Capital Market Deal Flow on the Rise

Alex Shukhman — Wed, 23 Jun 2010 05:29:49 +0000

After the devastation of late 2008 and much of 2009, to the delight of most transactional attorneys, the U.S. capital markets have seen a recent resurgence. According to Renaissance Capital, there were 63 U.S. IPOs in 2009. That amount has almost been matched in 2010 with 51 so far and there are still six months left in the year. As further evidence of the improved capital market conditions, private equity funds have jumped on the bandwagon to increasingly use IPOs and secondary offerings as exit strategies for investments in which they have been locked-in for some time.

Pitchbook notes steady growth in both types of exit strategies in the fourth quarter of 2009 and the first quarter of 2010 relative to prior periods. Similar activity is being seen in the venture capital industry; the first quarter of 2010 has already matched the eight venture backed IPOs in all of 2009. In terms of industries that have seen the greatest growth in the number of IPOs, it’s been technology, financial and real estate.

With Los Angeles being home to large banking/financial and real estate industries, it is foreseeable that law firms servicing these types of capital markets in Los Angeles are witnessing some of the rewards of this increased market activity. It is hard to foresee whether intervening events like Greece’s financial woes will curtail activity, but there is a general sense in the field that the positive momentum may very well continue.

Post by Alex Shukhman, attorney at Goodwin Procter LLP in Los Angeles.

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Capital Market Deal Flow on the Rise