Money Life with Chuck Jaffe: IPOX® CEO Josef Schuster on the State of the IPO Market
In this conversation with Chuck Jaffe on the Money Life podcast (August 13, 2025), Josef Schuster, CEO and Founder of IPOX® Schuster, offers expert insights into the current state of the IPO market, its broader implications, and the performance of IPO-linked investment strategies. Link to full Episode
Schuster discusses the revival of IPO activity, highlighting how recent vintages from 2022 and 2023 are fueling renewed risk appetite in the markets. He provides an in-depth look at the innovative IPOX® High Dividend Strategy, which blends dividend income with post-IPO growth potential, an approach that challenges traditional assumptions about IPO investing.
The interview covers high-profile deals such as Bullish and Miami International Holdings, the evolving role of SPACs, and the increasing convergence between public and private market performance. Schuster also outlines IPOX®’s distinctive long-term perspective on post-IPO performance, emphasizing the competitive advantages of public-market exposure through IPOX®-linked ETFs like FPX.
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Full Transcript:
Chuck Jaffe: We start today's show with the other interview. The big interview will be coming, but this is the other interview, just as big, just doesn't get the same title. And I'm very pleased to say that returning to the show right now, Josef Schuster. He is chief executive officer for IPOX Schuster, ipox.com. He's basically the leading expert on IPOs.
There are plenty of ETFs linked to the IPOX 100. The First Trust U.S. Equity Opportunities ETF, FPX. FPXI is the international version, FPXE is the European version, billions of dollars of assets. And of course, everybody's interested in IPOs because, well, they say something for what's happening to the market and more. But if you want to learn about not only initial public offerings, but about the indexes and more, ipox.com. Josef Schuster, welcome back to Money Life.
Josef Schuster: Thank you for having me, Chuck.
Chuck Jaffe: So let's start with a take on the IPO market because we know what's been happening with the stock market. The stock market has climbed the wall of worry, has shrugged off the concerns for the most part about the tariff tantrum, and seems to be shrugging off a lot of the stuff with inflation. But the IPO market, it's kind of its own beast. So start with the general take on IPOs and where they've been this year.
Josef Schuster: The IPO market has been back over a year now. I think new issuing activities picking up. Companies come from all over. And really the story behind why the IPOs are coming back is really the strong performance of IPOs over the last three to four years now. If you look at it, those vintages of 2022, 2023, these companies are driving the risk appetite now. And so that's also driving the whole market up, what we believe. So the IPO market is a very interesting kind of forward-looking indicator, and it looks bullish from here on, even.
Chuck Jaffe: It's also a market that's been changing. And I should point out that you guys look at a number of different things, IPOs, of course, initial public offerings, but you're also looking at spinoffs and direct listings. But one of the things I was interested in as I prepared for this interview is I know that you guys have now got the IPOX High Dividend Strategy. And people don't think of IPOs as like, wait, I can use an IPO and generate income at the same time. Is that because of the way the IPO market has been changing? Is that like, what is driving something that really I think most people would be surprised to learn that yes, if I want to play in IPOs, I'm not just buying those companies that are hell-bent for growth and not paying dividends.
Josef Schuster: So yeah, we launched the IPOX High Dividend Strategy a year ago. It's, basically the goal is it's yielding six and a half to seven percent. But we find that in the cross section, there are a number of very interesting IPOs, more value deals which go public in the REIT space, BDCs, and so forth. There seems to be some mispricing when they go public. And once this mispricing actually works itself into the market over time, over the first like one, two to three years, companies have an interesting, develop an interesting growth tilt and they pay a significant dividend as well. Now, the product is a global portfolio, so it has around 50% in global names, like outside the U.S., and the remainder is U.S. names and Canada. But what we believe, it's a really interesting addition to an FPX and IPOX 100 linked product, whereby the investor seeks pure growth. And here is the IPOX High Dividend, he actually gets a six and a half to seven percent annual distribution and some interesting growth opportunities. Now, the companies we track in the IPOX High Dividend are, for example, the spinoffs from the Nordic region, very interesting ones which went public over the last three, four, or five years. Then we have European exposure, some Chinese exposure, Australian infrastructure names have been really interesting. These companies which do go public, they have some inefficiency in the initial kind of pricing. And what we find in ourselves as a group are really interesting to be held as a portfolio in addition to REITs which would go public in the U.S. like MRP Properties, some spinoffs, AHR for example, or even Canadian deals, like there's been really very interesting deals out of Canada, spinoffs, for example, South Bow, very good product, company yields 7%, and so obviously, if you look at SOBO US, great price appreciation as well. So there's an opportunity there in the cross section which is very scalable and which is a size of between two and three billion dollars we can build a fund on.
Chuck Jaffe: In terms of what we've been seeing, I mean, one of the areas that everybody's been interested in and watching has been crypto. And I mentioned there are a couple of things coming this week. One of them is Bullish, which is going to be ticker symbol BLSH. That is a crypto platform that has ties to Peter Thiel. When you saw, how do you size up an IPO like that at this point?
Josef Schuster: Yeah, Bullish just follows on, I believe it's an indication how risk appetite really is changing and is coming into the market. Originally wanted to go public as a SPAC, I believe years ago. Now they've changed it into an IPO, kind of higher quality deal, I guess. It's just lined itself up as another deal, high risk, high potential opportunity. It should be able to raise 8-900 million dollars to expand. Your money goes into growing the company. We'll see in three, four, or five years whether it's going to be the next Krispy Kreme Donuts or the next Facebook. But it's just one of many deals which are in the pipeline and which shows that the IPO market is back and which also shows that the preferred way of companies to extract value and and kind of to show the marketplace that it's valuable is to be on the stock market.
Chuck Jaffe: It's not the only IPO that's coming out, and it's not the only financial one. I know that one of the other IPOs this week is Miami International Holdings, that's M-I-A-X, and they're doing regulated financial marketplaces. How much demand is there for all of the financial stuff? I mean, obviously, everyone hopes that IPOs are going to have pops, but are we seeing the standard IPO pop, and is it particularly happening in the financial space?
Josef Schuster: There's pop in the IPO market right now. It's around 26% on average that's how much companies pop these days. The thing is that obviously these numbers are highly skewed towards like a few companies which just popped a lot, like Figma or Circle. Yeah, the median pop is actually only 5%, so it's much lower. We expect, obviously, there's a correlation between where the proceeds go, as it's a private equity versus venture capital-backed deals in terms of the size of this initial pop. As for the Miami International Stock Exchange, proceeds go to pay down the debt to restructure, but also to growth. So I think it will be well received. There's a lot of risk capital outside. There are a lot of momentum traders who play the initial syndicate games. They do this all over and all over again. They participate, they sell out, and they participate. A lot of this kind of positive feedback momentum strategies. And obviously, the company should benefit from it. Fundamentally, I think Miami International Stock Exchange is interesting because they actually operate both markets under CFTC and SEC regulation with an international arm as well, which, for example, the CME Group doesn't do, or like, and Nasdaq doesn't do. They are like really separate under SEC or CFTC regulation. So it will be interesting. I mean, it will be, obviously, some of the proceeds will be earmarked to drive certain growth projects, like probably launching the Bloomberg futures on MIAX or so. And say they invest in projects, at the end of the day, probably only one out of 20 of these projects is going to survive, and hopefully, it's going to be a big winner. And then this one big winner is going to really potentially propel the company and build expectations. And again, like these expectations for pricing are built on these potential opportunities the company is going to seek with the money they're getting from the IPO.
Chuck Jaffe: Earlier in this conversation, when we were talking about Bullish, you mentioned that at one point they wanted to be a SPAC. The SPAC market, special purpose acquisition corps, and functionally for those who are in the audience, when they get involved in a deal, technically it's a de-SPAC because you're taking the SPAC and it's taken away by the company that it acquires and what have you. But it's kind of a reverse way to go public. They're not a classic IPO. They got very popular, then they got very criticized, then they cooled off. There seems to have been some pickup on them again. But where are we in the SPAC market at this point?
Josef Schuster: Yes, SPACs have been coming back with a vengeance. And year to date, we have had 146 IPOs and we had 86 SPACs raising 16 billion. SPACs are here to stay as a way of companies to go public, probably lower quality companies initially to go public. And it has been fascinating to see. I mean, even we look at the media, they talk about Roco, they talk about SoFi, MP Materials, Him & Hers, Joby, these companies are basically SPACs and they are developing, have developed tremendously in the third to fourth year after they consummated on the SPAC. And obviously, these big winners in some of these companies, they keep SPACs going public again to consummate again, just like with IPOs. So it's fascinating to see, and that the SPAC structure is here to stay in our opinion, and it's probably only going to get bigger down the road.
Chuck Jaffe: There has been a tremendous amount of activity and interest when it comes to private equity, and companies are certainly waiting longer to go public, if they do at all. We've also now seen things where they're going to make it easier to put things like private equity into retirement plans and what have you. When you consider the IPO market and those kinds of interests in the industry and also the legislation, do you worry at all? I mean, there are fewer public companies now than there were a while back, and for all of the interest in going public, plenty of companies are staying private. How much of an impact is all of that having on the IPO market?
Josef Schuster: On average, we believe it only has an insignificant impact. It still, year to date, we have another 146 companies so far going public in the U.S. It's obviously the emergence of the pre-IPO market, private equity, venture capital, and all this dynamic there. What we can say is from a performance perspective, and has been really interesting to observe with our ETF, which is tied to our IPOX 100 index, we are up 30% year to date. We are up 60% year over year. We are able actually to beat the returns of private equity, venture capital with just a very simple post-IPO investment strategy. And I think that has been really interesting to observe that the correlation between pre-IPO and post-IPO has gone up. And post-IPO investing comes at much bigger benefits. It's much cheaper, it costs 60 basis points versus 2 and 20. You don't need a K-1, and you can get in and out every day with billions of dollars of liquidity. So while there is a lot of push towards private markets and private equity and venture capital, the real smart way what we have shown is like just to invest in this post-IPO space what we have developed. And one reason is because as AI gets better and as companies mature, both on the private side and public side, kind of the risk profile of these companies is actually starting to be the same. So why not just like use a post-IPO vehicle to track pre-IPO? And actually, it's much cheaper and has worked. And that has been a really interesting kind of development since we talked last almost a year ago.
Chuck Jaffe: Quickly, and I should have probably asked this right up front, but so that everybody understands when we're talking about IPOs, how long do you guys consider a company to be IPO or post-IPO so that it stays in the new company, it's in your universe? And again, it's not just IPOs, it can be spinoffs and SPACs and the other things. But how long is the initial period when you're talking about a company that's just come out?
Josef Schuster: Yeah, so the original idea, obviously, the market always has been, okay, IPOs should be only considered separately, very short period of time over the first few months of trading. However, we really take a long-run, buy-and-hold approach to the space because our philosophy is that this going-public effect is long-run. And the money you get is being public, really kicks in, the effects of the money which you get really kicks in over the long run. So we take around a four-year perspective to looking at IPOs, spinoffs, these SPACs, select IPO M&A really separately as a group for the first four years. And then we move companies out of the portfolio, out of consideration. We are kind of a rotational strategy which we have been running has worked well for the investor. The FPX ETF trades at an all-time high every day now, again, up 30% year to date, year over year, 60%, and over time, it actually has added 350 basis points in it over the S&P 500 since we started in 2004.
Chuck Jaffe: Yeah, well, that is one more reason why folks would be wanting to watch the IPO market. Joseph, always a pleasure to get a chance to catch up with you on these things. Thanks for taking the time. We'll talk to you again down the line.
Josef Schuster: Thank you for having me, Chuck.
Chuck Jaffe: That is Josef Schuster. He's the chief executive officer and the founder at IPOX Schuster, IPOX, IPOX. You want to know it because it's ipox.com to get more information on IPOs generally, the IPOs that are happening, and of course, all of their products. We're just getting started on the August 13th Money Life. Later, Mark Lucini from Jenny Montgomery Scott is here for the big interview, so stick around, be right back with more.
