Long-Term Performance of Private Equity-Backed and Non-Private Equity-Backed IPOs in Hong Kong and Singapore

Abstract

This thesis investigates the long-term performance of private equity-backed versus non-backed initial public offerings (IPOs) in Hong Kong and Singapore. The study analyses a dataset of 1,293 IPOs issued between 2010 and 2021, comprising 1,178 listings in Hong Kong and 115 in Singapore. Abnormal returns are measured using Buy-and-Hold Abnormal Returns (BHAR) and Cumulative Abnormal Returns (CAR). Performance is benchmarked against the MSCI World Index, MSCI Asia ex Japan Index, MSCI Singapore Index, and the Hang Seng Index, as well as through a matched-firm approach using two sets of criteria: offer size and sector grouping and offer size and IPO year. The findings indicate that IPOs in both markets generally underperform relative to market benchmarks over a three-year horizon. Contrary to trends observed in some Western markets, the analysis does not find consistent evidence that private equity backing, or higher financial leverage improves long-run returns. However, a statistically significant spillover effect between the two markets is observed, suggesting that IPO performance is influenced not only by domestic factors but also by regional market dynamics. By focusing on private equity involvement, rather than venture capital which dominates much of the existing literature, this study contributes new insights into IPO outcomes in two of Asia’s most active financial centres. It highlights that post-listing performance is shaped by a range of factors, with no clear evidence that financial structure or private equity sponsorship alone explains long-term outcomes. The observed cross-market spillover effect suggests that regional dynamics may also play a role. These findings point to the need for further research into governance mechanisms, sponsor characteristics, and the broader interplay between firm-level features and market context.