Actionable Ideas for Companies and Sponsors

Financial Sponsors Are Quickly Accessing the Follow-on Market for Secondary Offerings Post-IPO

Financial sponsors continue to access the follow-on market to monetize their stakes in recent IPOs. In 2020, sponsors monetized $27 billion through secondary share follow-on offerings and registered block trades. Importantly, we are seeing timeframes compress from IPO to first follow-ons. First follow-ons from Sponsor-backed IPOs since 2019 have priced, on average, five months after the IPO. This compares to the historical average of just over six months. Additionally, subsequent secondary share offerings have priced three months after the first follow-on compared to historical average of just over five months. We expect these timeframes to continue to compress given the strong market backdrop.