Initial public offerings raised almost $20 billion globally inthe first quarter, as companies from Pfizer Inc. to Goldman SachsGroup Inc. took advantage of a rally in stock markets to sellbusinesses.

IPOs generated 18 percent more than in the year-ago period, ledby Pfizer's $2.6 billion sale of its animal-health unit Zoetis Inc.and Goldman Sachs's offering of shares in German apartment landlordLEG Immobilien AG, according to data compiled by Bloomberg as ofMarch 27. Initial offerings declined to about half the level of thefourth quarter, when companies raised about $37 billion.

“We're in a world where investors believe in repair and globalrecovery,” said Evan Damast, global head of equity syndicate atMorgan Stanley in New York. “While there are still a handful ofskeptics proceeding with caution, the global investor base is veryreceptive to growth stories.”

The Dow Jones Industrial Average climbed to a record this monthand the MSCI World Index rose to its highest in almost five years.Sustained gains may help ease the biggest global backlog of IPOssince at least 2007, encouraging companies including Bausch &Lomb Holdings Inc. and China's Alibaba Group Holding Ltd. to pursueofferings as soon as this year.

The U.S. led IPO fundraising in the first quarter, withcompanies raising $8.91 billion, 44 percent more than a year ago,data compiled by Bloomberg show. European companies generated $3.66billion, a 25 percent increase. Asia was the biggest market to posta decline, with IPOs slumping 59 percent to $2.88 billion.

IPOs are likely to gather pace in the second quarter ascompanies across more industries proceed with sales and moreprivate-equity firms seek to exit investments, said Mary AnnDeignan, head of Americas equity capital markets at Charlotte,North Carolina-based Bank of America Corp.

“This may be the beginning of another golden age for IPOs,” saidDeignan. “It's an incredibly broad market.”

Companies in industries ranging from energy to technology,homebuilding and real estate went public in the first quarter,emboldened by the projected economic recovery and the leastvolatile market in six years. The VIX, a measure of volatility inU.S. stocks, has lost 45 percent since the end of 2011.

Blackstone Group LP's Pinnacle Foods Inc., the maker ofHungry-Man frozen dinners and Birds Eye frozen vegetables, raised$580 million in an IPO yesterday. Other buyout firms are alsolooking to sell investments as they seek to raise new funds.Warburg Pincus LLC's Bausch & Lomb and Madison DearbornPartners LLC's CDW Corp. both filed to go public last week, whileBain Capital LLC and TPG Capital's Quintiles Transnational HoldingsInc. filed to raise $600 million in February.

Global Growth

Global economic growth will accelerate to 2.4 percent this yearfrom 2.3 percent in 2012, according to economists surveyed byBloomberg. China, where growth slipped last year, will tick up to8.1 percent from 7.8 percent, and Europe will move from contractionto expansion, according to the survey data.

“Money is continuing to flow into equities from fixed income asinvestors globally look for yield,” said Klaus Hessberger, co-headof equity capital markets for Europe, the Middle East and Africa atJPMorgan Chase & Co. in London.

U.S. investors funneled at least $65 billion into equity mutualfunds since the beginning of the year, according to data from theWashington-based Investment Company Institute compiled byBloomberg. Estimated cash flows into equity funds have eclipsedadditions to bond funds from the beginning of the year throughMarch 20, the data show. Investors had pulled money out of equitiesfor 19 of the 20 months before January.

“We have seen globally a resiliency to the equity markets,” saidPaul Donahue, co-head of Americas equity capital markets at MorganStanley in New York. “IPOs are delivering returns to the buy sidein excess of key relevant benchmarks like the S&P 500.”

IPOs worldwide posted average returns of 17 percent in thequarter, led by the U.S., with a 25 percent average return, datacompiled by Bloomberg show. By comparison, the S&P 500 hasgained 10 percent and the MSCI World has risen more than 6percent.

There are more than $165 billion of IPOs in the pipelineglobally, according to data from Ipreo, a New York-based providerof market information. The pipeline of deals in Europe, the MiddleEast and Africa has risen more than fivefold since the end of lastyear to $34.2 billion, including an offering of shares in FranceTelecom SA and Deutsche Telekom AG's Everything Everywhere Ltd., acompany with an estimated value of $15.7 billion, the datashow.

Four of the five largest IPOs this quarter came from Europe,including LEG Immobilien's $1.6 billion initial offering in Januaryand Esure Group Plc's more than $914 million sale in London thismonth, data compiled by Bloomberg show.

“An improved macro environment and low volatility levels meanbanks' risk appetite to underwrite transactions is robust,” saidEdward Sankey, global co-head of equity syndicate at Deutsche BankAG.

Asia Slump

IPOs in Asia, meanwhile, suffered the worst quarter in nearlyfour years, slumping to $2.9 billion, as Hong Kong deals dried upand mainland offers were curbed as regulators sought to changelisting rules to better protect investors.

Still, IPOs in the region are likely to pick up in the nextquarter, said Jeff Zajkowski, head of Asia Pacific equity capitalmarkets at JPMorgan.

“There's been a noticeable recovery in the risk appetite forinvestors in Asian equities,” said Zajkowski. “The Hong Kong IPOmarket is recovering and we expect increased IPO issuance in thesecond quarter.”

Chinese companies are planning initial sales in Hong Kong whichmay raise more than $4 billion in the second quarter. China GalaxySecurities Co., a brokerage backed by the country's sovereignwealth fund, plans to seek about $1.5 billion, while SinopecEngineering (Group) Co., a unit of the country's biggest refiner,may start marketing a $1.5 billion offering in April, peoplefamiliar with the matter said earlier this month.

While the IPO recovery could be derailed by macroeconomic riskssuch as a worsening of the sovereign debt crisis in Europe, thestrength of investor demand for equities has so far bolstered themarket, said David Hermer, head of Americas equity capital marketsat Credit Suisse Group AG.

“The broader market is proving remarkably resilient to news thatgenerally in recent years might have derailed it,” Hermer said.“We're seeing huge interest. The amount of money people are lookingto put to work is remarkable.”

Bloomberg News

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