Traders on the floor of the NYSE, August 29, 2023.
Source: NYSE
The drought in the IPO market could be near an end, according to Alan Waxman, the CEO and co-founder of Sixth Street, a big investor managing over $70 billion. Waxman believes that we are currently in the seventh inning of the downturn in the IPO market, with a “real pickup” in the pipeline. Sixth Street has experienced significant growth and has invested in various sectors, including direct lending, growth companies, real estate, insurance, and sports.
In his first-ever TV interview with CNBC’s Leslie Picker, Waxman stated, “I think people are starting to look for capital and pick their heads up, and obviously having the IPO market open a little bit of a small crack that obviously helps sort of get commerce moving again.”
Sixth Street has already invested in major players like Spotify, Airbnb, and Stripe through its growth strategy. Waxman predicts that the market will bounce back in the fourth quarter and into the first quarter of the next year, with volumes in 2024 expected to be “materially higher” compared to 2023.
The IPO market faced a significant slowdown over the past year due to aggressive Federal Reserve policies and recession fears suppressing investor appetite. However, if interest rates stabilize and the stock market continues to show positive gains in 2023, investors might become more receptive to new issuances. The upcoming IPO of Softbank-backed Arm next month is anticipated to be a crucial test for market sentiment.
Potential candidates for debut in the fall include Instacart, Birkenstock, Klaviyo, Turo, and Waystar, which provides healthcare billing software.
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