{"id":39300,"date":"2025-09-02T19:43:06","date_gmt":"2025-09-02T19:43:06","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/39300\/"},"modified":"2025-09-02T19:43:06","modified_gmt":"2025-09-02T19:43:06","slug":"ecm-heats-up-with-busiest-august-in-years-and-september-set-to-sizzle","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/39300\/","title":{"rendered":"ECM heats up with busiest August in years and September set to sizzle"},"content":{"rendered":"<ul>\n<li class=\"sc-kkCwLU cwRDLW\">Follow-ons dominate deal flow, accounting for nearly half of total<\/li>\n<li class=\"sc-kkCwLU cwRDLW\">Strong investor appetite and pent-up supply drive increased activity<\/li>\n<li class=\"sc-kkCwLU cwRDLW\">Market backdrop remains favorable, but risks include potential volatility<\/li>\n<\/ul>\n<p>It was a hotter August than usual for equity capital markets, turning what is typically a sleepy summer month into one of the busiest periods on record. Bankers say a combination of pent-up supply and strong investor appetite drove an unusually active wave of initial public offerings (IPOs), convertible bonds, and follow-on offerings.<\/p>\n<p>According to\u00a0Dealogic\u00a0data, 28 transactions totaled USD 31.6bn in ECM deal value, marking the most valuable August outside of the 2020\u20132021 pandemic boom. Follow-ons accounted for nearly half of the dealflow, while convertible bonds made up a third. IPOs contributed around 16% \u2014 notable in a month when new listings are usually rare.<\/p>\n<p>\u201cIn the wake of the 2020\u201321 boom, equity capital markets have only been intermittently accessible to most issuers and secondary sellers over the last few years,\u201d said Jimmy Baker, co-CEO and head of capital markets at B. Riley Securities. \u201cSo, there is a sizable IPO backlog and follow-on pipeline that has become conditioned to being opportunistic. August presented one of those windows of opportunity.\u201d<\/p>\n<p>Traditionally quiet, August has transformed into what David Bauer, co-head of equity capital markets in the Americas at JPMorgan, calls \u201ca working month.\u201d Even with vacations underway, bankers and investors stayed plugged in. \u201cWe\u2019ve seen a steady flow of pitches and bake-offs, which looks set to continue into September and October,\u201d Bauer said.<\/p>\n<p>Mark Lehmann, CEO of Citizens JMP, agrees. \u201cThe idea that the world shuts down in August isn\u2019t true anymore,\u201d he said. \u201cKids go back to school earlier, more people are in the office, and the market backdrop was strong. Issuers saw an opening and took it.\u201d<\/p>\n<p>For some, the timing was also strategic. With an early Labor Day and a crowded fall calendar, several issuers wanted to get ahead of the September rush.<\/p>\n<p>\u201cBoth things can be true,\u201d Lehmann noted. \u201cSeptember will still be very busy, but August was an opportunity to beat the competition while demand was there.\u201d<\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-large wp-image-71785\" src=\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2025\/09\/US-ECM-Issuance-Monthly-For-August-Only-1024x527.png\" alt=\"Chart showing US ECM issuance monthly for August only. \" width=\"1024\" height=\"527\"  \/><\/p>\n<p><strong>A balancing act<\/strong><\/p>\n<p>Investor reception has been a key driver.<\/p>\n<p>\u201cDeals are working, equities are trading well, and issuers are saying, \u2018Why wait if the market is there right now?\u2019\u201d Bauer said.<\/p>\n<p>Market sentiment indicators suggest a constructive backdrop: the VIX is subdued, and CNN\u2019s Fear &amp; Greed Index has been in \u201cgreed\u201d or \u201cextreme greed\u201d territory all summer.<\/p>\n<p>\u201cLow levels of volatility in concert with a quality cohort of offerings gave confidence to even the most selective investors to deploy risk,\u201d Baker said.<\/p>\n<p>\u201cWe are also seeing AI investments and the cryptocurrency ecosystem attract outsized interest as investors position for more exposure to these megatrends,\u201d he added.<\/p>\n<p>Pricing has also been a balancing act. Bankers have leaned conservative, often selling just 10% of companies to ensure healthy aftermarket performance.<\/p>\n<p>\u201cIt\u2019s better to have investors feel good about the trade than push for the last dollar and risk a negative cycle,\u201d Bauer noted.<\/p>\n<p>Lehmann was blunter: \u201cIn hindsight, you\u2019re always wrong. If a stock trades down, people say you mispriced it. If it doubles, they say the same. But demand and scarcity are driving valuations in a way I haven\u2019t seen since the late \u201990s.\u201d<\/p>\n<p><strong>Sectors and structures<\/strong><\/p>\n<p>Growth stocks such as fintech and space exploration helped reopen the IPO window earlier this year, but activity has since broadened. Industrials, financials, consumer, healthcare, and tech are all active, with cybersecurity, insurance, defense, and AI now at the forefront.<\/p>\n<p>\u201cFive years ago, slide one of a pitch deck didn\u2019t mention AI. Today, slide one is the AI strategy,\u201d Lehmann said. \u201cThat alone has revalued companies overnight.\u201d<\/p>\n<p>In a twist, it is a recent acquisition that makes the case for IPOs, according to Lehmann.<\/p>\n<p>The veteran ECM banker pointed to Aspen Insurance Holdings, which went public on the New York Stock Exchange in May. Last week, Tokyo-based Sompo Holdings signed a definitive agreement to\u00a0acquire Aspen Insurance\u00a0in a transaction worth about USD 3.5bn.<\/p>\n<p>It showed the power of IPOs. \u201cThat was not a mysterious company that no one ever heard of,\u201d he said of the 23-year-old business. \u201cGoing public set a valuation benchmark, the stock traded well, and then a buyer came in at a premium. The public market created value.\u201d<\/p>\n<p>Cross-border issuance remains healthy, with overseas companies increasingly weighing US listings. Despite geopolitical tensions, foreign issuers continue to choose the US.<\/p>\n<p>\u201cOur capital markets are the envy of the world,\u201d Lehmann said. \u201cOver the long term, the US stock market has outperformed globally, and that continues to attract foreign issuers.\u201d<\/p>\n<p>Convertible bond issuance has also surged, driven by elevated equity valuations, investor appetite for volatility, and relatively low coupons compared with traditional debt.<\/p>\n<p><strong>The road forward<\/strong><\/p>\n<p>Looking ahead, all three bankers see a packed calendar and healthy demand.<\/p>\n<p>\u201cThe flywheel is working \u2014 issuers are getting good valuations, investors are making money, and that creates a positive feedback loop,\u201d Bauer said.<\/p>\n<p>Lehmann noted the high caliber of issuers: \u201cThere are a lot of really good companies ready to tap the market. That combination sets us up for a very active end to the year,\u201d he said.<\/p>\n<p>Whether investors agree with that assessment remains to be seen. \u201cThe market is going to be tested with another significant wave of supply in September, and the reception of those deals will be critical to this momentum being sustained into 2026,\u201d Baker said.<\/p>\n<p>Geopolitical tensions also continue to pose risks.<\/p>\n<p>Volatility has stayed below the IPO-friendly threshold of 20 on the VIX, but turbulence could return. \u201cWindows can be short-lived,\u201d Bauer cautioned. \u201cThe lesson is to stay ready. Don\u2019t go \u2018pens down\u2019 during volatility \u2014 be prepared to move when the market is open.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Follow-ons dominate deal flow, accounting for nearly half of total Strong investor appetite and pent-up supply drive increased&hellip;\n","protected":false},"author":2,"featured_media":39301,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[175],"tags":[79,30157,18,19,17,188],"class_list":{"0":"post-39300","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-data-insight","10":"tag-eire","11":"tag-ie","12":"tag-ireland","13":"tag-markets"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/39300","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=39300"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/39300\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/39301"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=39300"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=39300"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=39300"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}