As the U.S. initial public offering (IPO) market endures a lackluster year, AIG spinoff Corebridge Financial looks to be its most significant prospect yet. The insurance company is seeking to raise $1.8 billion.
The amount would constitute a quarter of 2022’s proceeds, Bill Smith, Co-Founder and Chief Executive Officer of Renaissance Capital, a provider of institutional research and IPO exchange-traded funds, told MarketWatch. Only two deals exceeded $500 million: private equity firm TPG Inc. in January and healthcare company Bausch + Lomb in May.
In 2021, the numbers were record-setting. Rivian Automotive Inc., for instance, raised $12 billion in the year’s largest deal. All told, $315 billion was raised—$115 billion more than ever before—in more than 1,000 IPOs, according to Dealogic.
Rising inflation and higher interest rates caused concern amongst investors that 2022 might not be a banner year. But many did not expect such poor performance.
“The IPO market has been unusually quiet, caught in a “perfect storm” of compounding factors—investor fatigue after 2021, plummeting returns, volatility from the Ukraine war, tightening rates, recession fears,” Avery Spear, Senior Data Analyst at Renaissance, told MarketWatch.
In 2021, 606 of the 1,000 transactions were special purpose acquisition companies (SPACs), or blank-check companies.
Corebridge, AIG’s life insurance division, offers individual and group retirement, life insurance, and asset management services. It expects to go public at a valuation of $14.7 billion, Smith told MarketWatch.
Corebridge had net income of $6.4 billion in the first half of 2022 on revenue of $16 billion, according to its filing documents, and is planning to pay quarterly dividends, offering a 4.1% annualized yield at the midpoint of its range, according to Smith.
“The company is profitable and has delivered solid growth,” he said, “though it is exposed to market movements and could be impacted by weak economic conditions.”