Actionable Ideas for Companies and Sponsors

Investor Appetite for European IPO Candidates at a Multi-Year High

With a large proportion of the European-listed equity universe having become severely compromised or uninvestable as a result of COVID-19, investors are embracing new IPO candidates that are considered structural winners and displaying growth and resilience. Sectors that are commanding particular demand from European IPO investors include software, e-commerce, delivery & logistics, as well as stable cash-flow stories such as consumer staples and insurers. In this context $8 billion has been raised in European IPOs from May 2020 to date, compared to $2 billion from January to April. The appetite from IPO investors to invest in structural winners is so strong that public valuations are regularly surpassing what is achievable in an M&A sale; hence many issuers who had considered M&A their likely exit are now pursuing a dual track approach.