In Europe the volume of IPO activity is expected to pick up in Q3 2018. We are seeing a pipeline of candidates—including issuers that did not have exit opportunities earlier in 2018—who are comforted by a relatively stable environment. However, investors continue to be selective and focused on pricing, particularly in the tech and life science sectors.

A few issues are also keeping things uncertain in Europe. The state of Brexit negotiations remains deeply unsettled, raising the potential of a “no deal” Brexit, in which the UK leaves the EU without concluding an agreement. Until we have a better sense of the likely outcome of negotiations, capital markets participants will continue to be hampered by uncertainty.

Geopolitical uncertainty and anticipated interest rate rises are other threats that may impact the European equity capital markets (ECM). In addition, tariffs—not only fallout from U.S. tariffs on China, but potential further U.S. tariffs against Europe—are also a threat. European counter-proposals, apart from a rumored “mini-agreement” on non-contentious items, have so far not gained traction. Simultaneously, the EU is tightening review of inward investment—mainly from China—in sensitive areas of technology and infrastructure. Both will affect cross-border deal-making and may affect the ECM market.