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European IPO market starts 2026 at record pace, sparking hope of revival

Investment bankers embrace ‘intense’ pitching as groups in defence, tech and wider economy prepare to go public

Europe’s initial public offerings market has recorded its best ever start to a year, sparking hope among investment bankers and investors of a surge in new listings after a prolonged slowdown.

Ammunition maker Czechoslovak Group (CSG) raised €3.8bn on Friday, with its shares soaring 31 per cent for a near-€33bn valuation, passing a key test of market confidence as a series of other large groups prepare to float.

The Prague-based group’s flotation in Amsterdam was by far the largest in Europe this month and propelled the region to its fastest start to the year for IPO fundraising since at least 1995, according to Dealogic data.

Five flotations in the region this month have raised about a quarter of the amount achieved in the whole of 2025.

“This is probably the best IPO market in Europe . . . in over a decade,” said Tom Swerling, global head of equity products at Deutsche Bank.

“This is a calendar and pipeline of assets that will allow us to demonstrate the viability of the IPO market and begin to restore confidence,” he added.

The queue of companies gearing up to list mirrors the US, where big artificial intelligence groups head a crop of potential mega-listings. Elon Musk’s rocket maker SpaceX and tech groups OpenAI and Anthropic are working on IPOs that could raise tens of billions of dollars.

Hong Kong has also been boosted by Chinese AI groups coming to market.

A revival would deliver a fee bonanza for investment banks, which have had to navigate a post-pandemic slowdown in new listings against a backdrop of high interest rates and choppy markets.

“The level of pitching is intense, and there is a much more robust pipeline of deals compared to last year,” said Clara Comellini, head of Emea equity capital markets blocks and wealth management origination at UBS.

Advisers hope CSG’s IPO will add momentum to listing plans of other defence groups such as Franco-German tank maker KNDS and German group Vincorion.

Friday’s listing “materially reinforces confidence in the European IPO market”, said Luca Erpici, head of Emea equity capital markets at Jefferies.

“Investor appetite is also driven by the improving quality and scale of potential IPO candidates,” he said.  

A strong rally in European stocks last year has lifted valuations, boosting companies’ chances of attractive pricing in public markets.

However, bankers cautioned that the success of CSG’s listing did not signal the onset of an anything-goes market. Previous predictions of a listings resurgence have been thwarted, including by US President Donald Trump’s trade tariffs announced last April.

“What I don’t see here is a signal that you can get any size, any pricing, any sector done,” said Andreas Bernstorff, global head of equity capital markets at BNP Paribas. “We’ll continue to have to be structured, careful and cautious in terms of building a transaction.”

Last year Europe hosted 105 IPOs worth €16.1bn, a slight decrease from 2024 and just a fifth of the total raised during the 2021 boom. The region accounted for only a tenth of global IPO fundraising in 2025 as other markets, including the US, saw an uptick in activity.

Bankers pointed to industrials, logistics and technology as sectors ripe for a pick-up in activity in Europe this year.

Advisers are also focused on private equity-backed companies gearing up for long-awaited IPOs as their owners look to sell down their holdings and return cash to investors.

Big private equity-owned groups that could go public this year in Europe include Hg’s €19bn software company Visma, which is targeting a London IPO, €10bn German car marketplace Mobile.de and the $25bn German Industrial group TK Elevators.

These deals’ prospects got a boost in October from the Swedish IPO of security services group Verisure — backed by investor Hellman & Friedman — which raised €3.2bn.

“A lot of sponsors have owned these assets for a long time and are facing internal pressures to monetise, particularly in the face of equity markets at all-time highs,” said Andrew Briscoe, Bank of America’s head of Emea equity capital markets syndicate.

Visma’s listing will be a bellwether for the London market, which is seeking to bounce back after a drought of significant offerings.

Other potential London IPO candidates include the bookseller Waterstones, breakdown assistance provider RAC and Hong Kong conglomerate CK Hutchison’s retail unit AS Watson and its European telecoms business.

Faster trials and lower costs are drawing western multinationals as they seek new treatments

Investors in western biotechs face the prospect of lower valuations as Chinese start-ups attract growing investment from global drugmakers looking to replenish their pipelines.

China has emerged in recent years as a hub for drug development, particularly early-stage candidates, with faster timelines allowing companies to reach proof of concept ahead of western rivals.

Because the country’s biotechs can run clinical trials more quickly and cheaply, rivals from elsewhere risk being “undercut in licensing or partnering discussions”, said Oliver Kenyon, senior director at London-listed life sciences investor RTW.

This is particularly the case for “fairly crowded therapeutic areas”, he added, noting the trend “might compress long-term returns” for investors.

“Chinese biotech clearly represents a structural shift in global drug development,” Kenyon said. “We don’t think it’s a cyclical phenomenon . . . they’re here to stay.”

Historically, China was known for its ability to quickly replicate new drugs developed elsewhere.

While that is still the case, Chinese groups are now also developing new therapies. They are taking the lead, for example, on antibody-drug conjugates, which use antibodies to deliver chemotherapy in a much more targeted way.

Chinese companies account for more than half of new ADC drugs in early clinical trials, according to consultancy McKinsey. They are also making strides in developing next-generation Car-T treatments for autoimmune diseases, and small interfering RNA (siRNA) therapies. These can temporarily turn off harmful genes.

According to Zavain Dar, founder of New York-based life sciences fund Dimension, the west is losing its tradition of being “inventors and cowboys”.

“Until we in the west regain comfort and confidence again charting the frontiers of biology, chemistry and science, then we’ll be chasing the same commoditised known biology against cheaper and faster competitors.”

Meanwhile, multinationals are moving to reap the advantages of China’s distinct operating environment. In the past year, more than $85bn of licensing deals involving Chinese companies have been signed across more than 100 transactions. Most relate to early-stage drugs where foreign companies take on the rights for further trials and commercialisation outside the country.

Some of the biggest deals include GSK’s up to $12bn partnership with Jiangsu Hengrui on a potential treatment for chronic obstructive pulmonary disease and 11 other new medicines. Novartis in September announced a $5.2bn licensing deal with Chinese biotech Argo in part to have access to its siRNA technology.

Daniel Lyons, healthcare and biotech portfolio manager at Janus Henderson, said one way for western companies to compete was to “develop their products across multiple indications, and enter clinical trials with the best possible version of their product”.

“The goal,” he said, “is to avoid going into trials with something that could easily be improved upon later.” Otherwise, he added, it risks giving Chinese competitors an opportunity to build on their work.

Michael Patten, chief strategy officer of Harbour BioMed, a global biotech firm with Chinese roots that has a partnership with AstraZeneca, said no one is surprised by the rise of Chinese biotechs because the “improvement and quality in the China landscape is immense”.

Patten, who joined Harbour last year, said he did not consider the competition between Chinese biotechs and their western peers as “zero sum”.

“If you’re a patient looking for novel therapies, you don’t care where the drug comes from,” he said. “But if you’re an investor with a vested interest, perhaps you can see threats. It’s a healthy debate that needs to be had about the changing dynamics of the biotech industry.”

Chinese biotechs have gained an edge from shorter clinical trial timelines as well as regulatory changes that have made processes quicker.

Steve Ruston, chief executive of Persica, a UK biotech developing treatments for chronic lower back pain, said his company’s experience working with hospitals and recruiting patients in Europe for clinical trials had been a “nightmare”, with contracts taking many months to finalise.

“If you want to bring new medicines through, the whole contracting and decision-making process has to be looked at,” he said, adding that this applied to hospitals in the UK, France and Spain. “If China can do clinical trials faster, that has to be of interest.”

Several Chinese biotech investors said they have been approached by US and UK companies about running clinical trials in China, seeking to compete with rival Chinese biotechs by tapping into its rapid drug development system.

Kenyon struck a note of caution on China’s rise in pharmaceuticals, noting that while it is quickly gaining ground in early-stage assets, the US “remains the only game in town” for late-stage drugs that reach the market. The west’s venture ecosystem, deep capital markets, regulatory expertise and commercialisation pathways, he said, are still best in class.

US companies could also benefit from what the Trump administration calls its “America First” policies, including in drug research and development. The head of the country’s Food and Drug Administration Marty Makary has previously said he did not trust the results of large-scale Phase 3 trials done in China.

But Lyons at Janus Henderson warned that the west would be wrong to shut out Chinese innovation, arguing instead for reform.

“I believe the US and Europe should focus on accelerating development pathways and streamlining regulatory processes . . . to help promising therapies reach patients faster.”

Ali Ansari, accused of financing Revolutionary Guards, owns Mallorca golf club and Frankfurt hotels via offshore companies

An Iranian tycoon under sanctions in the UK for allegedly financing the Islamic Revolutionary Guard Corps has funnelled hundreds of millions of euros into a sprawling property portfolio across mainland Europe.

Ali Ansari, whose family founded failed Iranian lender Ayandeh Bank, amassed luxury properties ranging from a golf resort in Mallorca to an Austrian ski hotel, according to corporate filings reviewed by the FT.

The UK sanctioned him after Ayandeh’s collapse in October for funding “hostile activity” by Iran’s elite Revolutionary Guards force, branding Ansari a “corrupt Iranian banker and businessman” and freezing a London property portfolio worth more than £150mn.

The FT has now identified a complex web of offshore companies, spanning from Luxembourg and St Kitts and Nevis to Austria, Germany and Spain, through which Ansari amassed a vast, previously unreported collection of properties in mainland Europe.

This takes the known value of Ansari’s total property empire in the UK and Europe to about €400mn, according to purchase prices recorded on the Land Registry and valuations listed in company accounts.

Ansari, who according to the UK’s sanctions entry holds passports from Iran, St Kitts and Nevis and Cyprus, is not under sanction in the EU. But the properties are an example of how Iranian tycoons close to the regime have scooped up lucrative assets despite extensive efforts to shut them out of western economies.

Ayandeh Bank’s collapse late last year exacerbated an economic downward spiral that culminated in protests in Iran this month in which thousands of people were killed in the worst violence since the 1979 revolution.

The EU is working on additional sanctions against the country ahead of the next meeting of the bloc’s foreign ministers at the end of the month, according to European officials.

Offshore accounts show Ansari owns the Steigenberger golf and spa resort in Camp de Mar — a 164-room luxury Mallorca hotel which offers access to one of the most challenging courses in the Mediterranean — through multiple Spanish and German holding companies, which value the resort at €22mn.

He also owns a stake in a luxury ski resort in the Austrian Alps, the Schlosshotel Kitzbühel.

Ansari owns two hotels in Germany, the Hilton Frankfurt City Centre and the Hilton Frankfurt Gravenbruch. Each is valued at about €80mn by their Dutch and German holding companies.

He also owns the Bero Oberhausen shopping centre in north-western Germany through shell companies that value the asset at €68mn. According to Luxembourg filings for one of Ansari’s holding companies, Leopard Germany Bero 1 S.à r.l., the property was purchased for €49mn.

Most of Ansari’s European properties are owned through a series of shell companies, such as Tidalwave Holdings I in Luxembourg, that pass through different European jurisdictions before shareholder records eventually lead to a St Kitts and Nevis holding company called Smart Global Limited.

UK corporate filings name Ansari as the ultimate beneficial owner of Smart Global Limited.

The FT reconstructed the portfolio after reviewing the most recent corporate filings across the jurisdictions, which range from 2024 onwards. It is possible Ansari could have liquidated some of his assets since the latest filing dates.

A subsidiary of Smart Global Limited, Isle of Man-based Birch Ventures Limited, was used to buy a £73mn portfolio of 12 derelict mansions on London’s The Bishops Avenue, nicknamed Billionaires’ Row, in 2013. Ansari purchased another mansion on the street a year later for £33.7mn.

His now-frozen London collection includes two luxury flats with servants’ quarters close to Kensington Palace that he bought for about £36mn in 2014 and 2016, and an apartment in Buxmead, a luxury gated residence on The Bishops Avenue, which he acquired for £8.1mn in 2017.

Ansari’s lawyer Roger Gherson said: “Our client strongly denies that he has ever had any financial relationship with the Islamic Revolutionary Guard in Iran.”

“It is his intention to challenge the UK government’s decision to impose sanctions on him,” Gherson added. “In these circumstances where litigation is anticipated, he has no further comment.”

The protests in Iran were triggered last month by a sharp collapse in the currency and soaring inflation before spiralling into broader demonstrations against the Islamic republic itself.

Many protesters channelled their anger towards what they say is the corruption that has allowed those with ties to the regime to prosper despite a dramatic collapse in living standards in the country.

Ayandeh, which was folded into a state-owned bank to protect its depositors, had for years been accused by politicians and analysts of channelling funds into speculative ventures and related parties.

Ansari denied wrongdoing in the wake of Ayandeh’s collapse, saying the bank was impeded by outside actors and that “the truth will eventually come out”.

Tank producer negotiating with satellite company OHB over bid for slice of country’s €35bn military space budget

Arms group Rheinmetall and satellite producer OHB are in talks to launch a joint bid to build an equivalent to Elon Musk’s Starlink internet service for the German armed forces. 

Talks over the partnership, which would give the groups a slice of Berlin’s €35bn budget for military space technology, are in the early stages, according to three people familiar with the matter.

The proposed joint venture would bid for a multibillion-euro contract to create a secure, military-grade satellite communications network in low Earth orbit (LEO) for the Bundeswehr, the German armed forces. Officials have likened the network to a military “Starlink for the Bundeswehr”. 

The discussions between Düsseldorf-based tank maker Rheinmetall and Bremen-headquartered OHB, come as European defence and space companies jostle for lucrative contracts after Berlin last year promised to pour €35bn into military space technology. The EU’s largest nation is seeking to rapidly expand its military capabilities and reduce reliance on the US.

Starlink, owned by Musk’s SpaceX group, is the world’s biggest space-based broadband provider, with more than 9,000 satellites delivering connectivity to millions of customers from LEO — a region roughly 2,000kms above the Earth.

Initially a commercial service, Starlink’s high speeds and easily transportable terminals became critical to Ukrainian defence forces after Russia’s full-blown invasion. It offered highly resilient battlefield communications when other networks were destroyed or degraded.

Starlink has since launched an LEO satellite service for defence and intelligence customers known as Starshield. But many countries, nervous of relying on Musk or the US, want to develop their own secure and sovereign networks.

Germany’s plans to pour money into the sector will make it the third-biggest spender worldwide on space technology after the US and China, according to the space consultancy Novaspace.

Armin Fleischmann, a space co-ordinator for a division of the German military, told business daily Handelsblatt last week that the Bundeswehr network would be built “over the next few years, primarily with German companies”.

He said the priority would be to focus on Nato’s eastern flank, where Germany is building up a 5,000-strong permanent brigade in Lithuania, and that “everything else will follow”.

The military had finished drawing up the specifications and procurement authorities were working on issuing a tender, he added.

Rheinmetall has traditionally made tanks, artillery and ammunition but has been expanding rapidly into other domains as Germany has boosted its defence budget. 

It won its first space contract — worth up to €2bn — at the end of last year, which will see it partner with Finnish space tech company Iceye to build satellites at a former car factory in Germany.

The companies will produce a constellation for radar reconnaissance — a technology well suited to surveillance through cloud cover, adverse weather or at night.

The proposed venture with Rheinmetall comes as OHB, which has supplied satellites for the EU’s Galileo navigation constellation, faces a competitive challenge from a potential merger of the space divisions of Airbus, Thales and Leonardo.

OHB chief executive Marco Fuchs has warned that the combination, which would bring Europe’s two biggest satellite manufacturers into a single entity, could be anti-competitive. 

As Europe’s third biggest satellite manufacturer, OHB could struggle to compete on its own, but Germany’s desire for a new network could present an opportunity to expand its range of small- to medium-sized satellites.

The company, which has supplied radar reconnaissance satellites to the German armed forces, is seeking to expand its military business. Last week it lifted earnings and turnover forecasts for this year and next, in part thanks to expectations of a boom in military space spending.

OHB and the defence ministry and defence procurement agency declined to comment. Rheinmetall did not respond to a request for comment. 

IN PERSON

Debt and disruption: South East Water’s creaking infrastructure and finances

Under-fire utility paid almost as much in interest and dividends as it invested in network over past 15 years

South East Water, the utility hit by weeks of outages that left tens of thousands of customers without water, has paid almost as much in interest and dividends in the past 15 years as it has invested in its infrastructure.

The water monopoly, which serves about 2.2mn customers, paid out more than £1.3bn in interest and dividends between 2011 and 2025, according to research by Adam Leaver, an accountancy professor at the University of Sheffield.

The payments by South East’s operating company, comprising interest of £947mn and dividends of £401mn, were almost as large as the company’s £1.5bn in capital expenditure over the same period, a figure that includes investment in pipe networks and storage capacity.

South East’s operating company — the entity regulated by Ofwat — is saddled with £1.3bn of debt, more than four times its annual revenue.

“For years debt has been too high,” said Leaver. “With such large borrowings to service they are going to struggle to make the investments required . . . and they’re going to struggle to raise more debt because they are already geared to the hilt.”

The assessment comes after about 30,000 South East customers were hit by water outages over the past six weeks, with some left without supply for a fortnight before Christmas and affected again for much of last week.

The outages have added to pressure on the company, which blamed the latest disruption on burst pipes after stormy weather.

The University of Sheffield analysis comes amid questions about the financial sustainability of South East’s business, which operates in Kent, Sussex, Surrey and Berkshire, as well as those of other struggling UK water utilities.

The industry has suffered from years of under-investment while paying out dividends and interest to shareholders and lenders. Meanwhile, regulator-imposed price caps have limited the amount by which utilities can raise bills to fund infrastructure improvements and investor payouts.

South East said: “Interest payments are a normal cost of doing business, and debt is an efficient and standard component of corporate structures.”

It said no dividends had left its holding company HDF (UK) Holdings since 2018-19 and that its interest costs were “not disproportionate to the rest of the sector”. The company said it did not agree that it was “geared to the hilt” and that its leverage was in line with the rest of the industry.

It added that including a £136mn special dividend from 2020 in the University of Sheffield analysis was “misleading” as this was a “technical accounting measure approved by Ofwat to simplify group financing, not a cash payout to shareholders”.

Excluding that £136mn dividend, the company has paid more than £1.2bn in dividends and interest in the past 15 years.

South East is on Ofwat’s watch list of financially stressed companies and the regulator last year banned the company from paying dividends. Auditors at PwC warned in South East’s accounts for the year to March 2025 that uncertainty surrounded the group’s ability to continue as a going concern.

The company’s accounts show it made an operating profit of £54.5mn for the year to the end of March 2025 but fell to a pre-tax loss of £19.8mn after accounting for debt-servicing costs. Meanwhile, interest of more than 10 per cent is being charged on some shareholder loans to its holding company.

Leaver said the “company is in severe financial trouble and it is unclear how the issues will be resolved”. 

South East said it had adequate liquidity, maintained investment-grade credit ratings and did not recognise the assertion that “it is in severe financial trouble”.

The group is owned, through its holding company, by the Utilities Trust of Australia, which has a 50 per cent share, Canadian financial group Desjardins, with 25 per cent, and the NatWest Group Pension Fund, with 25 per cent. 

The regulated company has since December 2024 received £275mn in funding from new equity injections. This has been used to reduce gearing — a measure of debt to equity — by repaying a variable-rate loan and a revolving credit facility.

Since then, it has organised a £150mn revolving credit facility and £30mn term loan.

South East said the new financing arrangements meant the going concern warning had been “formally lifted” in its interim report for the six months to September 2025.

In a letter to the Competition and Markets Authority in June, seen by the FT, South East’s shareholders said their equity injection was driven by the need to protect their existing investment and to prevent corporate collapse but should not be seen as an indication that the company was “financeable”.

“If we did not already have significant investments in South East Water, we would not allocate capital to the water sector (including South East Water) at this time,” they said.

The push came as part of an appeal to the CMA to approve a further increase in bills on top of a 38 per cent rise approved by Ofwat, which would take the average customer bill to £339 annually after inflation by 2030. The CMA has provisionally approved an additional increase but a final decision is due in March.

South East said the CMA’s provisional decision “significantly improves the investability” of its business plan, “validating the concerns raised” in the letter.

Hugo Llewelyn, chief executive of social infrastructure fund manager Newcore Capital, said the crisis at South East stemmed from financially unsustainable practices “the sorts of which shouldn’t be allowed in the ownership of societally critical infrastructure”.

South East said it disagreed.

South East is the subject of two investigations by Ofwat over customer service and a failure to maintain adequate water supplies. 

Any finding that it has breached its licence conditions could result in a fine of up to 10 per cent of annual turnover — a penalty of about £28mn based on its most recent accounts. Emma Reynolds, environment secretary, has called on Ofwat to consider whether the company should lose its operating licence.

South East’s debt has increased over more than two decades since it was bought by Macquarie in 2003. Its debt rose more than fourfold to £458mn under the Australian infrastructure group’s ownership before it was sold to investors including Utilities Trust of Australia in 2006.

Macquarie also held stakes in Thames Water between 2006 and 2017, during which time the utility’s debt rose from £3.4bn to £10.8bn, contributing to its current precarious financial position. Macquarie, which now owns Southern Water, declined to comment.

South East said its capital expenditure “is constrained by the allowances set by Ofwat at each regulatory review”, adding that it had requested a significant increase for the upcoming review period “to further shore up infrastructure resilience”.

It said it expected funding for future improvements would be available provided the outcome of the next regulatory review “is sufficiently attractive to investors”.

The owners did not comment on the University of Sheffield assessment, but Utilities Trust of Australia, NatWest Group Pension Fund and Desjardins said they were in contact with South East’s board to ensure service issues were resolved.