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European ECM 2016: what's in store? A view from the 10th November IFR Conference



On the 10th November a Black&Callow team attended the latest IFR ECM Conference to hear the thoughts of senior ECM Bankers from Barclays, Commerzbank, HSBC, ING, Jefferies, Societe Generale and UBS, on what the market holds in store:

Recap on 2015:

  • IPOs are down globally in 2015 compared to the previous year, however there is still a healthy market and Europe was more resilient than other global markets
  • FIG dominated ECM, closely followed by Real Estate, TMT, Transport and Consumer/Retail
  • The UK had most issuance, followed by Spain (up from fourth place last year), Germany and France
  • H1 saw the majority of issuance with the launch of 7/10 IPOs and 10/10 Rights Issues and Equity-Linked transactions

Where are we now?

  • Fund Managers are generally looking for the larger issues
  • There’s still a need for strong stories which investors can buy into
  • 30% of UK ECM activity this year was launched to facilitate M&A transactions; this trend could continue
  • Equity and Equity-Linked transactions will be strong if the Hybrid market tails off
  • Will there be a resurgence of Dual-Tracks?
  • Opportunities will continue to come from the FIG sector, via Insurers as a result of Solvency II and generally due to EU Stress Tests
  • In the European Mid-Market, it’s more critical than ever to grow ‘an investor fan-base’

What’s the outlook for next year?

  • Despite some volatility, the market is open, functioning, normalised and healthy: but there will continue to be some price-sensitivity
  • Good stories will continue to sell better than others, and the public market offers better investment appetite than LBOs and PE alternatives
  • We should expect a strong start to the year, particularly in Mid-Markets where some issues have been postponed from Q4 this year
  • Europe should again lead the way compared with US and, potentially, CEE issues
  • The pool of investors is changing and the right distribution network will be critical: a bespoke, focused approach and better pilot-fishing will optimise investment and a quicker, more cost-effective reach
  • IPO advisers & GloCo syndicates alike can ensure greater complementarity of investors
  • Greater recognition and understanding of each business in the local markets means greater likelihood of finding the right investors
  • Governments, PE and Corporates will help supply a healthy pipeline of businesses for investment in 2016

If you’d like any more information, please don’t hesitate to call the Black&Callow sales team.

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