed Investment Companies ( LICs ) 2 Returns assessment undertaken on share price performance Analysis considers share price returns only Share prices have been adjusted, where applicable, for corporate actions (e.g. rights issues, special dividends) as per adjustment factors quoted on IRESS Ordinary dividends have not been included in the returns analysis 3 A complete list of the IPOs included in the analysis is contained in Appendix A of this presentation Note 1 All dual listings were required to meet the size criteria for inclusion 10

12 2.2 Sample space overview Industry sector 1 composition by number of IPOs 2. Sample space overview Consumer Discretionary and Health Care IPOs have dominated the PE backed dataset since 2013 Real Estate, Financials and Consumer Discretionary IPOs led non-pe backed IPOs by number IT 13% Consumer Staples 7% Health Care 20% PE backed IPOs Telecom 3% Materials 3% Financials 10% Industrials 10% Consumer Discretionary 34% Telecom 3% Non-PE backed IPOs Financials 19% Industrials 8% Consumer Health Care + = 5% Discretionary 19% Consumer Staples 8% Real Estate 27% Energy MaterialsUtilities 3% 3% 5% Telecom 3% IT 6% Health Care 12% All IPOs Real Estate 15% Consumer Staples 7% Energy Materials 2% 3% Financials 15% Consumer Discretionary 25% Utilities 3% Industrials 9% Sector # of IPOs Financials 3 Industrials 3 Consumer Discretionary 10 Utilities 0 Materials 1 Energy 0 Consumer Staples 2 Health Care 6 IT 4 Telecom 1 Real Estate 0 Total 30 Sector # of IPOs Financials 7 Industrials 3 Consumer Discretionary 7 Utilities 2 Materials 1 Energy 1 Consumer Staples 3 Health Care 2 IT 0 Telecom 1 Real Estate 10 Total 37 Sector # of IPOs Financials 10 Industrials 6 Consumer Discretionary 17 Utilities 2 Materials 2 Energy 1 Consumer Staples 5 Health Care 8 IT 4 Telecom 2 Real Estate 10 Total 67 Source IRESS Notes 1 GICS Sector has been used to classify industry groups 2 Real Estate has been split out of the Financials sector using the GICS Industry Group Classification 11

13 2.3 Sample space overview Industry sector 1 composition by offer size 2 of IPOs 2. Sample space overview The non-pe backed sample is dominated by Financials, Real Estate and Utilities sector IPOs The PE backed sample is dominated by Health Care, Consumer Discretionary and IT sector IPOs The data sample equates to average IPO offer sizes of: ~A$425m for PE backed ~A$465m for non-pe backed IT 17% PE backed IPOs Health Care 30% Consumer Staples 6% Telecom 1% Financials 10% Consumer Discretionary 22% Industrials 12% Materials 2% Sector Offer size Financials 1,213 Industrials 1,517 Consumer Discretionary 2,793 Utilities 0 Materials 222 Energy 0 Consumer Staples 782 Health Care 3,892 IT 2,204 Telecom 150 Real Estate 0 Total 12,773 Consumer Staples 5% Telecom 1% Health Care 5% Non-PE backed IPOs Financials 41% Energy + 4% Utilities Materials = 4% Real Estate 15% 12% Consumer Discretionary 10% Industrials 3% Sector Offer size Financials 7,077 Industrials 445 Consumer Discretionary 1,771 Utilities 2,095 Materials 649 Energy 742 Consumer Staples 871 Health Care 837 IT 0 Telecom 207 Real Estate 2,552 Total 17,245 IT 7% Health Care 16% Consumer Staples 5.5% Energy 2% Materials 3% All IPOs Real Estate 8% Telecom 1% Financials 28% Consumer Discretionary 15% Utilities 7% Industrials 7% Sector Offer size Financials 8,290 Industrials 1,962 Consumer Discretionary 4,563 Utilities 2,095 Materials 871 Energy 742 Consumer Staples 1,653 Health Care 4,729 IT 2,204 Telecom 357 Real Estate 2,552 Total 30, Source IRESS Notes 1 GICS Sector has been used to classify industry groups 2 Offer size in A$m. NZD denominated deals converted at the prevailing FX spot rate at the time of listing 3 Real Estate has been split out of the Financials sector using the GICS Industry Group Classification

14 3. Average returns analysis ( )

15 3. Average returns analysis ( ) 3.1 Overview 1 Average returns analysis has been undertaken for both PE backed companies and non-pe backed companies Returns have been reviewed relative to IPO issue price IPO issue price is the institutional offer price and does not include any retail discounts Analysis assumes that an investor invests the same dollar value (e.g. A$10,000) into each IPO Share prices, including the IPO issue price, have been adjusted for changes in capital (for events such as rights issues and special dividends) as per the adjustment factors quoted on IRESS (note: Steadfast, Australian Industrial REIT, Cover-more, Burson and Genworth Australia affected by capital changes / issuance) Returns are calculated as the simple average of returns of the sample size tested over the defined time period As a result, this analysis does not consider factors (internal or external) which may be influencing share prices at different points in time during the period being analysed 2 Since 2013, PE backed IPOs have outperformed non-pe backed IPOs since listing, although non-pe backed IPOs in 2015 have outperformed PE backed IPOs PE backed IPOs have achieved an average return of 40.9% since the IPO market re-opened in 2013, significantly outperforming non-pe backed IPOs which achieved an average return of 25.5% Non-PE backed IPOs in 2015 achieved an average return of 19.3%, outperforming PE backed IPOs which achieved an average return of 13.1% PE backed IPOs outperformed non-pe backed IPOs over a one year period since listing by c.23% 14

16 3.2 Total returns of all IPOs since listing Returns of all IPOs since 1 January Average returns analysis ( ) Average returns for PE backed IPOs since listing have outperformed non-pe backed IPOs by over 15% PE backed IPOs 200% 150% 100% 50% 0% (50)% 180.6% 173.7% 144.6% 143.3% 139.2% 136.8% 124.0% 112.4% 111.7% 64.0% 45.7% 26.7% 26.6% 26.2% 20.9% 17.0% 14.4% 12.1% 6.3% 1.2% Simple average: 40.9% (3.3)% (10.7)% (13.2)%(13.4)%(19.6)%(32.5)%(38.9)%(39.6)%(43.9)% While the non-pe backed IPOs of IPH and Smartgroup lead returns since listing, PE backed IPOs represented 8 of the top 10 performers (100)% Non-PE backed IPOs (83.9)% 350% 300% 250% 200% 150% 100% 50% 0% (50)% (100)% (150)% 322.4% 219.4% 93.1% 84.0% 60.0% 60.0% 57.1% 51.5% 43.2% 41.1% 37.1% 34.6% 32.4% 27.8% 26.7% 25.7% 24.5% 20.7% 18.6% 11.2% 10.5% 7.0% 3.0% 2.5% 2.0% 0.0% 0.0% Simple average: 25.5% (0.4)% (7.1)%(10.4)%(14.5)%(15.2)%(15.8)% (47.8)% (69.4)% (93.7)%(96.6)% 15 Share prices as at 31 December 2015 (Source: IRESS)

17 3.3 Returns of 2015 IPOs Returns of 2015 IPOs from listing date to 31 Dec Average returns analysis ( ) PE-backed IPOs in 2015 achieved a 13.1% average return trailing a 19.3% average return for non-pe backed IPOs PE backed IPOs 1 50% 45.7% 40% 30% 20% 26.2% 20.9% 17.0% Simple average: 13.1% 10% 6.3% 0% (10)% (20)% Eclipx Group Ltd Vitaco Holdings Ltd Costa Group Holdings Ltd Link Administration Holdings Ltd Adairs Ltd MYOB Group Ltd Integral Diagnostics Ltd (10.7)% (13.4)% Non-PE backed IPOs 1 60% 50% 40% 51.5% 43.2% 37.1% 34.6% 30% 20% 27.8% 25.7% 18.6% Simple average: 19.3% 10% 0% (10)% (20)% Gateway Lifestyle Operations Ltd CBL Corp Ltd Beston Global Food Co Ltd Pepper Group Ltd amaysim Australia Ltd 0.0% IDP Education Ltd MG Unit Trust Aventus Retail Property Fund (0.4)% Wellard Ltd (10.4)% Australian Finance Group Ltd (15.2)% McGrath Holding Co Ltd 16 Share prices as at 31 December 2015 (Source: IRESS) Notes 1 Only includes companies which were listed during 2015

18 3.4 One year returns One year returns of all IPOs since Average returns analysis ( ) PE backed IPOs 1 On average, PE backed IPOs outperformed non-pe backed IPOs on a one year return basis by c.23%, returning c.36% for the period 200% 150% 100% 50% 0% (50)% (100)% 146.3% 133.2% 107.2% 97.3% 90.8% 82.4% 77.0% 69.4% 51.6% 44.4% 30.5% 24.7% 21.1% 18.0% 15.8% 0.5% Simple average: 35.8% (5.9)% (7.7)% (16.0)% (29.2)% (35.1)% (38.6)% (53.5)% Non-PE backed IPOs 1 300% 250% 200% 150% 100% 50% 0% (50)% (100)% (150)% 247.1% 72.5% 46.3% 45.8% 40.8% 35.6% 34.0% 20.5% 11.0% 10.0% 10.0% 9.5% 7.0% 5.0% 3.5% 1.1% 0.5% 0.0% Simple average: 12.7% (1.0)% (9.4)% (13.5)%(16.6)% (16.8)%(39.9)% (81.6)% (89.9)% 17 Share prices as at 31 December 2015 (Source: IRESS) Notes 1 Returns have been calculated based on the price performance over 261 business days post listing

19 3. Average returns analysis ( ) 3.5 One month returns One month returns of 2013, 2014 and 2015 IPOs PE backed IPOs 1 On average, non-pe backed IPOs have modestly outperformed PE backed IPOs on a one month return basis 60% 50% 40% 30% 20% 10% 0% (10)% (20)% (30)% 51.2% 30.9% 29.5% 27.8% 27.0% 18.8% 16.2% 15.5% 8.1% 7.8% 7.7% 7.6% 7.5% 2.9% 2.7% 0.4% 0.0% 0.0% Simple average: 5.0% (3.2)% (4.7)% (5.8)% (5.9)% (6.3)% (8.6)% (8.9)% (11.1)% (11.6)% (13.0)% (13.5)% (17.9)% Non-PE backed IPOs 1 70% 60% 50% 40% 30% 20% 10% 0% (10)% (20)% 60.5% 27.7% 25.7% 24.0% 21.5% 19.7% 19.4% 18.3% 16.7% 14.4% 12.7% 10.7% 9.4% 9.2% 6.7% 6.6% 5.0% 2.9% 2.5% 2.0% 0.2% 1.1% 1.0% Simple average: 6.5% (3.3)% (3.4)% (4.0)% (5.5)% (5.7)% (6.4)% (7.1)% (9.4)% (9.7)% (10.8)%(11.2)%(13.0)% 18 Share prices as at 31 December 2015 (Source: IRESS) Notes 1 Returns have been calculated based on the price performance over 22 business days (equivalent to 31 calendar days) post listing

20 3. Average returns analysis ( ) 3.6 One week returns One week returns of 2013, 2014 and 2015 IPOs PE backed IPOs 1 On average, returns of PE backed and non-pe backed IPOs are relatively consistent over the first week post listing 50% 40% 30% 20% 10% 0% (10)% (20)% (30)% 42.8% 37.5% 28.6% 20.0% 14.6% 14.2% 13.9% 13.8% 11.8% 8.8% 7.4% 6.7% 6.1% 5.5% 4.3% 2.9% 2.3% 2.1% 1.0% (0.3)% (0.8)% (2.4)% Simple average: 5.1% (6.2)% (8.0)% (8.1)% (8.4)% (9.8)% (10.5)% (17.4)% (19.1)% Non-PE backed IPOs 1 70% 60% 50% 40% 30% 20% 10% 0% (10)% (20)% 59.5% 30.9% 28.5% 25.0% 22.1% 16.8% 15.0% 14.2% 11.9% 9.6% 9.2% 8.3% 7.8% 7.7% 7.0% 6.4% 4.9% 4.5% 2.4% 1.0% 1.0% 0.7% 0.0% 0.0% Simple average: 5.6% (0.9)%(1.1)% (2.5)%(2.5)%(4.3)%(5.6)%(8.3)%(8.8)%(9.0)% (10.1)%(11.4)%(11.5)%(11.8)% Share prices as at 31 December 2015 (Source: IRESS) 19 Notes 1 Returns have been calculated based on the price performance over 5 business days post listing

21 4. Weighted average returns analysis

22 4. Weighted average returns analysis 4.1 Introduction 1 Weighted average returns analysis for PE backed and non-pe backed IPOs has been undertaken across various time periods, with indices constructed over two primary time periods: All IPOs since the IPO market re-opened (January 2013 to December 2015) All IPOs listed in 2015 (1 January 2015 to 31 December 2015) Weighted average returns since listing over various discrete time periods have also been assessed 2 Weighted average return analysis has been conducted to compare the aggregated returns of PE backed IPOs against non-pe backed IPOs, taking into account the relative size of each IPO A PE backed index and non-pe backed index has been constructed assuming proportionate investment in each IPO based on that company s IPO market capitalisation (e.g. investment of 1% of each IPOs market capitalisation) Weighted average returns are then calculated as the daily aggregate market capitalisation divided by aggregate IPO market capitalisation for each portfolio, providing rolling daily portfolio returns across various time periods Daily market capitalisations for each company are calculated by multiplying the IPO market capitalisation by the daily share price returns Share price returns are adjusted for stock splits, rights issues, bonus issues etc. (per IRESS adjustment factor) 3 Weighted average returns have also been compared to the S&P/ASX Small Industrials Index (XSI) XSI selected as the market index as it is more directly comparable to the size and industries of the IPO sample Separate Small Industrial Indices were calculated for both PE backed and non-pe backed IPOs by assuming an equivalent dollar investment in the S&P/ASX Small Industrials Index at the same time as the corresponding PE backed or non-pe backed IPO The value of the index was rebased to 100 for charting purposes 21

23 4. Weighted average returns analysis 4.2 Introduction (cont.) 4 PE backed IPOs since 2013 have outperformed non-pe backed IPOs PE backed IPOs since 2013 have outperformed non-pe backed IPOs on a weighted average basis by 8.2% PE backed IPOs listed in 2015 underperformed non-pe backed IPOs by 9.5% Over a 1 year period post listing, PE backed IPOs outperformed non-pe backed IPOs by over 23% 5 PE backed IPOs (listing since 2013 and, separately, in 2015) have significantly outperformed equivalent investments in the S&P/ASX Small Industrials Index PE backed IPOs listing since 2013 achieved a weighted average return of 26.4% to 31 December 2015, compared to the return of an equivalent investment in the S&P/ASX Small Industrials Index of 10.4% PE backed IPOs that listed in 2015 achieved a weighted average return of 9.4% to 31 December 2015, outperforming the return of an equivalent investment in the S&P/ASX Small Industrials Index of 5.8% 22

24 4.3 Weighted average returns All IPOs in 2013, 2014 and Weighted average returns analysis PE backed IPOs have outperformed both non-pe backed IPOs and the Small Industrials Index since 2013 on a weighted basis, returning 26.4% PE backed and non- PE backed IPOs have significantly outperformed their respective weighted S&P/ASX Small Industrials Indices Index returns since , Returns 26.4% 18.2% 11.2% 10.4% 100 Note 1 Weighted average returns calculated as sum of (absolute returns x IPO market capitalisation for each IPO) / total IPO market capitalisation of PE or non-pe backed sample 2 S&P/ASX Small Industrials Index returns calculated by making an equivalent dollar investment in the Index as was invested in the respective PE backed or non-pe backed IPOs May 13 Aug 13 Nov 13 Feb 14 May 14 Aug 14 Nov 14 Feb 15 May 15 Aug 15 Nov 15 PE Index Non PE Index XSI weighted to PE IPOs XSI weighted to Non PE IPOs Share prices as at 31 December 2015 (Source: IRESS) 23

25 4.4 Weighted average returns All IPOs in Weighted average returns analysis Non-PE backed IPOs have outperformed PE backed IPOs for those listings in 2015, returning 18.9% versus 9.4% Both PE backed and non-pe backed IPOs significantly outperformed their respective weighted S&P/ASX Small Industrials Indices in 2015 Index performance since 2015 (only IPOs listed during 2015) 1, Returns 18.9% 9.4% 6.5% 5.8% 100 Note 1 Weighted average returns calculated as sum of (absolute returns x IPO market capitalisation for each IPO) / total IPO market capitalisation of PE or non-pe backed sample 2 S&P/ASX Small Industrials Index returns calculated by making an equivalent dollar investment in the Index as was invested in the respective PE backed or non-pe backed IPOs Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 PE Index Non PE Index XSI weighted to PE IPOs XSI weighted to Non PE IPOs Share prices as at 31 December 2015 (Source: IRESS) 24

26 4.5 Weighted average returns over various time periods Weighted average returns of all IPOs across various time periods 4. Weighted average returns analysis PE-backed IPO returns have outperformed non-pe backed IPOs over longer investment horizons, with significant outperformance over the one year and since listing periods Weighted average returns of PE backed and non-pe IPOs over various time periods 40% 32.9% 30% 26.4% 20% 18.9% 18.2% 10% 9.5% 9.4% 6.5% 6.5% 6.5% 4.2% 0% 1 week performance (2013, 2014 and 2015 IPOs) 1 month performance (2013, 2014 and 2015 IPOs) 1 year performance (2013 and 2014 IPOs) 2015 returns (2015 IPOs only) Returns since listing (2013, 2014 and 2015 IPOs) PE backed Non-PE backed Share prices as at 31 December 2015 (Source: IRESS) 25

27 5. Industry returns

28 5.1 Industry returns comparison since listing Average returns for companies within the same sector 2,3 5. Industry returns Average returns since listing date 160.0% 148.4% 140.0% 120.0% 111.7% 100.0% Legend Number of PE companies in the sector 80.0% 60.0% 40.0% 20.0% 0.0% (20.0)% (40.0)% 40.6% 22.3% 68.0% 42.9% (15.2)% Financials Industrials Consumer Discretionary PE backed 1.2% 32.4% % 0.8% (0.5)% 60.0% 27.8% Materials Consumer Staples Health Care Telecom Non-PE backed Number of non-pe companies in the sector 27 Share prices as at 31 December 2015 (Source: IRESS) Notes 1 Only Sectors included were those where there was both a PE and non-pe backed IPO 2 GICS Industry Group codes have been used to classify the companies 3 Returns are simple averages

29 5.2 Industry returns comparison since listing Weighted average returns for companies within the same sector 2,3 5. Industry returns Weighted average returns since listing date 120.0% 110.8% 111.7% 100.0% 80.0% 60.0% 60.0% 40.0% 20.0% 0.0% 38.1% 38.0% 7.8% 34.2% % 32.4% 22.4% 1.0% 12.7% 27.8% Legend Number of PE companies in the sector Number of non-pe companies in the sector 28 (20.0)% (11.0)% Financials Industrials Consumer Discretionary Share prices as at 31 December 2015 (Source: IRESS) PE backed Notes 1 Only Sectors included were those where there was both a PE and non-pe backed IPO 2 GICS Industry Group codes have been used to classify the companies 3 Returns are weighted averages, weighted by IPO market capitalisation Materials Consumer Staples Health Care Telecom Non-PE backed

30 6. Post IPO selldown analysis for PE backed IPOs

31 6.1 Post IPO analysis secondary selldowns 6. Post IPO selldown analysis for PE backed IPOs 1 Share price performance following PE selldowns/block trades in PE backed IPOs has been analysed to assess returns between each selldown date and 31 December 2015 Analysis has been undertaken of PE selldowns/block trades for PE backed IPOs greater than A$100m offer size since 1 January 2013 (i.e. the same sample group as the primary IPO study) Base price for determining performance was the relevant selldown price 2 Overall, average returns following vendor selldowns in PE backed IPOs has been favourable at 16.5% There has been a total of 21 PE market selldowns across 11 PE backed IPOs (that listed since 2013) The average share price return between each selldown date and 31 December 2015 is 16.5% 30

32 APN Outdoor Burson Auto Parts Cover-more Dick Smith EclipX Group Healthscope isentia Mantra ooh!media Spotless Veda Group 6.2 Analysis of post listing share price performance Block trade performance analysis post IPO 6. Post IPO selldown analysis for PE backed IPOs PE backed IPO returns post listing performance post PE selldowns 100% 80% 60% 40% 20% 0% (20%) 84% 30% 68% 79% 36% 24% 8% 4% 1% 37% 6% 29% (1%) (4%) 78% 49% 33% 88% 61% 49% 52% 47% 20% 62% 38% 30% 28% 21% (40%) (60%) (44%) (40%) (51%) (80%) (100%) (84%) IPO to 1st selldown 1st selldown to 31 Dec 15 2nd selldown to 31 Dec 15 3rd selldown to 31 Dec 15 4th selldown to 31 Dec 15 Notes 1 Share price performance for Burson and Cover-more adjusted for changes in capital (i.e. rights issues and special dividends) by applying IRESS quoted adjustment factor 31

33 Appendix A. Supporting information

34 A.1 Company index PE backed IPO sample space Appendix A. Supporting information Ticker Primary exchange Issuer Listing date Offer price (local currency) GICS sector Offer size (A$m) VRT ASX Virtus Health 11-Jun Health Care 339 ISU ASX iselect 24-Jun Consumer Discretionary 215 OFX ASX OzForex 11-Oct Financials 439 DSH ASX Dick Smith 4-Dec Consumer Discretionary 345 VED ASX Veda Group 5-Dec Industrials 341 CVO ASX Cover-More 19-Dec Financials 520 SGF ASX SG Fleet Group Ltd 4-Mar Industrials 189 BAP ASX Burson Group Ltd 24-Apr Consumer Discretionary 220 SPO ASX Spotless Group Holdings Ltd 23-May Industrials 987 ISD ASX isentia Group Ltd 5-Jun IT 284 PGR ASX PAS Group Ltd 16-Jun Consumer Discretionary 120 MTR ASX Mantra Group Ltd 20-Jun Consumer Discretionary 239 MVF ASX Monash IVF Group Ltd 26-Jun Health Care 316 AHY ASX Asaleo Care Ltd 27-Jun Consumer Discretionary 656 3PL ASX 3P Learning Ltd 9-Jul Consumer Discretionary 283 HSO ASX Healthscope Ltd 28-Jul Health Care 2,255 MPG.NZ NZX Metro Performance Glass 30-Jul Materials 222 SDA ASX Speedcast International Ltd 12-Aug Telecom 150 APO ASX APN Outdoor Group Ltd 11-Nov Consumer Discretionary 329 OHE.NZ NZX Orion Health Group Ltd 26-Nov Health Care 124 EHE ASX Estia Health Ltd 5-Dec Health Care 725 ACX ASX Aconex Ltd 9-Dec IT 140 OML ASX ooh!media Ltd 17-Dec Consumer Discretionary 167 ECX ASX Eclipx Group Ltd 22-Apr Financials 253 MYO ASX MYOB Group Ltd 4-May IT 833 ADH ASX Adairs Ltd 17-Jun Consumer Discretionary 218 CGC ASX Costa Group Holdings Ltd 24-Jul Consumer Staples 551 VIT ASX Vitaco Holdings Ltd 16-Sep Consumer Staples 232 IDX ASX Integral Diagnostics Ltd 21-Oct Health Care 134 LNK ASX Link Administration Holdings Ltd 27-Oct IT ,773 Source Dealogic, IRESS 33

35 A.2 Company index Non-PE backed IPO sample space Appendix A. Supporting information Ticker Primary exchange Issuer Listing date Offer price (local currency) GICS sector Offer size (A$m) MRP.NZ NZX Mighty River Power 10-May Utilities 1,397 SDF ASX Steadfast 2-Aug Financials 334 ZEL.NZ NZX Z Energy 19-Aug Energy 742 ANI ASX Australian Industrial REIT 21-Oct Real Estate 129 MCS ASX McAleese 28-Nov Industrials 166 IDR ASX Industria REIT Fund 3-Dec Real Estate 199 NEC ASX Nine Entertainment 6-Dec Consumer Discretionary 637 VET ASX Vocation 9-Dec Consumer Discretionary 253 HPI ASX Hotel Property Investments 10-Dec Real Estate 279 GDI ASX GDI Property 17-Dec Real Estate 568 PGH ASX Pact Group 17-Dec Materials 649 NSR ASX National Storage REIT 19-Dec Real Estate 183 GNE.NZ NZX Genesis Energy Ltd 17-Apr Utilities 698 JHC ASX Japara Healthcare Ltd 17-Apr Health Care 351 TOF ASX 360 Capital Office Fund 24-Apr Real Estate 125 GMA ASX Genworth Mortgage Insurance 20-May Financials 583 IQE.NZ NZX Intueri Education Group Ltd 23-May Consumer Discretionary 163 SIQ ASX Smartgroup Corp Ltd 2-Jul Industrials 113 REG ASX Regis Healthcare Ltd 7-Oct Health Care 486 HUO ASX Huon Aquaculture Group Ltd 23-Oct Consumer Staples 132 GMF ASX GPT Metro Office Fund 24-Oct Real Estate 255 SIO ASX Simonds Group Ltd 17-Nov Consumer Discretionary 161 IPH ASX IPH Ltd 19-Nov Industrials 166 MPL ASX Medibank Private Ltd 25-Nov Financials 5,679 EVO.NZ NZX Evolve Education Group Ltd 5-Dec Consumer Discretionary 123 LOV ASX Lovisa Holdings Ltd 18-Dec Consumer Discretionary 102 AFG ASX Australian Finance Group Ltd 22-May Financials 122 GTY ASX Gateway Lifestyle Operations Ltd 11-Jun Real Estate 380 MGC ASX MG Unit Trust 3-Jul Consumer Staples 439 AYS ASX amaysim Australia Ltd 15-Jul Telecom 207 PEP ASX Pepper Group Ltd 31-Jul Financials 144 BFC ASX Beston Global Food Co Ltd 28-Aug Financials 100 CBL.NZ NZX CBL Corp Ltd 13-Oct Financials 115 AVN ASX Aventus Retail Property Fund 16-Oct Real Estate 303 IEL ASX IDP Education Ltd 26-Nov Consumer Discretionary 332 MEA ASX McGrath Holding Co Ltd 7-Dec Real Estate 130 WLD ASX Wellard Ltd 10-Dec Consumer Staples 299 Source Dealogic, IRESS 17,245 Notes 1 ANI was delisted from the ASX on 2 December 2015 after trading was suspended from 3 November

36 A.3 Company index Selldowns post listing in PE backed IPOs Appendix A. Supporting information Date trade crossed Issuer Industry Size ($m) Exit type Offer price Seller 14-Apr-15 APN Outdoor Advertising 55.1 Partial $3.31 Quadrant Private Equity 21-Sep-15 APN Outdoor Advertising 60.5 Full $3.63 Quadrant Private Equity 27-Mar-15 Burson Auto Parts Consumer Discretionary 26.4 Partial $3.25 Quadrant Private Equity 26-Aug-15 Burson Auto Parts Consumer Discretionary 83.0 Full $3.40 Quadrant Private Equity 17-Oct-14 Cover-more Insurance 87.6 Full $2.13 Crescent Capital 16-Sep-14 Dick Smith Consumer Full $2.22 Anchorage Capital Partners 11-Nov-15 EclipX Group Financials Partial $3.16 Ironbridge 10-Sep-15 Healthscope Health Care Partial $2.70 TPG, Carlyle 24-Nov-15 Healthscope Health Care Full $2.77 TPG, Carlyle 1-Apr-15 isentia Internet Software & Services 45.2 Partial $3.63 Quadrant Private Equity 26-Aug-15 isentia Information Technology Full $3.25 Quadrant Private Equity 15-Apr-15 Mantra Hotels, Resorts & Cruise Lines Partial $3.38 CVC, UBS 9-Sep-15 Mantra Hotels, Resorts & Cruise Lines Full $3.43 CVC, UBS 1-Oct-15 ooh!media Advertising 37.4 Partial $3.10 Champ 1-Dec-14 Spotless Prof. Services Partial $1.92 Pacific Equity Partners 24-Mar-15 Spotless Prof. Services Partial $2.21 Pacific Equity Partners 26-Aug-15 Spotless Prof. Services Full $1.80 Pacific Equity Partners 25-Feb-14 Veda Group Prof. Services 35.9 Full $2.03 Intermediate Capital Group 28-Aug-14 Veda Group Prof. Services Partial $2.15 Pacific Equity Partners 29-Oct-14 Veda Group Prof. Services Partial $2.18 Pacific Equity Partners 26-Feb-15 Veda Group Prof. Services Full $2.31 Pacific Equity Partners Source IRESS, Dealogic 35

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