Midwest IPO Insights - Q3 2020

US capital markets powered ahead during the third quarter, reaching record highs amid economic uncertainties. US IPOs raised a record $58.1 billion from 152 companies in the third quarter. The IPO window remained open for private companies looking to transition into the record-setting public markets. The average IPO returned 46%, while the average one-day pop was 43% across all IPOs — more than double the same quarter last year, signaling continued investor appetite for IPOs in a capital-rich environment. 

We expect the market to finish 2020 on a strong note, as interest rates remain low and the economy potentially embarks on a path to recovery in the months ahead. While the US presidential election could trigger more volatility in the markets, demand for traditional IPOs, SPACs and debt will likely continue to drive US equity markets through 2020.

The Midwest region’s Q3 2020 IPO deal size and volume history

• Q3 2020 showed strong signs of the IPO market in the Midwest gaining significant momentum relative to a slow Q2, which can be attributed to the pandemic.
• There was an immense increase in IPOs from the previous quarters, with 24 IPOs pricing at a total value of over $8.5 billion.
• The market has seen two mega IPOs in 2020, compared to one in 2019.

Midwest IPOs and proceeds by industry - 2020 YTD

• The Finance industry has been leading in cumulative IPOs and raising over $5.2 billion.
• With continued low interest rates, the capital markets are expected to remain lively for the remainder of the year.

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