Bruce Aust, NASDAQ’s newly-named vice chairman, was, until recently, in charge of the exchange’s new listings and capital market business as well as global business development and relationship management with the 3,300 companies listed on NASDAQ OMX Group’s 16 listing markets.
During his tenure the exchange attracted some of the highest-profile tech IPOs, including Google and Facebook. Tech IPOs on NASDAQ in 2014 included Weibo, China’s version of Twitter, which raised $285 million in its April initial public offering, and the UK’s Markit, which specializes in collecting and disseminating financial data, which raised $1.28 billion.
IPOs planned for November include Fibrogen, a San Francisco-based biopharmaceutical company, and Upland Software, an Austin, Texas company specializing in cloud-based enterprise work management software. Aust, a speaker at NOAH, an annual Internet conference in London, recently discussed the outlook for IPOs with Informilo’s Jennifer L. Schenker.
Has this been a good year for IPOs?
We have had the largest number of IPOs since 2000. We have had 160 in the year to date compared with 126 last year and I am pretty confident that we will have 200 by the end of the year. It has been a very strong year for biotech. Biotech IPOs are up 60% over last year; we have had about 70 of them. It has been a good year for tech companies as well.
There is a lot of diversity. This year four companies from the UK went public on NASDAQ, as well as companies from Israel and large ones from China such as Weibo. This shows there is still a robust market for raising capital.
What has fueled the surge in IPOs over the last 18 months?
As long as interest rates are at an all-time low investors will seek opportunities to get better returns. All signs show low interest rates will continue so that bodes well for IPOs in general.
But hasn’t the recent market volatility impacted the IPO pipeline?
In the U.S. extreme volatility caused people to take a pause but it was a short-term pause. The companies scheduled to go public in the fourth quarter are still on schedule to go public. Expect a run-up right before and right after Thanksgiving. On the exchanges that we own and operate in the Nordics 15 companies have gone public this year and there are some in the pipeline for the later part of the year. Things are slowing down a bit due to the slowdown in the European economy but hopefully things will be back on track in 2015.
What are you doing to combat competition from the London Stock Exchange and EnterNext?
The London Stock Exchange is aggressively courting late-stage European and Israeli tech companies. Over a half a dozen foreign companies have been accepted on to the Future Fifty growth companies in a UK government program because the government wants to attract more companies to base operations in the UK and/or go public there. And, EnterNext plans to announce initiatives at its first ever pan-European tech conference later this month.
Other exchanges are realizing that growth is going to be in tech but NASDAQ has a history of being the dominant player in tech.
You were recently promoted to Vice Chairman at NASDAQ. How will your role change?
I will have been at NASDAQ 16 years this month. I have worked very closely with the listing businesses for 16 years and I will still very much be involved with listings. Nelson Griggs, who has worked for me for 20 years — at Fidelity and then at NASDAQ — will be taking over the listing business. I will continue to have relationships with CEOs around the world. After 11 years in New York I am moving back to San Francisco.
Why San Francisco?
We have a large client base there, which includes Apple, Google and Facebook. We are working closely with those companies and a couple of weeks ago we announced the NASDAQ Entrepreneurial Center, which is set to open in 2015. Our CEO, Robert Greifeld, and I are very committed to making sure that NASDAQ plays a role in educating the next generation of entrepreneurs. The goal is to create a place where they can learn how to write a business plan, how to raise seed capital and anything that they need to learn about being an entrepreneur. We have had a lot of feedback from founders who would love to get involved and educate the next generation of entrepreneurs.
Is this part of a larger strategy, along with the launch of NASDAQ Private Markets and ExactEquity to engage with tech companies at a much earlier stage?
Today on average companies are staying private for eight to ten years and we are seeing in the pipeline companies with greater than a billion-dollar market cap. This is a different phenomenon than we had seen previously. This is why we launched NASDAQ Private Market, so these companies can have liquidity programs which will allow them to retain their employees and buy a car or a house without going public but at the same time maintain control. This means helping start-ups manage their share registry and ExactEquity allows us to do that.
What is the outlook for 2015?
It’s going to be a busy year.