IPOs No Longer Lagging — They’re leading — Evening Brief – 09.22.25
After lagging earlier in 2025, the IPO market is now firmly back in the spotlight. The Renaissance IPO ETF (IPO) has surged 22.0% year to date through September 16, far outpacing the SPDR S&P 500 ETF (SPY), which has returned 13.3% over the same period. The turnaround follows a stretch of underperformance that reinforced the view that private equity was siphoning away top companies before they could reach public markets. Yet, in recent weeks, IPOs have not only regained momentum but are now leading U.S. equities by nearly nine percentage points.
Part of this reversal is being driven by renewed issuance. Renaissance Capital reports that six companies went public over just five days in September, each raising more than $100 million — the first time such volume has occurred since November 2021. In aggregate, those deals brought in $4.4 billion, a sign that the long-dormant IPO pipeline is opening. The technical backdrop supports this shift as well: IPO’s relative strength versus the S&P 500 has broken decisively higher, a bullish signal for continued momentum into the fall.
Despite the pickup, challenges remain. Private markets continue to exert competitive pressure. McKinsey Global notes that private debt and equity assets under management have compounded at 20% annually since 2018, while Morgan Stanley highlights that private investments have outperformed public equities over the past decade. This structural headwind means IPO windows may remain cyclical rather than permanent.
For investors, the market implications are twofold. First, the rebound in IPOs offers an incremental source of equity alpha after a long drought, particularly for active managers hunting growth. Second, the revival may provide relief for venture capital and private equity firms eager for liquidity events after years of muted exits. If issuance continues to ramp up, it could ease pressure on late-stage private portfolios and broaden opportunities for retail investors who have been locked out of pre-IPO gains.
Whether this resurgence proves durable will hinge on macro conditions. A supportive rate environment, stable inflation, and resilient investor risk appetite are key for sustaining IPO demand. For now, though, the momentum is clear: IPOs are no longer lagging — they are leading.