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UK records strongest opening quarter IPO performance in 14 years

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The apparent stand-off between REA and Rightmove could be taken as a sign that British companies are resisting foreign takeovers.
The apparent stand-off between REA and Rightmove could be taken as a sign that British companies are resisting foreign takeovers.

UK listings got off to a strong start this year, with more funds raised in the opening quarter of 2021 than in any other opening quarter since 2007.

The first quarter of 2021 also marked the most funds raised in a single quarter since 2014, according to new research from EY.

Both the main market and Alternative Investment Market (AIM) have built on the resurgence of activity seen in the second half of 2020 with 12 IPOs raising £5.2bn on the main market and eight IPOs raising £441m on the AIM.

The total funds raised during the quarter were more than half of the total £9.4bn raised in the whole of 2020.

The UK also maintained both its position as the leading listing location in Europe for fund raising and, on a global basis, remained in third place behind the US and China for funds raised via IPO.

Scott McCubbin, EY partner and UK & Ireland IPO Leader, said: “With an effective vaccine rollout underway, momentum and confidence in the UK IPO market should continue to build, but future growth may vary, depending on the sector.”

This year’s performance stands in stark contrast to the same period in 2020, when there were just three IPOs on the main market and two on AIM, which raised a combined total of £615m – nine times lower than this year’s quarter.  

Global IPO markets have had the best start to the year in more than 20 years, with more than $65bn being raised in over 300 IPOs, excluding US-focused Special Purpose Acquisition Company (Spacs) listings, which have also been extensive this quarter.

Technology sector IPOs have led the way globally, with NASDAQ being the leading global exchange, hosting 46 IPOs and raising over $18bn in the process.

EY strategy and transactions partner Helen Pratten said: “The increase in UK IPO activity, which began in the latter half of 2020, is expected to continue at pace as confidence in the post-pandemic landscape builds and the UK’s credentials as an international leader hold fast.

“There is clearly competition to IPOs from US Spacs seeking acquisition targets in the UK which could stand to affect or reshape the market here.”