London Loses ‘Goliath’ Status as IPO Funding Hits 30-Year Low

Initial public offerings (IPO) funding in the London market has reportedly reached a 30-year low.

The five listings on the British market in the first half of the year took in 160 million pounds, the Financial Times (FT) reported Friday (July 4). That’s the  lowest six-month level in Dealogic data dating back to 1995.

According to the report, this total represents a 98% drop from the fundraising heyday in early 2021 during the COVID pandemic. It’s also beneath the levels in 2009 following the global financial crisis.

The report notes that this trend is happening at a time of increased anxiety about Great Britain’s role as a world center for equity finance as it scrambles to compete with Wall Street.

Sharon Bell, senior equities strategist at Goldman Sachs, told the FT that there was a time when London was a “Goliath equity market.” Now, however, the market is in a downward spiral that is creating a “nasty precedent.”

“You get fewer companies, they are less liquid, you see the best growth companies listing elsewhere, therefore any companies that arise are reluctant to list in the U.K.,” said Bell.

This downturn is happening in the middle of a year in which the broader IPO market has suffered due to tariff-related market uncertainty.

A report by Reuters in May found that mergers and acquisitions (M&A) had fallen to their lowest level in 20 years, with deal-making in a worse place than it was during the Great Recession of 2008-09 and the COVID pandemic.

Meanwhile, regulators in the U.S. are reviewing some of the restrictions placed on companies seeking to go public via special purpose acquisition company (SPAC) mergers.

Securities and Exchange Commission (SEC) Chairman Paul Atkins said last week the agency will review some of the more recent rules it imposed on SPACs.

“There have been new rules adopted by the commission in the last couple of years regarding SPACs,” Atkins told CNBC. “Those were very, you know, rather controversial, let’s say. So, we’ll be looking at all of those things.”

Atkins added that SPACs came about because they provide a quicker path to going public at a time when the number of IPOs has been decreasing.

“Disclosures, very important. Obviously, the structure of it is very important,” Atkins said. “But I think if we pay attention to going public and what are the impediments for people to access the public markets through IPOs and other means like that, I think the other situation will be able to solve itself.”

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