The U.S. pipeline remains robust and open for business in Q3-a quarter that has typically been quieter for IPOs in general. As 2013 heads to a close, it will likely be the strongest year for IPOs since 2007, and volumes are up to pre-crisis levels.

"2013 has been a strong year for IPOs both from a volume and performance perspective. The number of effective IPOs in the U.S. has already surpassed 2012's 137," said Jackie Kelley Americas IPO Leader, EY. "Data shows that during the IPO 'boom years' of 2004-2007 the third quarter performed better than average, which means healthier IPO years have typically been determined by a robust Q3. We are projecting Q3 2013 IPO activity to be up 140% from Q3 2012 and I am encouraged by that."

As of September 19, 2013, 47 IPOs have gone effective in Q3. Based on the projected Q3 2013 totals, U.S. IPO activity is expected to achieve approximately 65 deals with proceeds of  $11.8 billion according to EY's U.S. IPO Insights Report.¹

New registrants entering the pipeline through September 19th during Q3, including confidential filings made public, accounted for 62 IPOs with $11 billion in proceeds. However, this does not necessarily represent the entire pipeline because confidential filers are not yet public under the JOBS Act. The data does confirm, however, that before the end of the month, 18 IPOs are scheduled to price looking to raise more than $2.6 billion.

The strong U.S. IPO market continued to attract some cross border attention from foreign private issuers, (FPI). Eight FPIs entered the pipeline in Q3 and seven FPIs are expected to be effective this quarter.

Third Quarter Pricing and Performance: 
There are 95 companies in the IPO pipeline expecting to raise more than $22.2 billion in proceeds and 13 are FPIs.

Despite the recent market volatility triggered by political tension, post IPO returns for Q3 have continued to increase with a YTD average of 26.4%. The third quarter post IPO returns outperformed the S&P 500 index by 9%, with average first day returns at 14.2%. However, U.S. IPOs experienced some pressure on pricing. For effective Q3 offerings 20% priced above range, and 28% priced below range. Among the IPOs that priced within range,  40% priced at the low end.  

Sector Activity-The Top Five: 
Healthcare IPOs are back. Healthcare was the most active industry sector for Q3, with 21 projected IPOs generating $2,400 million in proceeds. Rounding out the top five sectors by volume were Technology, Energy and Power, Real Estate and Industrials.

JOBS Act: 
The Report also showed no significant or directional change in IPO volume for companies with post IPO market cap size less than $1 billion² since the JOBS Act was implemented. Comparing IPOs in the top five sectors by volume during the periods of Q2 2010 through Q3 2011- before the JOBS Act-and then again from Q2 2012 to Q3 2013, the data revealed that the legislation has not significantly prompted more small cap companies to go public.

PE and VC-backed IPO Activity: 
There was a small resurgence in VC-backed IPOs this quarter, however, the time to IPO versus M&A continues to take longer-over two years- and the percentage of VC-backed companies exiting via IPO is less than 8%.

PE-backed IPOs continue to be an important and growing part of the global IPO market. To date, through 19 September, PE-backed deals have represented 33% of the total number of IPOs, and 46% of the total value. In the aggregate, sponsored firms have raised $26.7 billion across 95 separate deals, an increase of 61% over the same period a year ago. Moreover, the pipeline continues to grow there were more than 70 companies in active registration, which could raise more than $16 billion in total.

Looking ahead 
"I expect to see continued interest from investors around IPOs with returns beating the S&P 500 index by 9%," continued Kelley. "I think we'll also see PE taking the lead with more exits in Q4 and early 2014."