Private equity investment makes companies stronger prior to entering the public equity markets. According to a 2006 study, the share price of companies owned by private equity firms for a year or more that went public between 1981 and 2003 out-performed the stock market as a whole over a three-to-five year period. The private equity-backed IPOs were on average much larger in size, more profitable, and were backed by more reputable underwriters.

See Private equity backed IPOs beats the market