As private equity firms look to offload holdings, the US is set to make a comeback for IPOs.

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Wall Street banks are gearing up for initial public offerings as private equity groups look to tap floating U.S. stock markets to offload some of their major holdings.

Several private equity-backed groups have filed paperwork with securities regulators for IPOs, including medical device company Medline and software maker Genesis.

In the year Bankers and analysts are expecting more announcements in the first half of 2025 after US stocks posted blockbuster gains in 2024 and President-elect Donald Trump will cut regulations and taxes.

Investors and banks have been buoyed by strong share prices following recent deals. In the year Nine of the 10 biggest IPOs in 2024 ended the year above their list price, with half of them – led by social media group Reddit – posting triple-digit gains.

“Sequential improvement and more activity, that’s the headline,” said Eddie Molloy, head of global equity capital markets at Morgan Stanley. “With a somewhat more certain (economic) background for regulatory policy and if the Fed is more pro-business (by lowering interest rates), then we should definitely have more work.”

In the year The Federal Reserve’s high-volume campaign starting in 2022 has curbed investors’ appetite for new listings, a rush of U.S. IPOs expected after a drought over the past three years.

Higher rates reduce demand for assets that are perceived as high risk or valued for future growth prospects – both common characteristics of newly listed companies. Economists have delayed their forecasts for how quickly the Fed will cut interest rates over the next 12 months, but expect rates to fall further after the central bank announces three consecutive cuts through the end of 2024.

In 2024, U.S. listings, excluding special-purpose buyout companies, raised $32 billion, according to Dealogic, up nearly 60 percent by 2023.

Massive government and central bank stimulus programs boosted markets and in 2010 Some observers predict a return to pre-pandemic levels of IPOs, with a $150 billion surge in 2021.

However, bankers expect equity capital markets activity to top the pre-2020 average of $38 billion.

“Large (private-equity-backed) IPOs will be the most important theme,” Molloy said.

This trend is driven in part by private equity firms under pressure to return funds to backers after a long drought. It reflects a change in investor appetite after many were burned by bad bets on losing startups during the pandemic-era IPO frenzy.

“These are generally larger and more profitable companies, and therefore more attractive to public market investors,” said Jeremy Abelson, founder and portfolio manager of Irving Investors, a growth-focused fund that invests in private and public companies. “The difference between now and 2021 is there was a lot of enthusiasm for mid-sized businesses in 2021. We’re not going to see that again for a long time.”

Fintech will be a theme to watch closely in the first half of 2025, now Sweden’s buyout, postpaid group Klarna is expected to be one of the first big companies to boldly support the market.

San Francisco-based mobile banking group Chim has renewed its plans to go public after considering a listing two years ago. Chime has previously discussed valuations of between $15bn and $20bn with investors – the same size as Klarna – according to two people familiar with the talks, although tech and financial stocks have made strong gains since last month’s US election, which could help boost it. His last guess. Chim declined to comment.

Some observers were surprised by the relative quiet in the IPO market, given the broad strength in U.S. stocks over the past two years, with the S&P 500 nearly 70 percent off its 2022 lows. However, most of the gains were made by smaller, much larger companies rather than smaller groups that floated their shares.

Ryan Nolan, co-head of software investment banking at Goldman Sachs, said the expansion of stock market gains in the second half of 2024 helped boost confidence. “There is so much excitement and inspiration ahead.

Many private companies have secured large amounts of funding through 2021 at inflated prices, reducing the urgency for follow-on deals and making executives reluctant to accept new cash at the set rate.

Samantha Lau, chief investment officer of small- and mid-cap growth stocks at AllianzBernstein, said private investors are now taking a “more realistic view” on valuations.

“Enough time has passed since 2021 for things to start to melt down,” she added.