(The article featured below is a selection from SEC Filings Insight, which is available to subscribers of that publication.)

Big Names Come Back to Resurgent IPO Market

Riding a resurgence of real estate investment trusts, the market for IPOs is gaining momentum after a year-long slump. Only two companies went public between September 1, 2008 and March 31, 2009, but 20 have completed offerings in the second and third quarters of 2009. The credibility of the comeback has been bolstered by the return of big name issuers such as Dole Food, Hyatt Hotels and Dollar General.

REITs have played a large role in the IPO market this year with five completed deals and 15 new registrations through the end of August. Many of the trusts have been formed to take advantage of the availability of distressed real estate assets. To make the purchases, the REITs need capital and many of them hope to get it through public offerings.

Many of the REITs intend to purchase assets through the Treasury Department’s Public-Private Investment Program ("PPIP"). The PPIP encourages the transfer of illiquid legacy real estate-related assets off of the balance sheets of financial institutions by making government financing and guarantees available to potential buyers of the assets. Under the program, the Treasury Department will make targeted investments in public-private investment funds.

AG Financial Investment Trust, which filed a new registration July 13, disclosed that it will use some IPO proceeds to make an equity investment in the AG GECC Public-Private Investment Fund, L.P. The Fund is managed by a joint venture formed by Angelo, Gordon & Co., L.P. and an affiliate of General Electric Capital Corp., which is the PPIF manager. General Electric Capital has been pre-qualified by the U.S. Treasury as one of the initial fund managers for the PPIP.

AllianceBernstein also has been designated as a fund manager for the PPIP, and will serve as the manager and adviser of Foursquare Capital, a REIT which filed its initial registration July 8. Foursquare expects to use proceeds from its IPO to acquire an ownership interest in an AllianceBernstein public-private investment fund. The REIT also intends to invest in other mortgage-backed and asset-backed securities.

A second trend that is helping the IPO market in 2009 is the return of private equity firms as a result of the recent upturn in the stock market. IPOs have traditionally been a standard exit strategy for private equity firms, but they have had to wait as the IPO market lay dormant. With the recent rise in equity markets, many firms are moving to complete a public offering.

Fueling this trend was the successful early August debut of Avago Technologies. The Singapore-based semiconductor company was controlled by investment funds affiliated with Silver Lake Partners and Kohlberg Kravis Roberts & Co. ("KKR"). Avago sold more shares than expected (43 million versus 36 million) and priced at $15, which was the top of its predicted price range.

KKR is set to try another IPO with Dollar General. The discount retailer registered August 20 to sell up to $750 million of common shares in its IPO. If successful, Dollar General’s debut could help the market through name recognition. IPOs by well-known issuers tend to draw attention to the IPO market and heighten investors’ interest in new issues.

The same can be said of pending registrations Dole Food and Hyatt Hotels, both easily recognized brands and companies with proven track records. Dole’s shares had been publicly traded prior to 2003 when the company was taken private by its controlling shareholder, David H. Murdock. Dole registered $500 million of common shares to be sold in an offering led by Goldman Sachs. It will use a portion of the proceeds to pay down its outstanding debt.

Hyatt Hotels filed its initial registration August 5 covering $1.15 billion of Class A common shares. Goldman Sachs is also the lead underwriter for this offering. Hyatt’s filing represents the second largest non-REIT preliminary IPO filing of 2009. JBS USA Holdings filed a $2 billion new registration in July. The company is a subsidiary of Brazil’s JBS S.A., the world’s largest beef producer.