Underpricing of CVC and IVC backed IPOs

: do they differ?

Abstract

This dissertation compares the impact of CVC and IVC backing on the underpricing of IPOs. A dataset was compiled consisting of 76 CVC backed and 536 IVC backed companies based in the United States which went public in the period from 2000 to 2020. The required information was taken from Thomson Reuters and Compustat Capital IQ. OLS regressions, a matching method according to Megginson and Weiss (1991), and a propensity score matching method were used. In addition to the entire period from 2000 to 2020 the periods 2000 to 2009 and 2010 to 2020 were examined. The OLS regressions and the matching method of Megginson and Weiss (1991) showed a significant difference in underpricing between CVC backed andIVC backed IPOs for the period from 2000 to 2009. The underpricing of CVC backed IPOs is significantly lower than the underpricing of IVC backed IPOs for this period. Although the propensity score matching results also showed a lower underpricing of CVC backed IPOs than IVC backed IPOs, these results were not significant. The results of this dissertation thus show that the difference in the influence of CVC and IVC backing on underpricing in an IPO haschanged over time. While there was still a significant difference from 2000 to 2009 in two of the three models, this difference is no longer present in the more recent period from 2010 to 2020.

Date of Award	20 Apr 2022
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Fátima Shuwaikh (Supervisor)