The event summary below has been published with participants anonymized in keeping with the event’s Chatham House Rule, and with approval from our contributing partners.
ICR Capital recently hosted a panel discussion with portfolio managers at AllianceBernstein, TimesSquare Capital Management, and a leading multi-strategy asset manager about their perspective on sponsor-backed IPOs and secondary-sell downs. Sponsors and investors came together at Centurion New York to engage in a candid conversation under the Chatham House Rule, against the backdrop of the Manhattan skyline.
U.S. IPO activity has picked up from the lows of 2022 and 2023 and continues to show promise heading into 2026 despite the recent government shutdown. While each IPO process is unique, our panelists and audience members identified the following common themes when it comes to successful sponsor-backed IPOs:
- Early, and frequent, investor engagement. Sponsors and their portfolio company should regularly meet with buy-side investors well before an exit process kicks off. Our panelists noted these meetings are taking place up to two years in advance. These interactions – whether NDRs, private company investor days, or TTW meetings – help investors build relationships with management and understand a company’s strategic growth plan; they also help companies build trust and establish credibility within the investment community.
- Manage expectations. Provide realistic growth estimates for the company’s first few quarters following its IPO. One of the best ways to secure investor support for a company’s stock in the aftermarket is to establish a track record of consistently meeting or exceeding expectations. This will lead to sustained investor engagement and should optimize future sell-down transactions.
- Establish clear monetization paths. Investors want to see thoughtful monetization paths to mitigate investor concerns about stock overhang. Our panelists prefer that sponsors sell a portion of their shares in the IPO and then engage in a disciplined sell-down of their shares in the aftermarket.
- Sponsor reputation matters. While not quantifiable, the buy-siders in the room noted that poor sponsor reputation (largely the result of historical aftermarket behavior) creates elevated risk and investor cynicism. A sponsor’s reputational issues do not prevent an investor from participating in an IPO, but it is certainly a consideration when all else is equal.
Our featured speakers ended the session noting that the interests of the sponsor, portfolio company and buy-side investors are aligned and that consistent communication and respecting the interests of all parties can help maximize the chances of a successful IPO.
