Market volatility remains heightened, geopolitics are fraught and macroeconomic health is questionable, but a cohort of investors appear ready to put money to work in ECM after a market rally in recent weeks has set up a platform for revival.

Europe’s Stoxx 600 is now up more than 10% from recent lows at the beginning of April, when universal tariffs introduced by US president Donald Trump battered stock markets. Since then, however, investors have tried to put money to work and that has lifted stock markets higher again, leading to hopes that Europe’s IPO market could be awakened from a deep slumber.

“This market is fascinating, and we have found people are a lot more constructive than they were just a few weeks ago,” said a banker. “Of course there are conversations around volatility still being high, we know that; and we know that many corporates have had a significant wobble, but investors’ needs are still broadly the same.”

The banker also said: “Pricing terms on ECM deals have changed slightly, and it is interesting being back part of those conversations, but timings are now being accelerated again on the bounds of what people can do. Issuers have slightly made peace with a different paradigm and our job will be around managing expectations around that, but we have some good sizeable stuff we are working on.”

A second ECM banker noted that feedback from investors is focused on market predictability. Without being exposed to huge single-digit percentage swings in stock values up or down each day, investors can think about pricing, he said.

That isn’t to say that market risk has dissipated and the quality bar for assets remain high. All sources speaking to ECM Pulse this week talked about businesses needing to show resilience through various cycles to be given an audience with investors given how quickly geopolitical and macroeconomic risk is changing.

Source: Dealogic

But there is a pipeline of deals that could rescue Europe’s IPO market in 2025. There have been some early signs of activity with a few mid-cap listings launched in recent weeks and there are several larger transactions in the offing.

German pharmaceutical company Stada, Dutch telco company Odido, security systems provider Verisure, financial technology provider ISS Stoxx, SMG Swiss Marketplace Group (SMG) have all been reported as possible IPO issuers in 2H25.

Meanwhile, Spanish gaming company Cirsa, owned by Blackstone, German medical solutions business BrainLAB, fintech company Ebury, and German auto e-commerce provider Autodoc are also still among reported candidates in the European IPO pipe, the three listings are all possible before the summer break.

The barrier for entry for all will be challenging, with investors likely to stay away from assets deemed to be lower quality.

“I feel very positive about the IPO market, even pre-summer, since the back end of last week we have seen a lot of early look meetings incoming and there are a couple of assets which a month ago were not coming before the summer now are targeting that window, all of a relative size,” said an ECM investor. “I think there still is a lot of scepticism towards leverage and some private equity-backed companies.

“There is a lot of focus on quality and on businesses not having too much leverage. The window is not open for the mediocre assets in the pipeline, regardless of price, it is only open for the higher quality assets in our opinion.”

Europe a safe haven…for now

While European stock markets have traditionally underperformed their US peers, this year has seen a trend of investment flows leaving the states and flowing to under owned European businesses.

ECM bankers now see the market as one of the opportunities for investors.

“Europe has historically been a place where you could generate solid, mid-sized returns through ECM,” said the second banker. “While European IPOs used to struggle, often failing to pop and suffering from poor liquidity, that dynamic has improved somewhat this year. Asset flows into the region have helped boost trading liquidity, which in turn has supported better performance across new listings.

“In fact, many recent European IPOs have outperformed their US counterparts, making Europe feel like a safer, more predictable market from a regional perspective. We’re seeing more companies from sectors investors want to buy, names like ISS, Verisure, and even Autodoc.”

The unpredictability of the new Trump administration, a trade war between the US and China, and dire predictions for the US economy will likely continue to drive some equity flows from the US and perhaps even, for a time, limit the attractiveness of US stock exchanges.

The UK in particular looks set for a revival, with Ebury thought to be just one of several businesses now considering a London listing.

“I think Europe, as a continent, is seen as a relative haven and there is a substantial shift in the mindset of European companies, we speak to in not automatically wanting to be listed in the US,” said the investor. “We think that this will lead to a UK boost especially as a sort of neutral north-Atlantic equity hub.

“We think this global political dynamic could be very positive for UK capital markets.”

That said nothing is certain, even in Europe. Just as ECM Pulse was published, Germany’s major coalition parties fell short in the first ballot to formalise Friedrich Merz as chancellor, a huge surprise to commentators and markets; the German DAX was down 1.4% for the day as of just before 10:22 BST.

This remains a market that requires nimble footwork from investors.