Investment Bankers Anticipate Increased IPO Activity in 2025

By Echo Wang, Tatiana Bautzer, and Saeed Azhar

Overview

Investment bankers are preparing for a surge in global equity capital markets activity, driven by an anticipated wave of high-profile initial public offerings (IPOs) in 2025.

Key Players

• Venture Global (Liquefied Natural Gas Producer)
• Medline (Medical Supply Giant)
• Sailpoint (Cybersecurity, backed by Thoma Bravo)

These companies are expected to headline stock market floats in the first half of 2025.

Market Conditions

Improved economic confidence is expected to boost capital market activity, especially beneficial for private equity-backed companies, which have struggled to list or sell due to high interest rates and market volatility over the past two years.

Arnaud Blanchard, Morgan Stanley’s global co-head of equity capital markets, noted that many private equity-owned companies have grown considerably, encouraging sponsors to act early in the cycle.

Other Potential IPOs

Other notable potential 2025 U.S. IPOs include:
– Klarna (Swedish Payments Firm)
– CoreWeave (AI Cloud Platform)
– Chime (Financial Technology)

Recent Trends

The largest private equity firms are becoming more optimistic about IPOs. Investors will be particularly attentive to upcoming earnings reports from major U.S. banks, where capital markets outlook will be a key focus.

Despite last year’s 20% increase in global equity issuance, IPO activity remains well below 2021’s record levels, with $123 billion raised last year compared to $594 billion in 2021. Meanwhile, the Cboe Volatility Index, a measure of investor anxiety, is relatively low, hinting at a near-term upswing in the markets.

Larger Deal Expectations

Bankers expect larger IPOs (over $750 million) featuring established companies, offering liquidity and solid financial performances. Brian Friedman of Jefferies remarked that IPO sizes may reach unprecedented levels.

Investors are increasingly favoring profitable companies with strong balance sheets, particularly as interest rates could remain high longer. Despite rising valuations, many private equity-backed startups struggle to deliver sufficient returns, as noted by JPMorgan’s Daniel Pinto.

Tech Sector Outlook

Emerging tech companies could defy trends, attracting investor interest regardless of size, according to Goldman Sachs’ CFO Dennis Coleman. Goldman anticipates a substantial tech IPO pipeline, especially after positive performances from small and mid-cap tech IPOs.