IPO & Private Placement Conference

The eighth edition of the BNP Paribas IPO and Private Placement Conference 2024 welcomed 150 attendees from 132 companies across 25 countries.

Yannick Jung, Head of Global Banking at BNP Paribas, opened the conference stating: “After two challenging years, it appears that market conditions are improving significantly. We are seeing a robust market reopening, especially in Europe where many IPOs are expected to price before the summer. And looking ahead to 2025, the market could possibly hit record highs, considering the private equity backlog.”

As explained by Andreas Bernstorff, Head of Equity Capital Markets at BNP Paribas: “With the pricing of the IPO of Galderma last month, and now the launch of the IPO of PUIG, CVC and the re-launch of Planisware in Europe, as well as the success of Reddit in the US, the IPO market is coming back to life, and the eighth edition of our IPO and Private Placement Conference is, therefore, very timely. There is a strong momentum to invest in European public equities in all types of sectors.”

The IPO and Private Placement Conference was a unique opportunity to hear the latest insights as the IPO market reopens, to grasp the nuances between top private and public investors, and to hear feedback from those who have successfully completed their equity raise and achieved their IPO in Europe or in the US.

AI also featured prominently during the event, featuring a debate with the former UK Minister for Science, Technology and Innovation on disruptive innovation and regulation.

Brightening market outlook for 2024

Dennis José, Chief Equity Strategist at BNP Paribas Exane, explained “We’ve done almost 200 meetings since the beginning of the year and the overall buyside is a lot more optimistic. Over the next 6 to 12 months, we will see higher consumer confidence in Europe, manufacturing picking up, power price and inflation coming down, and the ECB doing rate cuts: it’s the best sort of catalysts we can hope for.”

In the United States, Equity Capital Market experts at BNP Paribas also highlighted the pick-up in cross-border IPOs, as well as re-listings and re-domiciles, and they expect this trend to continue. They discussed some of the more sizeable and high-profile IPOs that have recently come from European issuers in the US market.

Looking to the year ahead, experts believe that the right conditions are in place for new issuers, with investors willing to invest in the right names, and keeping a close watch on the market.

Top-tier investors in the IPO and Private Placement space discussed what they look for in candidates. Three topics, in particular, are at the forefront of market discussions with investors: size and liquidity, adequate capital structure, and the visibility on earnings baseline.

Taking the journey to IPO and beyond

With IPO being an extended process from kick-off to pricing, and market windows opening and closing sometimes within weeks, speakers noted that preparedness is key. Investor education is fundamental, with a clear equity story, a proven financial track record, and a detailed forward-looking plan. This is also the case for ‘non-traditional investors’, each one having a particular sector focus, objective, and strategy. Additionally, as investors are looking for large and de-risked businesses, pre-IPO financing and alternative equity structures are becoming critical on the road to IPO.  Finally, experts underscored the importance of taking an informed read on what is going to be a good long-term listing venue as a listed company: size, sector sentiment, and location of peers are important factors to consider.

Speakers discussed the importance and complexity of the IPO journey, with the head of capital markets practice at a global law firm reminding audiences that the IPO is not just the end of one journey, but also the starting point of another: “What you are doing is you are preparing to be a listed company, that’s when the action starts, that’s when the value is gained.”

Companies that have listed over the past year delivered their analysis and offered some key learnings. The Chief Strategy Officer of one recently listed company highlighted the central role of involvement from management, as well as all teams from legal and finance through to the business, in the IPO process.

The Chief Financial Officer of another recently listed group described the length of the process and the importance of pursuing the goal once the decision to IPO is made: “At one point in time, you just need to finish the process, because otherwise […] you cannot continue operationally to drive the business.” 

Participants also looked to the challenges in the post-listing phase, with the Deputy Group Chief Financial Officer of a recent IPO candidate stating: “Being able to see the evolution of the stock price daily, it’s huge. […] You have to be able to cope with such a pressure, and you have not to be distracted by the evolution of the share price.”

Research analysts’ role in the IPO process

Experts from BNP Paribas Exane, the leading research house in Europe, explored the role of analysts in offering an independent, objective, and balanced view of the company being listed. Their role is not to sell the IPO but to provide an outsider’s expert view into the company, their competitors and how they perform in the market they operate in. They analyse the company’s strengths, weaknesses, threats, and opportunities, and identify corporates that are comparable from an industry, quality, and growth perspective.

San Dhillon, Deputy Head of Research at BNP Paribas Exane, noted that thanks to the breadth and depth of BNP Paribas Exane’s coverage in 2023 (representing 31,000 hours of interactions): “We understand what global institutional investors think about the markets, what they think about valuations, and their sector preferences. We know the risks and opportunities investors will focus on.”

AI front and centre

Artificial intelligence was a recurring theme throughout the conference, with former UK Minister for Science, Technology and Innovation, George Freeman, discussing disruptive innovation and regulation.  He noted the pace of development of AI and drew a comparison with the invention of the computer, expecting AI to do for research what computing did 40 or 50 years ago, but on a much broader scale.

Looking to the stock market, one speaker from a leading European investment management partnership identified two clear trends impacting how investors are pricing AI equities i.e. computation (generating new capabilities through machine learning) and the disruptive nature of certain very specific applications of the AI technology.

However, he noted two changes in this area: “For the near term, it’s going to be a lot of AI, because we are at the stage of this current cycle where clearly the hype has been completely re-ignited. But the two things that have changed so dramatically versus the previous AI cycles are really both consumer and corporate adoption.”