N a t i o n a l B a n k o f P o l a n d

In this paper we analyze the underpricing of Private Equity/Venture Capital backed IPOs on the Warsaw Stock Exchange between 2003 and 2011. Although the average initial return was positive (11.4%), it was significantly smaller than for other IPOs (14.5%). These results may support theories that PE/VC funds reduce information asymmetry between IPO investors and pre-IPO owners of the company or certification role of the PE/VC funds. At the same time our data do not give any evidence for the grandstanding or spinning hypotheses. Medium and longterm abnormal returns (1-month, 3-month and 1-year) on average are negative. In general, the more time elapses from the offer day, the lower the return from the PE/VC backed IPO investment. This data suggests that PE/VC funds do not perform any certification role.

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