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

Related Terms

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