Green business IPOs are set to flourish from later this year as the fundamental drivers behind investor interest in the sector remain strong, according to experts speaking at the London Stock Exchange last week.
Andrew Godber, executive director of corporate finance at stock brokers Panmure Gordon, tipped cleantech firms to buck the trend of a stagnant IPO market as investors look for solutions to tackle soaring energy prices and global warming.
"In 2008, there are stronger prospects for green businesses as fundamental drivers remain strong," he said.
Godber warned that the IPO market will probably be closed until autumn, but predicted that there should be some activity in the cleantech sector from later this year, adding that while generalist fund managers will remain worried about the volatile economy, "money will continue to flow into the environmental sector ".
However, he also warned that while the sector should continue to outperform the rest of the market, green startups may find it slightly harder to attract backing as concerns about the economy lead to a shrinking of the pool of potential investors. "We anticipate a smaller number of investors making bigger investments," he explained.
Andrew Wallace, UK main market product manager at the London Stock Exchange, agreed that the outlook for UK cleantech IPOs remained largely upbeat. "If this is the time, this is the place; specifically the London Stock Exchange," he said, adding that cleantech firms which go public can expect to receive a higher profile and capital for growth and acquisitions among the benefits.
However, Nigel Taunt, director of investments at Impax Asset Management, offered a cautionary note, warning that while clean tech firms continue to attract high levels of investor interest, mixed messages surrounding biofuels combined with challenging market conditions could affect IPO opportunities in the short term.
"Do not expect a dramatic reopening of wallets and confidence over the next few months," he counselled.
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