U.S. ECM Recap

H1 2022: Is US ECM Nearing Bottom?

Broader market volatility continued to suppress US ECM throughout the first half of 2022 resulting in issuance tapering further into Q2. Unregistered Block activity remains elevated trailing only marketed follow-ons as the most active offering type tracked by CMG. Early signs of potential easing in commodity prices, inflation and the VIX could signal a near-term bottom. Expect an increase in follow-on issuance to precede any notable increase in IPO activity.

YTD Trends and Highlights

  • Including Unregistered Block activity tracked by CMG, YTD transaction volume reached $56.3B with $30.3B raised in Q1 and $26.0B raised in Q2 for a net decrease of 78.3% as compared with the first half of 2021

  • January was the busiest month of 2022 with $14.0B

  • 54 IPOs raised $4.8B YTD representing a 97.6% decrease over the same period last year, while follow-on issuance raised $51.5B representing a 70.1% decrease over the prior year via 228 offerings

  • Real Estate took the lead as the most active sector raising $9.7B (17.3% market share) followed by Utilities $9.3B (16.5% market share) and Healthcare $9.0B (15.9% market share)

  • On a dollar-weighted basis, the 2022 IPOs returned 25.4% from offer to first day close (vs. a mean of 88.3% skewed significantly by a few high flying micro caps)

  • Mean IPO size fell from $374.6M in H1 2021 to $89.6M in H1 2022, representing a decrease of 76.1% with just 11 IPOs raising over $100M

  • On a dollar-weighted basis, registered follow-ons returned 1.5% from offer to first day close (vs. a mean of (4.3%))

  • SPAC issuance fell precipitously yet still outpaced traditional IPO issuance with $12.0B raised across 70 offerings

H1 2021 vs. H1 2022 Dollar-weighted One-day Return

29.0% vs. 25.4%IPOs

3.1% vs. 2.3% Marketed FOs

5.1% vs. 2.9%Overnight FOs

0.0% vs. (1.0)%Registered Blocks

1.14% vs. (2.1)%Unregistered Blocks

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

TPG Inc.

Jan 12, 2022$1,100M IPO +15.3%

American Tower Corp

June 2, 2022$2,351M Marketed FO +4.2%

Bausch & Lomb Corp

May 5, 2022$711M IPO +11.1%

Discount Trends (Mean): Q1 and Q2

(25.8%), (18.8%)Marketed FOs

(16.7%), (10.3%) vs. Q1 and Q2 % to VWAP of: (17.5%), (11.4%)Overnight FOs

(7.3%), (5.6%) vs. Q1 and Q2 % to VWAP of: (7.0%), (5.4%)Registered Blocks

(4.3%), (4.3%) vs. Q1 and Q2 % to VWAP of: (4.2%), (4.6%)Unregistered Blocks

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