Here lies the IPO market of 2016, the quietest year for listings since the financial crisis. Despite the S&P’s 11 percent gain, despite the average 18 percent return for successful IPOs, despite volatility that eased from 2015, the last 12 months have seemed as silent as a graveyard for deals. Going by the number of listings and the amount raised, it hasn’t been this dead for offerings since 2009.
Volatility deserves much of the blame. Even though the VIX has averaged 15.93 this year versus 16.68 in 2015, most of last year’s equity turbulence occurred in the final few months. It takes time for IPOs to return after volatility calms, and the VIX never provided a large enough windows for the IPO market to bounce back. Volatility spiked in each quarter of 2016, sapping the confidence of IPO investors.