- Special Purpose Acquisition Companies (SPACs) – We anticipate approximately 2-4 new SPAC IPOs a month. SPACs will continue to be a viable vehicle to access the U.S. public markets but, given the difficult PIPE market, de-SPAC transactions will likely be limited to companies not looking for additional funding or where new funding comes from existing target company stockholders, SPAC sponsors, or strategic investors.
- The Initial Public Offering (IPO) market – The IPO market is expected to rebound in 2024 following a challenging 2023, with a growing pipeline of companies seeking access to the U.S. public markets. Non-U.S. issuers are likely to continue to look to the U.S. market from Asia, South America, the Middle East, and other regions where local markets may not be as strong, lending further impetus to the rebound. Elections in the United States, coupled with continuing geopolitical developments, will create market distraction.
- Climate Disclosure Rules – The Securities and Exchange Commission (SEC) climate disclosure rules are currently expected by April 2024, although there remains some uncertainty on timing at this point. Nonetheless, Diversity, Equity, and Inclusion (DEI) and other Environmental, Social and Governance (ESG) topics are likely to continue to experience stakeholder and political pressure, particularly as U.S. election rhetoric heightens. Reconciling the EU requirements with the coming U.S. disclosure standards will present challenges for many international companies. SEC rules, once issued, are likely to be challenged in the U.S. courts, resulting in a delay in implementation.
- The Private Credit Market – The question remains whether the private credit market will overtake the debt capital markets as a new source of debt capital for corporations. This unregulated financing product has been getting more attention from regulators and is an area to watch.
- Flight to Quality – The flight to quality will continue as investors seek secure opportunities in light of U.S. political uncertainty. This will impact capital raising activities as investors carefully scrutinize risks and rewards before deploying their dollars.
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