Wall Street broker Clear Street targets up to $11.8 billion valuation in US IPO

By Arasu Kannagi Basil

Feb 4 (Reuters) - Clear Street is targeting a valuation of as much as $11.8 billion in its U.S. initial public offering, the securities and derivatives broker said on Wednesday, as the IPO market kicks into high gear.

Equity markets at record highs and pent-up demand for new listings have sparked a flurry of activity in early 2026, with eight companies set to raise at least $100 million each in their New York debut this week.

It will be the busiest week for sizable offerings since 2021, according to IPO-focused research and ETFs provider Renaissance Capital, as the IPO market picks up pace after last year's historic U.S. government shutdown disrupted deal flow.

Clear Street, led by former Cboe CEO Ed Tilly, is looking to raise up to $1.05 billion by offering 23.8 million shares priced between $40 and $44 apiece.

"It's bold of them to move ahead after the past week's selloff, but generally, this is a space that investors know and like," said Matt Kennedy, senior ‍strategist at Renaissance Capital.

"While the current volatility might scare off some IPO investors, it's worth keeping in mind that companies like this can benefit operationally from volatile markets and heightened trading activity."

Founded in 2018 as a prime brokerage platform, the New York-based company has broadened its business, entering areas such as investment banking and equity research.

BlackRock BLK.N, the world's largest asset manager, is anchoring the IPO and has indicated interest in purchasing up to $200 million worth of Clear Street shares.

PRIME BROKERAGE BOOM

Prime brokerage plays a vital role in the financial market plumbing by providing hedge funds with services to manage risk, monitor their portfolios, and grow their businesses.

Wall Street's multibillion-dollar prime brokerage business boomed last year as the world's largest multi-strategy hedge funds navigated market volatility to produce robust returns.

Surging valuations of companies and the growing number of new hedge funds in recent years have benefited the prime brokerage business, which includes lending cash and securities to help execute large trades.

An IPO would come after a banner year for Clear Street. The company expects net revenue between $1.04 billion and $1.06 billion in 2025, compared with $463.6 million a year ago.

"Given the growth and margins, this will no doubt command a premium valuation multiple, so the only question is by how much," Kennedy said.

Clear Street will list on the Nasdaq under the symbol "CLRS". Goldman Sachs, BofA Securities, Morgan Stanley, UBS Investment Bank and Clear Street are the lead book-running managers.