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NASDAQ CEO Adena Friedman: "investors have a lot of cash to put to work, not a lot of asset classes they can put than money in"

NASDAQ CEO Adena Friedman explains 2020's surprising IPO boom, and why her market's been a big draw for new offerings.

Video Transcript

ADENA FRIEDMAN: Well, going into the year before the pandemic hit the world, we expected to be, to have a really strong year for IPOs, so we saw a lot of demand really building as we exited 2019. In fact, we had about 190 IPOs last year as well. So, so it was a busy year last year, and we saw that we could end up having an even busier year this year, but when the pandemic hit, we saw a massive disruption. You know, every IPO was put on pause, and we weren't sure what was going to happen.

And so in April, we actually talked to our investors and said we could see this being a much slower the year than we thought it was going to be, based on what was happening at the time, but then some IPOs started trickling out. So first, it was a health care IPO, and then it was a significant tech company, ZoomInfo, that came out, and they did really, really well. And so, as people started realizing, investors have a lot of cash to put to work. There are not a lot of other asset classes that can deliver them returns and yield because of the fact that the Fed brought down the interest rates so low.

And so then they say, well, gosh, you know, in order for us to be able to meet our investors' needs, we need to start to look at putting risk capital to work, and equities was but, you know, the best option. And then some really, really interesting companies started coming in, and it started taking off. So come by June, we started seeing a very healthy environment growing, and then, of course, you also see this year kind of the year of the SPAC. So a lot of acquisition company vehicles also choosing to tap the public markets at the same time that operating companies are.

So we are very, very pleased, because we have 80% of all operating companies going public so far this year have chosen NASDAQ. And then about 50% in the third quarter of the SPACs have come to NASDAQ as well. So we've had a very, very robust year so far in IPOs.