Geopolitical uncertainty contributed to a subdued initial public offering (IPO) market in London last year, as listings fell 56 per cent year-on-year.
In what was the capital’s quietest year for a decade, just 35 companies floated raising £5.9bn, down from 79 listings raising £9.5bn in 2018.
The number of admissions to London’s junior Aim market also fell, from 35 in 2018 to 11 in 2019.
The largest London floats in 2019 by funds raised were both private equity backed, with Warburg Pincus and General Atlantic-owned Network International raising £1.2bn, and KKR-backed Trainline.com raising £1.1bn.
Scott McCubbin, from accountancy firm EY which crunched the numbers, said that despite volatility: “IPOs remain an exit route for private equity. Fifty three per cent of all IPO proceeds raised in London were from private equity backed companies, compared to a global average of 29 per cent,” he said.
Gareth Jones, partner at law firm Pinsent Masons, said that the overall fall in IPOs in 2019 was part of an ongoing trend, but Brexit and the US-China trade battle did little to quell investors’ nerves.
Looking at the year ahead, McCubbin was cautious: “Markets are expected to become more volatile leading up to the US Presidential elections in the second half of 2020,” he said.
Jones said that in the aftermath of the General Election, there was more optimism around the UK market.
“It may take a while before the market gets going again but people seem more positive,” he said.
The UK market’s lacklustre performance last year mirrored global trends. IPOs registered globally fell 10 per cent to 1,127 in 2019, with proceeds of $202bn (£155bn), a two per cent decrease.
Despite the blockbuster Saudi Aramco float, which raised $25.6bn in the fourth quarter, it was a disappointing year for IPOs globally. Tech unicorns Uber and Lyft both broke below their IPO prices, while office sharing firm Wework shelved its plans.
This week, smart-meter group Calisen announced its intention to float on the London Stock Exchange. The company, also backed by KKR, is targeting a valuation in excess of £1.3bn.