• Huge Permira monetisation shows other PE what is possible
• Hot market window could shut on peace talk break down, AI fears

Sponsors are once again hearing a clarion call in glorious surround sound from advisors begging them to be proactive in taking European ECM deal windows while markets remain open.

Sellers now have a few weeks prior to the resumption of corporate blackout periods that prevent insiders from selling down listed equity positions before earnings are revealed.

There is also no guarantee that today’s equity market exuberance will be sustained over the long-term, with fears growing over stock market excess in the age of AI and the fragility of the negotiated peace between the US and Iran.

Two private equity giants rode the European markets rally at the beginning of last week, driven by reports of a peace deal between the US and Iran, to exit large, listed holdings.

In the larger of the two deals, Permira sold its entire 12.39% stake in Polish e-tailer Allegro.

Permira printed the 131m-share block trade at PLN 33.60 per share for proceeds of PLN 4.4bn (USD 1.2bn), at a 3.5% discount to the previous close of PLN 34.82.

It was joined in the market by EQT exiting Swedish HVAC business Beijer Ref, also on 15 June, which sold a 6.39% stake at SEK 132 per share to raise SEK 4.1bn (USD 432.6m) through an accelerated bookbuild, ending a six-year investment story.

Bankers active in the market last week noted huge investor demand for deals, driven by the prospect of peace in the Middle East and, more importantly, the unblocking of global energy supply chains.

Issuers also were keen to get back into the market after waiting on the sidelines to give investors space during the monumental USD 86.2bn IPO of SpaceX.

“There was lots of focus on SpaceX, and most issuance was delayed accommodating the capacity drain of that IPO,” said a banker.

“Now we’re on the other side of the deal, we are seeing people wanting to put money to work.”

A second banker noted that a huge flood of reverse enquiries had come in after the SpaceX IPO was priced, focused on possible deals in the highly liquid secondary market. IPOs have been a tougher ask during the all-encompassing global marketing period of history’s largest ever listing.

Win-win for buyers, sellers

PE issuers are once again waking up to the gargantuan prints they can achieve via European secondary sell-downs, allowing them to exit holdings in a single deal, where in the past it may have taken two or more block trades to offload a position.

“People are looking at this market and thinking ‘wow’ and then seeing what they can do,” added the second banker.

There is also a strong incentive for the buyside, with benchmark equity indices having performed strongly so far this year.

Active money needs to outdo passive benchmark trackers, and a strong differentiated way in which these managers can prove their worth continues to be European ECM.

Source: Dealogic

“Active investors have got strong P&L this year and can therefore spend more on these deals,” said the second banker.

“They are all looking at everything and doing what they can do, while they can. It’s all about the performance; the market In Europe is up almost 7% YTD and they need to be better than that benchmark.”

Investors in European accelerated deals have largely made strong returns from these transactions. The market has proven to be largely a rare win-win for buy and sell side.

Buyers in the Allegro sell-down, for example, were sitting on huge 14.6% profits at market close on 18 June, over just three full trading days following the pricing of the deal, compared with just a 0.4% gain in the Stoxx 600.

When these deals pay off, they can really pay off.

If buyers continue to make returns and wider market conditions are conducive, other sellers – particularly sponsors – can move fast on ECM deals.

Market open…for now

The pricing of SpaceX and any lessening of hostilities in the Persian Gulf seem to create opportune moment for equities and more equity capital markets issuance from private equity firms eager to distribute returns to LPs.

There is significant scope for sponsors to print multi-billion-dollar disposals while the good times continue to role. This could present opportunities for GPs like Blackstone, with a 74.2% of Spanish gaming company Cirsa; or CVC and Partners Group, which together own 47.63% of Zabka.

The second banker noted that sponsors are cognisant that market windows can close fast, but some still exhibit hesitancy in the hope that in a rising market, they can always generate more return by waiting a little longer.

Timing these things can be perilous, however, particularly in a world where geopolitical instability lingers and underlying equity markets remain priced for perfection.

Almost everyone in the market is asking themselves how long this bull market can last, the second banker said.

“We are all looking over our shoulders,” he added.

ECM Pulse wrote last week that fears of an AI bubble bursting are mounting, given the vastness of the capital being deployed for data centre buildout and the pressure being put on equity markets to fund it.

Also, as has been the case since the outbreak of war in the Middle East earlier this year, any peace talks between Iran and the US are fragile and liable at any moment to break down.

While there appear to be face-to-face negotiations taking place between the two nations as ECM Pulse hits the wire, Iran has threatened to walk away from the table should Israel continue to strike southern Lebanon.

This Pandora’s box is a difficult one to close, no matter how much US President Donald Trump might want to slam it shut.

As such, any issuance window might prove to be short-lived.

A PE fund that waits too long for share price appreciation is liable to miss the boat and may end up selling down at a lower level in the future should the market turn again.

Every sponsor has a different return profile on their assets, different LPs to satisfy and different IRR targets, which will lead to a diversity of views on this market.

Two PE firms on the same asset may act differently in their disposal plans, as Permira and Cinven did on their Allegro sales this year.

However, the golden rule of ECM in Europe remains as true now as it ever was: deal when you can, leave nothing to chance.

“What we’re saying now to our clients is that the time to go is now,” said the first banker.

“There are lots of unknowns later this year in terms of interest rates, US midterms, additional large cap tech deals expected in 2H26/1H27.”

Not all sponsors and clients will take it, but it is good advice nonetheless.