The quality of businesses looking to float on the sharemarket has steadily deteriorated in 2014, cooling the appetites of institutional investors scouring for growth opportunities, according to Wilson Asset Management.
Geoff Wilson, chairman of listed investment company WAM Capital, will tell shareholders on Friday that opportunities to invest in newly listed companies would shrink as the year draws to a close.
"During 2014, we have seen an increasing number of [IPO] candidates looking to float on the Australian sharemarket.
"We continue to look for opportunities in this space but we remain mindful that the IPO window may close sooner than market participants expect," Mr Wilson will say at the company's annual general meeting.
Mr Wilson's comments come after a busy year for IPOs on the Australian Securities Exchange. Health insurer Medibank Private made its public debut on Tuesday in a $5.7 billion float – the biggest Australian government asset IPO since the $14 billion partial listing of Telstra in 1997.
Pathology services provider Healthscope, which has a market value of $4.5 billion, listed in July, and Australian apparel business PAS Group made its debut in June, among other IPOs.
Mr Wilson is also cautious about the outlook for Australia's equity market, pointing to slow economic growth and the risk of slowing excess global liquidity that could dampen the returns of the sector next year.
