U.S. ECM Recap

April 10, 2023

First Quarterly Increase in US ECM Activity in Two Years

US ECM activity in Q1’23 broke a two-year downtrend, increasing modestly from Q4’22 for the first quarterly increase in capital raised since record issuance in Q1’21.

• Including SPACs, 192 offerings raised $30.2B

• Average weekly activity in Q1 increased to 14 offerings vs. 12 in FY’22

• Average Q1’23 IPO size fell 11.1% from $87.2M in FY’22 to $77.5M (vs. median deal size of $13.6M)

• Average Q1’23 registered follow-on size fell 11.2% from $196.3M to $174.4M YTD (vs. median deal size of $108.0M)

• Excluding SPACs, 33.7% of all offerings priced were $25M or less and 43.6% were $50M or less

• Excluding SPACs, 66.7% of all IPOs priced were $25M or less and 75.8% were $50M or less

• American Water Works Co Inc successfully raised $1,714.1M, the largest US offering YTD, accounting for 5.7% of all proceeds raised in Q1

Q1 Trends

• Including Unregistered Block activity tracked by CMG, Q1 transaction volume fell to $29.3B, a 3.6% decrease year over year and a 16.1% increase from the prior quarter (excluding SPACs)

• IPOs raised $2.6B, representing a 3.5% increase over the same period last year via 33 offerings, while follow-on issuance raised $26.7B representing a 4.2% decrease over the prior year via 148 offerings

• Healthcare took over as the most active sector raising $6.7B (23.2% market share) followed by Technology $4.9B (16.7% market share) and Utilities $3.7B (12.6% market share)

• On a dollar-weighted basis, IPOs returned 15.8% from offer to first day close (vs. a mean of (1.6%)) and returned 20.4% from offer to current (vs. a mean of (2.8%))

• On a dollar-weighted basis, registered follow-ons returned 2.0% from offer to first day close (vs. a mean of 1.5%) and returned (1.7%) from offer to current (vs. a mean of (5.4%))

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FY 2022 vs. Q1 2023 Dollar-weighted One-day Returns

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Largest Q1 Dollar-weighted Alpha Contributors with Mean Deal Size >$100M (1-Day)

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Largest Q1 Dollar-weighted Alpha Contributors with Mean Deal Size >$100M (To Current)

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Discount Trends (Median File to Offer): FY 2022 & Q1 2023

• Marketed FOs – (18.8%), (12.7%)
• Overnight FOs – (12.1%), (11.4%) vs. FY22 & Q1 2023 % to VWAP of: (12.1%), (11.1%)
• Registered Blocks – (5.1%), (4.0%) vs. FY22 & Q1 2023 % to VWAP of: (4.7%), (4.3%)
• Unregistered Blocks – (4.2%), (3.0%) vs. FY22 & Q1 2023 % to VWAP of: (4.1%), (2.7%)

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IPO Vs. Follow-On Composition as a % of Proceeds Raised: FY 2022 Vs. Q1 2023

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Follow-On Composition as a % of Proceeds Raised: FY 2022 Vs. Q1 2023

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