(Bloomberg) — Executives at smaller investment banks are giving bullish forecasts for equity capital markets for the rest of the year.
Evercore Inc. and Stifel Financial Corp. are positive about the flow of initial public offerings going forward, betting that lesser volatility coupled with the White House agenda to ease regulations could spur more activity. Evercore saw a 4% year-over-year jump in its equity and debt underwriting fees to $32.2 million, the firm reported Wednesday.
“Our underwriting business experienced an uptick in activity in May and June, and we expect these positive trends to continue as we enter the second half,” John Weinberg, Evercore’s chairman and chief executive officer said on the earnings call.
During the second quarter, the firm worked on the IPOs of Chime Financial Inc., Hinge Health Inc., MNTN Inc. and Omada Health Inc., and follow-ons for Birkenstock Holdings Plc and Waystar Holding Corp.
At Stifel, meanwhile, equity-capital raising revenues fell 3.7% to $46.2 million due to lower volumes. But that hasn’t stopped CEO Ronald Kruszewski from being bullish about the second half of the year.
“We’re seeing early signs of a broader IPO recovery and follow-on activity remain sponsor-driven, with private equity continuing to lead issuance,” he said at the company’s earnings call.
During the quarter, the firm acted as a bookrunner on the IPOs of Smartstop Self Storage REIT, Etoro Group Ltd. and Hinge Health and also worked on offerings for Brad Jacobs’ QXO Inc., one of the most prolific issuers in the US this year.
The executives from the two banks are echoing the views of their peers from larger institutions. Morgan Stanley’s Chief Financial Officer Sharon Yeshaya said that despite a slowdown in April and much of May, convertibles, follow-ons, and IPO issuance all accelerated toward the end of the quarter. Goldman Sachs Group Inc. executives echoed the view that companies were able to freely access the IPO market, but that private equity-backed assets were slower to come to market.
Reporting last week, Raymond James Financial Inc. saw a 15% year-over-year increase in equity underwriting revenue and executives told investors that the mood in the market has improved considerably after April’s tariff-driven disruptions.
“We could be shocked again tomorrow, who knows, but certainly the market sentiment now is more positive than it was in early April,” Paul Shoukry, Raymond James’ chief executive officer, said during the company’s earnings call.
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