Solutions
Barclays Investment Bank offers advisory, finance and risk management services that connect your ideas to capital and power possibilities.
View thought-leading perspectives from Barclays Investment Bank’s financial experts and Research analysts.
Get the latest news about Barclays Investment Bank businesses, people and our work in the community, as well as our upcoming events and conferences.
The capital markets provided a deep pool of financing for global issuers throughout the pandemic. Taylor Wright, Co-Head of Capital Markets, believes three factors could push volumes even further in 2022.
The capital markets have provided a deep and resilient pool of capital and funding for global issuers throughout the pandemic.
In fact, in 2020 and 2021, new issue volume averaged $1.6 trillion more than the roughly $13 trillion of annual average new issue volume we saw in the three years leading up to the pandemic.
Perspective 1: Alternative asset managers drive explosive growth
The assets under management of alternative asset managers have grown exponentially. Alternative managers' share of AUM has doubled since 2005, is expected to double again by 2025, and these institutions are raising larger funds than ever before.
As funds grow, they'll need to find larger targets, increasing financing needs for Leveraged Buyouts and public-to-private M&A.
This dynamic should drive leveraged finance activity, potentially leading to volumes in excess of the $2.6 trillion that we've seen on average since 2018.
The scale of these investments should lead to larger companies at the time of exit, potentially increasing the number of IPOs rather than strategic sales or private-to-private transactions simply because of the more limited universe of scale buyers.
Perspective 2: M&A volumes boost capital markets activity
M&A volumes declined in 2020 due to the pandemic, but they have rebounded in 2021.
M&A volumes could accelerate further, supported by healthy corporate balance sheets, historically low rates and a strong stock market that has increased the value of public companies' acquisition currencies.
More M&A activity should lead to increased needs for bridge facilities as well as increased capital markets activity to establish permanent capital structures post-acquisition.
Perspective 3: The mega trends of technology and ESG
Over the past five years, technology alone has accounted for 21% of Global Equity new issue volume and Global M&A.
We expect the pace of the formation of new technology companies, as well as existing companies buying critical technologies for their businesses, to accelerate further.
On the other mega trend of ESG, issuers' ESG strategies are an increasingly important assessment element for the buy side.
Market growth and product evolution mean that ESG will be an important topic for all of our issuer clients in 2022 and beyond.
Over time, we do expect to see differentiation in both pricing and investor access driven by ESG.
While there will be uncertainties to contend with over the next 12 to 24 months, such as inflation, global fiscal policies and COVID-19, we expect the global capital markets to remain active and resilient.
Taylor Wright is a Managing Director and Co-Head of Barclays’ Global Capital Markets business. Taylor joined Barclays in 2019 as Co-Head of Americas Equity Capital Markets.
During his more than 30 years in the industry, Taylor has held multiple positions in Banking and Capital Markets in and has worked with corporate and institutional clients across a variety of industries including Financial Services, Technology, Energy, Healthcare and Real Estate, among others.
Over his career, Taylor has lived and worked in the US and Hong Kong and has originated and led more than $300bn of equity and equity-linked offerings across multiple industries and geographies. Taylor received a BA from Cornell University and an MBA from the Darden Graduate school of Business
Helping Hammerson take its sustainable ambitions to market
Retail property developer Hammerson is making positive steps by embedding bold ESG goals in its new landmark sustainability-linked bond.