US Capital Formation’s 2020 Journey
Published on:
November 24, 2020
How Different Vehicles Took Center Stage at Different Points of the Cycle
As COVID-19 rolled through 2020, different capital formation vehicles took center stage at different points in the cycle. Looking at initial public offerings (IPO), secondaries, and special purpose acquisition companies (SPAC), we note the following path for capital raising this year:
- Pre COVID (January-February): Secondaries led at roughly 75% of the total, IPOs 15%-18%
- COVID Peak (March-May): starting in the second half of March, all deals decline, with IPOs essentially halting
- Secondaries pick up in May as companies raise money to shore up balance sheets
- Remainder of Year: IPOs rebound in June and pick up share of total deals; SPACs begin to take off in July
- By the end of the year IPOs and SPACs represent the majority of deals (typically secondaries represent the highest percentage of deal value totals)
Author
Katie Kolchin, CFA
Director of Research
SIFMA Insights
Related Resources
SIFMA Insights
US Equity Capital Formation and Listing Exchanges Primer
Initial public offerings (IPOs) are an important way for businesses to grow, innovate and better serve their customers. Yet, the number of public companies has declined 46% since its peak in 1996. Why might that be? What can be done?
SIFMA Insights
US Equity Market Structure Primer
Efficient and resilient market structure is key to sustaining investor confidence and participation underpinning the equity markets.
SIFMA Insights
US Multi-Listed Options Market Structure Primer
The primer series by SIFMA Insights fosters an understanding of the marketplace to set the scene to address complex issues arising in today’s markets. Learn important technical and regulatory nuances about options, contracts to buy or sell an underlying asset or security at a specified price on or before a given date.