Wall Street Reportedly Prepping Private Equity-Fueled IPO Revival

Will 2025 bring about a revival in the initial public offering (IPO) market?

As the Financial Times (FT) reported Sunday (Jan. 5), it’s a rebound Wall Street banks are preparing for, as private equity companies turn to the equities markets to offload some of their high-profile holdings.

The report noted that a number of private equity-backed firms have already filed IPO paperwork, among them the medical devices company Medline and software maker Genesys.

According to the FT, bankers and analysts expect the first half of this year to bring a flurry of IPO announcements, fueled by a strong stock market and the hopes that the incoming Trump administration will reduce taxes and roll back regulations. Recent deals have also performed well, with shares in 9 of the 10 largest IPOs of 2024 ending the year above their listing price.

“Successive improvement and more activity, that’s the headline,” Eddie Molloy, global co-head of equity capital markets at Morgan Stanley, told the FT. “With an [economic] backdrop that is a bit more certain, more of a pro-business bent to regulatory policy and the Fed [reducing interest rates], we should be busier for sure.”

“Large [private-equity backed] IPOs will be the most important theme,” Molloy said.

The weeks since the presidential election have seen a number of predictions of a more pro-business climate in 2025. For example, a senior Goldman Sachs banker projected earlier this year that the number of IPOs in the tech sector will “likely more than double.” 

“There’s a massive population of big, scaled companies in tech that are IPO candidates, and there’s a lot of demand to put money to work,” said Will Connolly, the banking giant’s head of technology equity capital markets, at Goldman’s Private Innovative Company Conference in Las Vegas. “The question is how quickly can people recalibrate to a more active IPO market.” 

Meanwhile, PYMNTS wrote last week about the FinTech IPO market, noting that companies like Chime and Klarna were preparing to go public.

“Klarna’s recent reported valuations reveal the volatility inherent in the FinTech realm: The recent $14 billion plus valuation of the buy now, pay later (BNPL) provider is well above the nadir of $6.7 billion seen in 2022 but is significantly below the $45.6 billion of 2021,” that report said.