At the heart of the listing drought is a cultural lack of risk appetite
Another day, another complaint?
It can feel that way when you regularly study the utterings of London-listed bosses. Yesterday, though, came a less common refrain: from Andrew Carnie, whose Soho House is, ironically enough, listed on the other side of the pond.
His premise – that the state of the markets and disclosure requirements made it more appealing to be a private company than a public one right now – is heard over breakfast here, too.
Look at the reasons for being publicly listed, and having to air your laundry (clean or otherwise) in the full glare of investors and analysts: really, it comes down to the ability to raise capital quickly.
There are other benefits; a stamp of approval of sorts, and the academic arguments around improving governance as a result of the market’s scrutiny.
But really, it’s the liquidity – it’s always about the liquidity. And liquidity, right now, is in short supply.
The reasons for this are myriad and have been well discussed in these pages, and in the pages of seemingly endless government-backed reviews which – through no fault of their authors, like Mark Austin and Rachel Kent – have gone nowhere.
What to do about it?
First, we have to at least hope something can be done, and that capital hasn’t just exited the London market for good.
Second, we have to hope that a new government of whatever colour gives the Treasury and the regulator the scope to get a shift on with the oven-ready recommendations already out there to revitalise the public markets and make listing on, and investing in, them more appealing.
Third is perhaps the most challenging, however, which is changing the risk appetite of the capital’s investors. For regulatory and cultural reasons alike, safety is all too regularly the word of the day.
Perhaps it is still the legacy of the global financial crisis, when bankers were dragged over hot coals for the crime of trying to keep afloat an economy built on the public’s desire to own homes they couldn’t afford; goodness knows, nobody wants to take risks after that.