IPO pipeline still vibrant despite US-China trade war, Baker McKenzie says
- Three-quarters of private company executives surveyed expect to pursue a listing in the next five years, according to the law firm
- Companies are waiting longer to list as private equity, venture capital money is readily available
The potential for an extended trade war between the United States and China has done little to dampen enthusiasm among private companies considering initial public offerings in the medium term, according to a new report from the law firm Baker McKenzie.
Companies, however, are waiting longer to go public, driven in part by the size and availability of capital from other sources, such as private equity and venture capital firms, the law firm said. That has led to older companies, with much higher valuations going to market, according to Baker McKenzie.
The evolving IPO landscape also comes as Asian markets are experiencing strong growth, driven in part by listings of Chinese companies, Baker McKenzie said. Asia-Pacific companies raised more than US$80 billion last year – about double the total capital raised by firms in the Americas and Europe last year.
“The magnitude and availability of private capital has, for instance, been an important factor in increasing the age and size of companies before they list,” Koen V. Vanhaerents, the head of global capital markets at Baker McKenzie in Brussels, said. “And there are strong signs this trend will continue, giving rise to even older and larger companies floating in the future.”
The report interviewed 353 executives from private and public companies across a variety of sectors, including technology, manufacturing and financial services, in December.
