FX168 Financial News (North America) reported that on Monday (November 18), Brian Bernasek, co-head of the Carlyle Group's private equity team in the americas, stated that the number of initial public offerings (IPOs) in the usa is expected to steadily increase by 2025, but there will not be a rush of companies going public.

Bernasek revealed that three to four portfolio companies under Carlyle plan to go public next year. Following last month's successful IPO of StandardAero Inc., the stock price of this aviation maintenance service provider has risen by 19%, after raising $1.7 billion in its IPO, becoming the third largest IPO in the usa market this year.

Data from Bloomberg shows that as of November 18, the usa market has raised about $40 billion through initial public offerings this year, a 60% year-on-year increase, but still below the average level of the ten years prior to the pandemic.

Carlyle's IPO plans.

Carlyle's IPO candidates include software company Hexaware Technologies Ltd., which submitted a $1.2 billion listing application in September. Bloomberg reported in September that Carlyle also revived the IPO plan for chemical manufacturer Nouryon, aiming for an IPO in New York as early as early 2025. Additionally, Medline Industries LP, held jointly with Blackstone Group, is exploring IPO matters, with a potential valuation of up to $50 billion.

Bernasek stated, "The IPO market is usually either completely open or completely closed. Companies can either successfully go public with good pricing and stock performance or cannot go public at all. The market has been closed for a while, but it is now recovering."

Data from Bloomberg indicates that since 2021, global companies have raised $468 billion through IPOs, while the total raised in 2021 alone reached $669 billion.

Investors are cautiously optimistic.

Despite the large cap index nearing historical highs, the IPO market remains relatively slow to recover. This year, newly listed companies have performed better than major benchmark indices, attracting investors willing to take risks. Companies in the USA have raised over $0.2 billion through IPOs this year, with their stock prices averaging a 31% increase, while during the same period the **s&p 500 index** rose by 25%.

However, the cautious atmosphere in the IPO market has left companies facing a buyer's market, forcing them to attract investors with attractive pricing. "The current market is one where buyers need to make money," said Bernasek during this month's SuperReturn North America conference.

The relationship between interest rates and the IPO market.

After the Federal Reserve's 25 basis point rate cut this month, expectations for further rate cuts have become key. Nevertheless, investors have differing views on whether the Fed will lower rates next month, as economic data shows that the USA economy remains strong, while central bank officials are taking a wait-and-see approach.

Bernasek noted that the Carlyle Group expects interest rates to remain stable. He said, "Our operations are based on the assumption that rates will generally hold at current levels and do not hope for multiple rate cuts to facilitate new trades or exits."

Bernasek pointed out that a major risk for next year's IPO market may come from adjustments in Federal Reserve policy. "If interest rates rise again due to inflationary pressures in the absence of substantial economic growth, this could undermine market momentum," he said. However, he also added, "Currently, this situation seems unlikely to occur."

He emphasized that debt levels will be key for companies to attract potential buyers. "In the current market environment, a company's debt ratio needs to be close to 3.5 times, but it may rise back to about 4 times, which is a normal level historically."