Despite a dramatic culling of autumn IPO hopefuls, Europe’s equity capital markets are still alive and well, driven by sizeable corporate placements to finance transformational M&A.

European ECM roared back to life last week, led by a GBP 940m placement by Informa to help part-fund its GBP 2.24bn Clarion acquisition.

Also, last week Unipol Assicurazioni set the terms on a EUR 2.5bn cash call from to fund its purchase of bank branches from Intesa Sanpaolo which it is selling as part of its bid to buy Banca Monte dei Paschi di Siena, the latest chapter in the increasingly convoluted saga of Italian bank consolidation.

Both deals have been part of a trend that is driving European ECM issuance this year.

If AI mega-deals have defined US equity exuberance, the hunt for corporate scale has been Europe’s growth story and it is showing few signs of slowing down, despite rapidly rising bond prices.

Source: Dealogic

“We have been across a number of these primary raises for M&A, and they are all going extremely well,” noted one ECM banker adding that his firm continues to field inbound investor enquiries for opportunities to back corporate scale seeking.

“All these primary follow-ons we are seeing are very well bid,” he added.

It isn’t just corporates benefitting from investor enthusiasm for event-driven equity. Private equity firms with large listed businesses are also finding ample demand and liquidity for sell-downs at sizes that were once unthinkable in Europe.

Corporate issuers have also been able to offload listed cross holdings to significant demand.

While getting a company to market through IPO has proved tortuous, selling already listed exposures in size has never been as easy in Europe.

“We are seeing the actual depth of liquidity in the market for secondaries being reasonably good,” a second ECM banker said. “There have been sponsor overhang situations that have done fine, with broad participation and very strong oversubscription.

“So, the liquidity is still there for names that have been around for a bit and where people already understand the value.”

The largest deal of the year in Europe so far, a CHF 4.9bn disposal of Galderma shares by EQT, fit this characteristic perfectly – with the sponsor significantly increasing the size of the deal to remove the overhang.

Gone are the days, it seems, when European equity investors would bemoan a seller causing market indigestion by selling too large a block trade – if it removes an overhang, then investor appetites appear far larger.

As of 9 October 2026, there have been 20 follow-ons sized at over USD 1bn.

Chasing alpha at year-end

Another reason for investor demand for follow-ons and block trades are their structural benefits at a time of wider market difficulty.

Despite benchmark US indices being close to record highs, the picture looks very different below mega cap tech stocks.

The S&P 500 equal weighted index, Dow Jones and Stoxx 600 are all down from August highs by between 4% and 5%, showing pain being inflicted on cyclical stocks as global sovereign debt yields have risen. These are key sectors for investors seeking to buy diversity against highly valued AI plays.

Block trades give investors exposure to these industries at price points often significantly below the trading level. And because issuers have typically been selling more paper this year, that unit discount is often far wider to compensate for the large slices of stock being sold.

This allows hedge funds to bank quick alpha and long-only mutuals to book significant paper returns, given they bought their position at lower value than the index price.

This is also the reason why IPOs are struggling. If buying a liquid listed stock at a big concession feels a solid way of banking returns in a hard market, taking a significant shareholding in a thinly traded newly listed business is a far harder ask.

As ECM Pulse reported last week, rising yields have decimated the IPO pipeline on both sides of the Atlantic. In Europe last week, Blackstone-backed HIP joined the list of casualties alongside Swedish infrastructure business Eleda.

These issuers join Spanish renewables business Ignis Energy and UK insurance services player Utmost Group in IPO holding patterns.

While African fintech Airtel Mobile completed an IPO last week, it leaned on a highly conservative structure and is trading below its GBP 1.96 IPO price at GBP 1.84 intraday on its second day of trading.

With year-end approaching and investors hungry for differentiated alpha, it seems much can still be done in European blocks. But a disappointing IPO year might be wrapping up earlier than many had hoped for in 2026.