Exclusive: 2026 Could Be a Record-Breaking Year for IPOs: Marcum Asia Co-Cha...

By Harry Wu, 21st Century Business Herald, SFC

“Hong Kong completely outperformed expectations, beating Nasdaq at the top of the league tables due to robust policy support and the return of global investors to Chinese issues,” said Drew Bernstein, Co-Founder and Co-Chairman at Marcum Asia CPAs LLP in an exclusive interview with SFC.

He found several factors aligned: investor attention shifted toward China as a technology superpower, with the "DeepSeek moment" proving the innovation gap with America is past. Additionally, the government's focus on global expansion requires companies to have access to foreign currency and overseas acquisitions, which Hong Kong provides while minimizing geopolitical risk. Finally, the Hong Kong Stock Exchange modernized listing procedures for sectors like AI and life science.

Looking forward to the global IPO market in 2026, Drew Bernstein said the positive scenario involves a stable U.S. economy, gradual Fed easing, a constrained Trump Administration regarding tariffs, and healthy tech rivalry between peers. Combined with mega private companies ready to go public, 2026 could be a “record-breaking year”.

SFC: The global market experienced significant fluctuations under the impact of tariffs in 2025, but ultimately still performed well. How do you view the performance of major markets such as China and the United States in 2025? What impressed you deeply?

Drew Bernstein: Entering 2025, most people expected a blockbuster year for U.S. IPOs and a decent year for Hong Kong, China. U.S. deals ended strong with 203 IPOs raising $44.1 billion, nearly a 50% increase over the prior year, despite volatility from an unpredictable tariff environment. Hong Kong completely outperformed expectations, beating Nasdaq at the top of the league tables due to robust policy support and the return of global investors to Chinese issues. China shifted from "uninvestable" to "unavoidable," and the Hong Kong market ended a three-year slump, regaining the top spot globally.

SFC: The Hong Kong IPO market recovered in 2025, ending a three-year slump and regaining the top spot in global IPO fundraising. What specific factors do you believe have collectively contributed to the strong rebound of the Hong Kong market in 2025? What opportunities does the connection between Hong Kong and the Chinese mainland provide?

Drew Bernstein: Several factors aligned: investor attention shifted toward China as a technology superpower, with the "DeepSeek moment" proving the innovation gap with America is past. Additionally, the government's focus on global expansion requires companies to have access to foreign currency and overseas acquisitions, which Hong Kong provides while minimizing geopolitical risk. Finally, the Hong Kong Stock Exchange modernized listing procedures for sectors like AI and life science.

SFC: The robust rebound of Hong Kong's IPO market in 2025 has attracted a large number of well-known institutions to serve as cornerstone investors. Why are globally renowned institutions vying to become cornerstone investors in Hong Kong IPOs?

Drew Bernstein: Institutions allocate capital to IPOs when they see an opportunity to outperform overall equity markets. Last year, Hong Kong IPOs averaged a 37% first-day return, strongly outperforming the Hang Seng index. In contrast, U.S. IPOs returned 15%, which was slightly less than simply owning the S&P 500. As long as this outperformance persists, Hong Kong IPOs will remain a hot trade.

SFC: Hong Kong is often referred to as the “Super Connector” linking the Chinese mainland to the world. How does Hong Kong’s role need to evolve in the face of a new international landscape? For instance, what unique advantages does Hong Kong possess in attracting listings from companies in the “Global South”, such as Southeast Asia and the Middle East?

Drew Bernstein: Hong Kong has reinvented itself to focus on advanced manufacturing and technology as China's economic gravity shifts. The government has also facilitated "second IPOs" for companies like CATL already listed on the A-share market to help them accelerate overseas expansion. However, it remains uncertain if Hong Kong can attract significant listings from the Global South, as regions like the Middle East have local exchange aspirations and face cultural or language barriers.

SFC: As China enters the 15th Five-Year Plan period, strategic emerging industries such as artificial intelligence and new energy are expected to play a more significant role. How do you view the structural opportunities in the Chinese market in 2026? What unique appeal does the Chinese market have for technology companies seeking domestic listings?

Drew Bernstein: Focus industries mentioned in the Recommendations of the 15th Five-Year Plan align closely with high-profile Hong Kong IPOs. Several Chinese AI companies went public before U.S. rivals like OpenAI, Landspace may go public in Shanghai before SpaceX, and BrainCo recently filed to go public well ahead of its U.S. competitor. We will see if accessing public markets first provides a decisive strategic advantage.

SFC: Apart from China, what role will other emerging markets in the Asia Pacific region such as Southeast Asia and India play in the global IPO landscape in 2026? Will they develop a complementary or competitive relationship with China?

Drew Bernstein: India had a record 367 listings in 2025 and offers high valuations, attracting international companies to list Indian subsidiaries. While Southeast Asian IPO numbers increased, regional exchanges haven't yet shown the capacity for large-scale deals.

SFC: U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins stated that the agency will roll out a series of proposals beginning in January 2026 to encourage more firms to go public, including curbing “frivolous” shareholder lawsuits, adjusting corporate governance requirements, helping smaller companies attract investors and specific measures of “innovation exemptions” for digital asset companies. How do you view the capital market new rules that encourage more companies to go public? What are their functions?

Drew Bernstein: U.S. securities law suffers from "disclosure creep", creating long, repetitive documents that even institutional investors rarely read. If Chairman Atkins can streamline requirements for small and mid-sized companies, it would be beneficial, though it is a herculean task.

SFC: What new industry or scale characteristics did emerge among Chinese companies seeking listing in the U.S. in 2025? How did issuers and investors gradually adapt to and absorb geopolitical risks in 2025?

Drew Bernstein: Two strategies are emerging: the "China home base" strategy where innovation stays centered in China, favoring Hong Kong listings to avoid geopolitical conflict. The second is "China MNCs," with major revenue drivers overseas. These companies seek global brands and international leadership, likely maintaining headquarters outside China and aspiring for U.S. listings.

SFC: How does the intense technology race impact IPO activities in key areas of technological competition, such as artificial intelligence, semiconductors and new energy? How does the capital market evaluate the technological capabilities and geopolitical risks of these companies?

Drew Bernstein: In the past, Chinese innovators went public in the U.S. first to attract financing. Today, companies in sensitive sectors like AI or semiconductors are unlikely to list in the U.S., creating an opportunity for Hong Kong.

SFC: In 2025, the discussion about whether there is a bubble in AI was intense. What is your view? How will the AI craze evolve in 2026? Which areas will have more opportunities?

Drew Bernstein: AI is a transformational technology with a faster adoption curve than the internet or railroads. However, there is a gap between initial fever and generating meaningful value. It is not a winner-take-all race but an exploration of a new continent where some will strike gold and others will not.

SFC: Looking ahead to 2026, what do you believe will be the most critical variable driving the global IPO market sentiment? Will it be the direction of the AI boom, the U.S. Federal Reserve's policy, growth prospects in major economies, the evolution of geopolitical events, or other factors?

Drew Bernstein: The positive scenario involves a stable U.S. economy, gradual Fed easing, a constrained Trump Administration regarding tariffs, and healthy tech rivalry between peers. Combined with mega private companies ready to go public, 2026 could be a record-breaking year.

SFC: You have emphasized that newly listed companies will to the greatest extent originate from the Asia Pacific in the next decade. What do you believe are the underlying factors driving this trend?

Drew Bernstein: Asia Pacific accounted for 7 of the top 10 IPOs in 2025, and half of the new listings on Nasdaq and NYSE were Asian companies. IPOs represent how people view the future, and Asia Pacific has an abundance of hunger for change and openness to risk.