The Toll Booths: How to Buy Exposure Today
Because direct investment in these private giants is off the table, the practical alternative is to look at the facilitators. You do not need to mine the gold if you can sell the shovels. In the financial world, the shovel sellers are the institutions sitting at the very centre of the IPO ecosystem.
To me, there are three key proxies worth your attention.
Goldman Sachs
Goldman Sachs is the archetypal beneficiary of a buoyant IPO market. The bank earns fat fees at multiple points in the listing process. They charge for advisory work in the paranoid months before a deal, they take underwriting fees when the shares are finally priced and sold, and they hoover up follow-on business when these newly public companies inevitably return for debt financing.
Goldman's capital markets division is a beast. It has consistently ranked among the top underwriters globally. A meaningful step-up in IPO volumes would flow directly into its fee revenue like water down a drain. I would bet my last pound that any major listing from the current cohort of high-profile private companies would involve Goldman in some highly lucrative capacity.
Morgan Stanley
Morgan Stanley occupies a similarly privileged position in the IPO origination landscape. The bank has a remarkably long track record of shepherding high-growth technology companies through the exhausting listing process. Frankly, its equity capital markets team is widely regarded as one of the most sophisticated, and ruthless, in the industry.
Morgan Stanley's revenue from investment banking is highly sensitive to deal volumes. That means the bank's fortunes are inextricably tied to whether the current pipeline of private unicorns eventually reaches public markets. Like Goldman, Morgan Stanley would likely feature prominently on the prospectus of any major listing involving a Databricks or a Stripe. If the floodgates open, Morgan Stanley will be standing there with a very large bucket.
Renaissance Capital IPO ETF
If you prefer not to bet on the investment banks, the Renaissance Capital IPO ETF takes a completely different approach. Rather than backing the Wall Street giants that facilitate the listings, this fund attempts to capture the performance of the companies that have recently gone public.
The ETF holds a shifting basket of new listings and is regularly rebalanced to reflect the ongoing flow of fresh IPOs into the broader market. This makes it a fascinating instrument for investors who want broad exposure to new-listing momentum, rather than concentrating their capital on any single unproven company or legacy bank.
