What Is Equity Capital Markets (ECM)?

Equity Capital Markets (ECM) is the team / group that is responsible for providing advice on equity, equity-linked and equity derived products, including shares, futures, swaps and options.

An ECM group will work closely with a client to organize transactions, structure the equity offering, and to improve valuation.

Define Equity Capital Markets Work

Some activities that an ECM group will advise on are:

  • Marketing
  • Distribution of new stock
  • IPOs
  • Roadshows
  • Equity private placements

What is an IPO?

An IPO is an initial public offering, in which the equity capital markets team helps a company issue shares to the public market to invest in on public exchanges.

What is a Private Placement?

A private placement is when a ECM team helps a company issue equity (not traded on an exchange) to a buyer or helps an existing investor sell shares to another private entity.

What is a Roadshow?

A roadshow is when bankers take the company looking to issue equity (or other financial instrument) around to potential large-scale investors such as hedge funds and pension funds. Together the bankers and the company management team pitch the new issue to potential investors.

ECM vs DCM

equity capital markets

To learn more about this concept and become a master at valuation modeling, you should check out our Valuation Modeling Course. Learn more here.

Module 1: Introduction

Module 2: Valuation: The Big Picture

Module 3: Enterprise Value & Equity Value Practice

Module 4: Trading Comparables Introduction

Module 5: Trading Comps: The Setup

Module 6: Trading Comps: Spreading Nike (NKE)

Module 7: Trading Comps: Spreading Adidas (ADS.DE)

Module 8: Trading Comps: Spreading Lululemon (LULU)

Module 9: Trading Comps: Spreading Under Armour (UA)

Module 10: Trading Comps: Benchmarking and Outputs

Module 11: Precedent Transactions: Introduction

Module 12: Precedents: The Setup

Module 13: Spreading Tiffany & LVMH

Module 14: Spreading FitBit & Google

Module 15: Spreading Reebok & Adidas

Module 16: Spreading Jimmy Choo & Michael Kors

Module 17: Spreading Dickies & VF

Module 18: Valuation Wrap-Up

Module 19: Bonus: Non-GAAP Practice

Learn More Here

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