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    INVESTMENT BANKING  |  3 POINT PERSPECTIVE

    3 factors powering ECM activity

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    Contributor: Tom Swerling
    04 Jul 2024
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    Tom Swerling, Global Head of Equity Capital Markets, explores the ECM opportunities in H2, including an improving environment for IPOs, investor interest in megatrends, and market innovations that are set to accelerate through the second half of the year.

    1. Ready, set... IPO

    The first half of 2024 has seen sustained, strong index performance on both sides of the Atlantic. That, in turn, has supported robust transactional volumes in the quick-to-market activity such as follow-on offerings and convertible bonds. As we go into the second half of 2024, investors will have more confidence on the path of interest rate cuts in Europe and in the US. In turn that will facilitate a further opening of the IPO market. We expect the private equity community to be a key driver of activity, both in the second half of 2024 and into 2025. Private equity funds have a number of scaled assets absolutely ready to debut in the public market, and they are eager to demonstrate velocity of capital on the existing portfolio base, as they then look to deploy dry powder to make new investments.

    2. Megatrends start a relay across related industries

    We are seeing strong investor interest in transactional opportunities in two converging trends: AI and the energy transition. And, over the next 12-24 months, we expect to see transactional opportunities driven by that investor interest, across a broader range of adjacent sectors. For example, the impact of AI is expanding from the immediacy of the semiconductor sector to a broader range of directly and indirectly related industries. So we are starting to see interest also in data centres, energy solution providers through to power producers.

    3. Market innovations provide a tailwind

    In today’s higher cost of capital environment, some issuers will need to access new products, new markets, new structures in order to access the capital that they require for growth. One example of this innovation is the growth in private capital markets to provide effective capital solutions to pre-IPO companies. Similarly, I expect to see an increase in the use of the equity-linked market, as companies look to both diversify and reduce their cost of funding in this higher cost of capital environment.

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    About the expert

    Tom Swerling

    Global Head of Equity Capital Markets

    Tom Swerling is Global Head of Equity Capital Markets, responsible for global origination and execution of all transactions across the equity spectrum, from IPOs, follow-on-offerings and convertible bonds, to structured equity financing and strategic equity derivatives. Tom is based in London and splits his time evenly between Europe and the US. Tom assumed his current role in April 2023, and prior to that was Global Head of Equity-Linked & Financing Solutions. Tom began his career in Equity Capital Markets at Lehman Brothers in 2001, transferred to Nomura in September 2008 prior to joining Barclays in November 2011. Tom has worked on numerous equity and structured equity transactions across Europe, Asia and the US for nearly twenty-five years. Tom holds a BA (Hons) in Classics from the University of Oxford.

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