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.

    Related Terms

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