The majority of mega cap private companies will go public, says Morgan Stanley's Colin Stewart

IPO Market Overview - The Renaissance IPO ETF reached its highest level since February 2022, indicating renewed investor interest in IPOs [1] - There has been a scarcity of growth companies in the public markets since 2021, with only a few IPOs in the past years [3][4] - In 2024, the number of IPOs has reached 11, suggesting an improving pipeline [3][4] Factors Driving IPO Activity - Companies with scale, growth, profitability, and secular growth prospects are attracting investors [4] - The success of venture-backed businesses that have navigated the challenges of the COVID-19 pandemic is driving IPO activity [8] - The market has been starved of supply, not demand, with companies delaying IPOs due to private market financing and ensuring growth prospects [6][7] Future Outlook - The success of recent IPOs is expected to improve the pipeline into 2026 [5] - Mega-cap private companies, particularly in the AI space, have the luxury of choosing when to go public due to ample private capital [9] - Strategic activities like acquisitions and investments are better suited for private companies, but access to larger and more liquid securities markets will eventually drive them to go public [10][11] - The majority of the 8 to 10 mega-cap private companies are expected to go public in the next couple of years [11]