Greetings,

The whole finance world is abuzz about the wave of IPOs set to roll out soon. But there's one group that is especially dialed in: the private equity backers looking for an exit. More on that below.

Also in this edition:

• Large M&A deals thrive, but challenges persist
• US to lower tariffs on farm, construction equipment
• Convertible bonds on track for record year
• How CFPB deregulation has helped big companies

Private equity firms are eyeing initial public offerings to clear a massive backlog of nearly 33,000 unsold portfolio investments, driving US IPO deal value in the first quarter to its strongest start since 2021. Anticipated mega-listings from high-profile companies like SpaceX, Anthropic and OpenAI have buoyed market sentiment and expectations for the remainder of 2026. However, narrow market windows, erratic conditions and mixed post-debut stock performances mean corporate sponsors must remain highly flexible regarding valuation and timing, market participants say.

Mergers and acquisitions have continued to perform well this year, driven by large deals, but challenges such as the war in Iran, shifting regulatory priorities and poor macroeconomic fundamentals could affect dealmaking, according to a WilmerHale report. Private equity and venture capital firms are under pressure to deploy capital and return funds to investors, and while artificial intelligence is a dominant market force, enthusiasm for new technologies could negatively affect some sectors.

The Consumer Financial Protection Bureau has sharply curtailed enforcement actions under acting Director Russ Vought, benefiting major corporations such as Toyota, Walmart and Apple. The CFPB in Trump's second term has ended or modified more than three dozen inquiries, settlements and lawsuits, allowing companies to avoid millions of dollars in refunds and penalties. A spokesperson for the CFPB said the agency was "weaponized" against "disfavored industries" under the Biden administration, but critics say the CFPB is now favoring large corporations at the expense of consumers.

US Federal Reserve officials have expressed skepticism that artificial intelligence will quickly solve inflation, noting that AI-driven demand for labor and equipment is more evident than productivity gains. St. Louis Fed President Alberto Musalem and San Francisco Fed President Mary Daly have warned against relying on future productivity to address current inflation, and Fed Gov. Lisa Cook has pointed out that AI investment could push prices higher.

Driven by the AI boom, US convertible bond issuance has reached a record $57 billion so far this year and is on pace to meaningfully outstrip last year's total of $120 billion. High-growth technology firms are capitalizing on soaring stock valuations and elevated market volatility to issue this low-cost debt, which frequently features very low or zero-interest coupons. Institutional investors are actively embracing these vehicles to secure upside equity options in volatile tech stocks while providing issuers with affordable, protective financing.

Bitcoin fell 3.4% to below $71,000, hitting its lowest level in weeks as the digital asset market reacted to Strategy's first publicized token sale in five years. The crypto treasury firm sold 32 bitcoins for $2.5 million to fund preferred stock distributions, driving broader negative sentiment alongside ongoing crypto ETF outflows.

The private credit market, characterized by loans to midsize companies from investment funds, is entering a new phase as the era of low interest rates and abundant liquidity ends, writes Hamza Lemssouguer. Lemssouguer says investors must adjust to an environment with higher risk and less predictable exits, noting that this shift will affect portfolio allocation and valuation across asset classes.