May 23, 2024 - Axios Events

Axios Event: Financial leaders talk factors for IPO slowdown, cross border investing trends and more

New York Stock Exchange president Lynn Martin in conversation with Axios' Dan Primack. Photo credit:

New York Stock Exchange president Lynn Martin in conversation with Axios' Dan Primack. Photo credit: Nick Win Law on behalf of Axios.

NEW YORK – Despite IPOs having a better year than last year and 2022, there's still a slowdown in the market. But New York Stock Exchange president Lynn Martin says it's not too far off from a "normal" year.

Why it matters: Private equity markets have seen a boom, despite high interest rates and slower IPOs.

Axios hosted a cross continental event about private equity that took place in both New York City and London over the span of two days.

  • The events were sponsored by Weil, Gotshal & Manges, LLP.

Despite IPOs not seeing a boom, Martin told Axios' Dan Primack that there are a "variety of companies" making plans to go public in the second half of the year. Given her optimism, she noted one "caveat" could be the election.

  • What they're saying: "In a normal year the U.S. equity markets raise about $45 billion, $46 billion. We've raised $14.3 billion to date... We're not that far off from a quasi normal year…The caveat is the election. So that's the caveat…But we're on pace for a normal year if we didn't have the election."
  • When it comes to companies being fearful of pricing into the election, Martin says that demarcation will probably start in October.

Separately, EQT Group head of private equity North America & global co-head of healthcare Eric Liu highlighted how having offices across Europe has helped streamline dealmaking transactions, calling it "local with locals."

  • "The idea is there aren't that many deals in any particular country at any point in time. But when there is one, it's very, very easy for us to do it because we've been tracking the company for ten years. We know everyone there. So that's what our investors invest in."

Meanwhile at the Axios event in London the following evening, Apax Partners co-CEO & partner Andrew Sillitoe said London has a "leadership position" in private markets. He added, when it comes to tech investors in the public market, most go to the U.S.

  • Sillitoe said there are "multiple layers" to how AI affects their business, but one of the most important areas is in investment selection and "making sure that we're finding businesses which are at least neutral around AI."
  • Apax is still "investing in AI around our business, looking for our portfolio companies…I think the fruits of that work we'll really see over the next 2 or 3 years. The damage you could do now is by investing in a business that is going to be disrupted in the next five years," Sillitoe said.

Markets haven't seen a step change yet from AI and what it could yield, KKR co-head of European private equity Philipp Freise said in a separate interview.

  • "I think you must not overhype [AI], but take it very seriously. I think in most of our portfolio, there's always a focus on what it actually means on the cost side. And then there are some for your company that really could transform things on the revenue side, but those are few and far behind."

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In a View From the Top conversation in New York City, Weil, Gotshal & Manges private equity partner Robert Rizzo said connectivity between the U.S. and Europe is growing.

  • "When you look at private equity in particular, there's been a huge shift of capital coming this way from the European sponsors. Europe is smaller than the U.S. – it's a little tumultuous at the moment, so we're seeing a lot of sponsors look to the U.S. and to our markets into our targets when it comes to private equity and other acquires."

In a View From the Top conversation in London, Weil, Gotshal & Manges co-head of global private equity Marco Compagnoni said the biggest change in the interconnectedness of transatlantic deals is an increase in regulatory scrutiny.

  • "Regulators now are primed to look at absolutely anything under any pretext at all, much more interventionist. And they're even now looking to go after the private equity funds for the infractions of their portfolio companies in the regulatory space."
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