Global equity capital markets issuance has seen a positive change in 2023, with a 30% increase in US listed businesses.
The IPO market is reopening, with a focus on highly durable companies with strong margins and management teams.
Deep dives
Increase in ECM Issuance
In 2023, global equity capital markets (ECM) issuance has shown a positive change compared to the quiet year of 2022. Issuance is up 6% globally, with US listed businesses seeing a 30% increase. The drivers of ECM issuance include opportunistic raises by companies seeking to fund their businesses, secondary monetizations of existing positions, and active issuance from corporate cross holdings.
Reopening of IPO Market
The IPO market is reopening, with a shift towards regular way IPOs rather than corporate action-based offerings. Investors are looking for highly durable companies with strong margins, strong free cash flow conversion, modest leverage, and excellent management teams. The IPOs that have come to market are high-quality companies that have the ability to IPO in any market, indicating increased demand. Overall, the IPO market is open, and companies have the opportunity to proceed with IPOs if the bid-ask valuation meets investor expectations.
Discussing how companies are issuing new stock this year, the market for IPOs, and the other ways corporations are accessing capital in a high-rate environment, Lizzie Reed, global head of the Equity Syndicate Desk in Goldman Sachs Investment Banking, joins our latest episode of The Markets, a new weekly podcast from Goldman Sachs Exchanges.