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In Mizuho | Greenhill’s Beyond The Obvious podcast channel, we uncover the value that others miss.
Our podcast is a source for the latest discussions on topics related to capital markets, dealmaking activity, business leadership and more.
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Welcome to another episode of Mizuho
Markets Mindset.
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My name's Josh Weismer and I'm here
with my colleague,
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Rich Soto, to talk about the state of the IPO market.
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So Rich, we're through the first month of the year and it's been an incredibly busy start
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so far from an IPO perspective.
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We've got seven deals that are priced so far to raise just over two and a half billion.
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Average offer to current right now and performance of those deals has been a little mixed
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with most of them average around flat right now
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and a number of IPOs that are expected to price over the next couple of weeks.
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But I'm curious to get your take on what
you're seeing in the TMT market
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and what does the pipeline look like and what
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subsectors within TMT do you see being
important throughout 2026?
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So Josh, we've seen a very positive macro backdrop across the board,
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which has led to a really positive TMT pipeline.
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We've seen that across geographies, whether that's European, Asian, Latin American companies
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coming to market and the pipeline is looking
robust across subsectors.
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We're seeing fintech, software, internet, obviously a lot of these very high-profile AI names as well,
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that are preparing and looking to launch either
in 2026 or the early part of 2027.
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I think one of the things that we're also
seeing is the SEC backlog
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became very constrained with
the government shutdown.
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We're easing off of that now.
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So the companies that are looking
to kick off processes today
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are probably going to be more or less in time
for a summer of 2026 IPO.
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What are you seeing, Josh?
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Yeah, really one of the things that I noticed this year is the increase in activity from the sponsors.
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If you look at 2025, there were 20 private equity-backed deals versus 14 in 2024.
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And we've seen a lot more activity at the
start of the new year here.
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The Medline deal toward the end of last year obviously went very well.
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It's trading up 50% from its IPO price.
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And we're seeing all of the sponsors look at the IPO market as a viable exit path
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for their portfolio companies after again,
similar to the TMT space,
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having a three or four-year lull in activity from the financial sponsor community.
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And I think that if you look at 20 deals in 2025,
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it's quite likely, given what we've seen in the
market right now that we have
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double that from a public IPO standpoint.
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I think if you look and canvas
the top 20 financial sponsors,
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each of those names has somewhere between
two and four portfolio companies
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that they're contemplating taking out,
whether it's in 2026 or 2027.
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So it feels like that's shaping up to be a very
robust year from a sponsor standpoint.
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And from a sector standpoint, industrials
continues to be incredibly busy.
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There's a number of defense technology companies that are either on the road,
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have priced recently or queuing up to go
public later this year.
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And that seems like that's going to be a very prolific area of the capital markets for a while.
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But also on the consumer side, I was down
at ICR a couple of weeks ago
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and the sentiment down there was as positive
as it's been in several years.
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And we're already seeing some
sponsor-backed consumer names
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and some non-sponsor backed consumer names starting to line up and think about an IPO in 2026.
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I'm curious to get your take, and you talked
about AI and obviously,
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not only in AI, but in some other sectors as well, there are some incredibly large transactions out there
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that are rumored to be coming,
whether it's in 2026 or 2027.
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And by large, I mean some potentially bigger than the largest IPO of all time to date.
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I'm curious to get your take on market saturation and volume, and is there enough
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demand out there on the part of the buy-side to have some of these deals get done,
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but also leave enough on the table for the smaller transactions to occur over the next 12 months?
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We're seeing very clear preparations from some of these best-in-class mega-cap private companies
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that are looking to access the U.S. public
markets for the first time.
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Each situation is very particular, but I think the tactics around these IPOs
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will be different than just doing your typical
$500 million or a billion dollar IPO.
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I think we will see very robust friends
and family rounds.
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We will see very robust cornerstone investments as part of any of these IPO processes.
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If you're looking to raise $25, $50, $100 billion,
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from just a market saturation perspective,
you'll see certain
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certain processes that are just different
to what we typically see.
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We expect, because the cap structures of these companies are already full
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from the long-only investor sovereign wealth funds,
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we expect these to continue to support these
deals in the public markets.
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So we would anticipate if you're raising say a $50 billion IPO, to have $10, $20, $30 billion
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spoken for ahead of launching this IPO.
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That will make a pretty big difference from
an execution perspective
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versus what we see in a typical IPO.
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I think investors are incredibly excited
about these prospects.
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I think there's a premium for growth and these companies are all, as you know,
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very high growth and there's not
a lot of exposure currently
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that investors have to these
best in class AI stories.
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And then some of them are just, they're just different than everything out there
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that's in the public markets.
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People have been constrained in
how they can invest
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on the public side in some of these
best-in-class large companies
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because they've just stayed private for so long.
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I think for the first time in 2026 and early 2027,
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they're going to get access to it and we expect very robust demand for that.
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You know, a lot has been made about
the Fed and the impact
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that some of the rate cuts last year had
on the stock market.
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And we see right now where the Fed
is heading in 2026.
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What do you think the biggest impact that
has had on the IPO market
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equity capital markets in general?
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You know, Josh, I think what we've seen now, now that President Trump has made his Fed pick,
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I think people will be very focused on the underlying data on inflation
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and how sort of the expectations for just general investor confidence, the general data
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around GDP growth and inflation sort
of translate into the expectations
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for this new Fed chairman sort of
throughout the whole year.
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The impact from a macro perspective,
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we've been in a bit of a super cycle in which we've had steady equity gains now for a couple of years,
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and that hasn't yet translated into the IPO market
in great part because small- and mid-cap
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have vastly underperformed the sort of
large-cap and mega-cap names.
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If we continue to see
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a Fed that is cutting rates, we'll see outperformance from small and mid-cap names,
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which should translate into a more
robust IPO market.
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So Josh, on your end, how do you see
the breadth of the market
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and not only that, but who is going to
be selling into IPOs
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from a sector and from a
stakeholder perspective?
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I think one of the things that we're seeing in 2026
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early and moving into deals that we see in the pipeline, what we've been pitching
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is we've now got a market that's focused, we talked about SMID caps a little bit.
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I think you're going to see deal sizes across the spectrum this year.
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I think that's one of the things that we
see in a more robust IPO market,
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which I think we're in right now, that deals
from down to $150 million
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to tens of billions of dollars can get
done in this market.
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And I think the other thing that we're seeing right now is a broadening out of sector exposure.
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We talked about TMT, we talked about industrials.
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There's a lot going on in biotech right now.
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The biotech overall capital raising landscape has been incredible for the last six months or so.
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And we've already seen biotech IPOs
kick off the year.
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We've got several on the road right now and a lot lining up in the pipeline.
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So having this broad exposure to the
IPO market from a sector standpoint,
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I think is really healthy and really speaks to the health of the IPO market
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and the demand that we're seeing on the institutional investor side to put capital to work
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in the IPO product to try to drive alpha
across their portfolio.
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And we saw $46 billion of IPO issuance in 2025.
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And putting those large multi tens
of billions of dollars
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deals on the shelf for a second,
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I think it's quite likely that we can see double that
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in 2026, just given what we're seeing
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in the market right now, given the
velocity out of the gate
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that we've seen so far and given the pitch activity,
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financial sponsors, VC firms that are looking
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to get liquidity in their portfolio
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after not having it for several years,
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I think is really building up
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to what should be a very successful
IPO market in 2026.
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Rich, thanks a lot for joining me.
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And appreciate everybody taking the time to hear our views on the capital markets in 2026.
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It feels like it's going to be an incredibly
robust year for IPOs.
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And to the extent that you're thinking about accessing the public markets,
00:09:19:10 - 00:09:23:06
please reach out to your Mizuho banker so we can give you our advice and thoughts on the process.