Although 2005 couldn't boast a massively hyped new issue like Google ( GOOG), the lack of marquee names wasn't a drag on the performance of this year's crop of initial public offerings.

In its yearly review, IPO specialist Renaissance Capital said the average returns for 2005 new issues were 17%, with 6% coming in the aftermarket, beating the major market indices for the fifth straight year. IPO volume dropped just slightly, with 185 deals priced as of Tuesday and 195 expected by year-end, compared with at total of 216 in 2004.

Renaissance said proceeds raised from the IPOs dropped because of the absence of super-sized deals. As of mid-December, IPOs had produced $33 billion of funds, compared with $43 billion the previous year.

"After a strong performance in 2004, it was reasonable to expect the IPO market to accelerate in 2005. And it did, until the relentless crush of bad economic and political news took its toll starting in mid-summer," said the Renaissance report. "For most of the second half of the year, the IPO market moved sideways until it picked back up again in December when investors began to conclude that rate hikes were largely over, the Iraq war was winnable and tax cut extensions were more likely."

Baidu.com ( BIDU) was the top-performing newcomer, up more than 400% in intraday trading before settling in with a 354% gain on its first day. Baidu has returned 175% year to date. The next best IPO was FreightCar America ( RAIL), which is up 158% since its debut.

The largest IPOs included chemical companies Huntsman ( HUN) and Celanese ( CE), which raised $1.4 billion and $800 million, respectively. High-profile Wall Street names Lazard ( LAZ) and KKR Financial ( KFN) were also among the biggest issues.

Among the top larger deals, satellite operator PanAmSat ( PA) (which actually went public for the second time) produced the best results, rising 36% so far for the year. Some of the most-hyped large IPOs, such as KKR and Warner Music Group ( WMG) have had lackluster returns of 0% and 7%.

"Unlike the type of market in which a rising tide lifts all boats, discerning investors focused only on a handful of deals, all with strong organic or cyclical growth stories," says Renaissance. "Any IPO that lacked a demonstrably rock-solid story had a hard time getting done without concessions on deal size and price."

The big losers for the year were Refco ( RFXZQ), the disgraced, delisted and bankrupt derivatives broker, and online jewelry store retailer Odimo ( ODMO) which is lower by 83% since going public.

Looking ahead to 2006, Renaissance said that renewed optimism on lower taxes, better poll ratings for President Bush and a reasonably strong economy create an IPO-friendly environment. And despite the occasional IPO blowout like Baidu.com, Renaissance believes there isn't an IPO bubble, calling the current environment "conservative, discerning and mostly rational."

Furthermore, after two years of energy and industrial companies going public as a result of the dramatic rise in energy and commodity prices, Renaissance's analysts are predicting a switch to a more growth-oriented IPO market with more technology, retail, health care and biotech companies being taken public.

Get Jim Cramer's picks for 2006.

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