Traders Embrace Risk, Leaving Private Equity’s IPOs in the Dust

The shares of private equity-backed companies that have done recent initial public offerings are flailing as investors seek out even riskier parts of the market, like cryptocurrencies and artificial intelligence.

Consumer shopping behavior data firm NIQ Global Intelligence Plc and education content provider McGraw Hill Inc. are among the year’s worst performing debutants to raise more than $400 million over the past year. Five of the seven such deals — KinderCare Learning Cos., Sailpoint Inc., Ingram Micro Holding Corp., NIQ and McGraw Hill — are trading below the prices IPO buyers paid. The median PE-backed IPO is trading 16% below its offer price, compared with a 19% gain for a similar subset of non-PE-backed debuts, according to data compiled by Bloomberg.