London IPO fundraising slumps to 30 year low
IPO fundraising has slumped to a 30-year low in London in the latest warning sign on the health of the UK’s capital markets.
Just £160m was raised from five listings on the London markets in the first six months of the year, the lowest-first half since 1995, according to data from Dealogic shared with the Financial Times.
The lacklustre IPO activity comes as a growing number of firms mull switching their primary listing from London to New York. Last month, fintech firm Wise made the move, while earlier this week it emerged that pharma giant Astrazeneca is weighing following suit.
A host of firms have also delisted from the London Stock Exchange after being acquired by US private equity, including precision instruments business Spectris, which this week agreed to a £4.7bn offer from New York-based KKR.
Jonathan Parry, a partner in the White & Case Capital Markets group, said: “The recent muted IPO activity has been a global phenomenon impacted by geopolitical factors and macroeconomic volatility.
“The funding solutions now available in the private markets have also meant that companies can choose to stay private for longer.”
IPO turnaround hopes for London
Parry said he hoped the London market was on the cusp of a turning point, given the recent IPO announcements by tech firm Visma and Greek company Metlen Energy & Metals.
“The concerted efforts of the LSE and FCA to reform the regulatory framework in London through new listing rules and a series of other regulatory changes are starting to generate meaningful momentum,” he said.
“As a result of these reforms, the London market is now on a level regulatory playing field with other leading listing venues and may be approaching an inflection point that we hope will kickstart a new IPO cycle.
“Before the recent bout of market turbulence in Q2, we had already started to see a growing IPO pipeline which will hopefully resume if the recent volatility subsides and investor confidence returns.
“This would mark a much-needed boost for the City and be a helpful reminder that London remains both Europe’s preeminent financial centre and its largest listing venue.”