Global IPO Slowdown Continues as Unicorns Provide Confidence

Ongoing geopolitical uncertainties and trade issues continue to dampen investor enthusiasm, resulting in the number of IPOs in the first nine months of 2018 (YTD 2018) falling to 1,000 globally, per the quarterly ‘Global IPO Trends: Q3 2018’ report published by EY, YPO’s global strategic learning advisor.

This is an 18 percent decrease from YTD 2017, which saw the highest nine-month activity since YTD 2007. However, despite this slowdown, YTD 2018 activity remained above the 10-year average with global IPO markets raising USD145.1 billion, a nine percent increase year-on-year.

Key findings:

  • Global IPO activity dampened amid ongoing geopolitical and trade uncertainty
  • Americas build momentum while Asia-Pacific and EMEIA cool
  • Technology, industrials and health care were the most active sectors globally in Q3 2018

Activity in Q3 2018 (302 IPOs and proceeds of USD47.1 billion) was 22 percent lower in deal volume and nine percent higher by proceeds compared with Q3 2017. The technology, industrials and health care sectors were the most prolific producers of IPOs globally in YTD 2018, together accounting for 468 IPOs (47 percent of global IPO by deal numbers) and raising USD62.9 billion altogether (43 percent of global proceeds). Additionally, an increase in unicorn IPOs in Q3 2018 pushed YTD 2018 global IPO proceeds nine percent above YTD 2017.

Dr. Martin Steinbach, EY Global and EMEIA IPO Leader, says, “The third quarter has lived up to expectations as the quietest period of the year with the global IPO market feeling the full force of geopolitical tensions, trade issues between the United States, the European Union and China and the looming exit of the U.K. from the EU. However, if megadeals characterized the first half of 2018, the rising phenomenon of IPOs by unicorn companies is shaping up to drive the global IPO agenda through the second half of 2018, and we anticipate that 2018 global proceeds will surpass 2017 numbers as a result. Overall deal volumes in 2018, however, will likely be lower year-on-year than in 2017.”

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