IPOs surge toward four-year high despite persistent global risks: EY

Core Insights - The global IPO market is expected to grow into early 2026 due to factors such as market stability, improved investor confidence, resilient corporate earnings, and monetary easing in various countries [3][4] - There is a strong investor appetite for companies focused on artificial intelligence and new technologies in finance, defense, and healthcare, which will further strengthen the IPO market [3][4] Market Dynamics - Monetary policy accommodation and AI-driven technological disruption are key forces influencing sentiment and capital flows in the IPO market [4] - The IPO pipeline is expanding for sectors including real estate, industrial production, consumer goods, and energy, with technology, media, entertainment, and telecommunications leading in IPO volumes, particularly in the U.S. and China [4] Private Equity Influence - Private equity firms are significantly contributing to the IPO market, with a Q2 survey indicating that two-thirds of general partners plan to increase exit activity [5] - In the first nine months of 2025, the number of IPOs backed by private equity firms more than doubled, with proceeds increasing by 68%, marking the highest level of PE-backed IPO exits in the U.S. since 2021 [5] Economic Concerns - Despite the positive outlook, concerns over persistent inflation and uncertain global economic growth present challenges for the IPO market [6] - Rising long-term interest rates and elevated bond yields are increasing discount rates, making IPO valuations less attractive and necessitating clear profitability paths from issuers [6] Recent Performance - U.S. IPOs surged in Q3, generating $15.9 billion in proceeds, nearly double the Q2 total, as stock markets rebounded and investors adapted to global risks [6] - The total IPO proceeds for the first nine months of this year reached $33 billion, a 21% increase from the same period last year, with the number of offerings rising to 180, a 49% gain [6]