The Debate: As Foxtons prepares to float, is London now set for an upswing in initial public offerings?

YES

We’re cautiously optimistic about initial public offering (IPO) activity, and London looks likely to lead this upswing. Firstly, we’re seeing a variety of stronger macroeconomic data, including a housing pick-up, falls to unemployment, and increasing growth rates. Naturally, this has been led by the US, but followed by hesitant stabilisation in Europe. Corporate clients that had postponed strategic initiatives, and fund clients that paused their exit plans while waiting for better times, are now dusting off IPO plans for the autumn. Secondly, as our funds practice can attest, the buy-side community is expressing renewed confidence in growth prospects, and hence interest in equity investments. London’s equity and capital markets advisory community has put significant effort into addressing the key factors driving London’s IPO market, putting it in a strong position. Julian Perlmutter is a US securities partner in the corporate group at Simmons & Simmons.


No

We have certainly seen a much more active market this year compared to the recent past, with initial public offerings (IPO) up both in terms of numbers and money raised. But volumes are still well below the peak of a few years ago, reflecting a degree of caution among companies considering coming to the market. An IPO is an expensive and time-consuming process, and companies want to be as sure as possible of success before they embark on it. In particular, debates about valuations continue. Although there seems to be more consensus between the sellers and investors, this truce could easily be shattered if the markets become more volatile. The majority of the IPOs this year have performed well following their debut, but we have also seen some disappointments. This underlines the importance of being well prepared and ensuring the company is ready for the very public scrutiny that comes with going public. Linda Main is partner and head of the UK capital markets group at KPMG.