IPO OUTLOOK FOR 2018

IPO market activity picked up in the fourth quarter. Overall in 4Q17, 68 companies (including blank check and closed-end funds) went public, double the amount in the same quarter a year earlier. In the background, corporate earnings grew for the fifth quarter in a row and appear poised to expand at a double-digit pace into 2019. Looking ahead, we think the market for IPOs is likely to remain bullish in 2018. On the positive side: economic growth, led by the employment environment, appears to be accelerating; volatility remains low; and corporate earnings growth is expected to grow at double-digit rate, as the dollar stabilizes, oil prices continue to recover and tax rates decline. The IPO pipeline remains robust, with about 180 companies having filed with the SEC and a number of interesting recent filings, such as AXA Equitable Holdings, which owns the namesake insurance company as well as Alliance Bernstein; Workplace Property Trust, which is focused on office and flex real estate in U.S. suburbs; and VICI Properties, which owns real estate assets in the gaming industry. We look for more biotech, clean tech, medtech and transportation companies to file with the SEC in the weeks ahead.

Initial Public Offerings illuminate economic strength and provide evidence of how corporate America is feeling about its future.