The United Kingdom’s attractiveness as one of the top destinations for global capital appears to be waning after data released on Friday revealed that in the first half of 2025 fundraising from London IPOs collapsed to lows unseen in over 30 years.
The five listings on U.K. markets in the first six months of the year raised £160 million - the lowest half-year amount in Dealogic data going back to 1995 - and pour cold water on hopes among London financiers that 2025 could signal listing activity revival.
Even in the wake of the 2008 global financial crisis (GFC), two London IPOs managed to raise £222 million in the first half of 2009.
The paltry amount raised in half a year marks a 98% fall from the six month fundraising bonanza at the start of 2021 during the pandemic and is below levels reached in 2009 in the aftermath of the global financial crisis.
Both IPOs and follow-on issuances by listed companies experienced the worst first half of a year since 2012, with £8.8 billion raised - adjusted for inflation, this was the worst first half since at least the mid-90s.
More than half of that amount came from the two final sales in GSK’s spin-off to the listed market of consumer pharmaceutical company Haleon.
The two transactions totalled just under £5 billion.
London’s biggest IPO so far this year was the listing of professional services company MHA, which raised £98 million on its debut on the Alternative Investment Market (AIM) in April.
Adding to the unravelling of London as a global Goliath equity market was the shock revelation that the CEO of London’s biggest listed company, AstraZeneca, had confidentially hinted at plans to move the company’s listing to New York.
Meanwhile, a number of U.K. companies recently announced plans to move their primary listing to the U.S., the most recent being fintech star Wise.
Wise’s announced plans to shift its primary stock listing to a U.S. stock exchange underscore watershed shifts in the global listings landscape that have been playing out for some time.
For example, during the past five years alone the steady stream of high-profile companies leaving the LSE in favour of the U.S. totalled over $100 billion in market cap.
Other firms like construction supplier Ferguson and pharmaceutical firm Indivior are in varying stages of moving their primary listings to U.S. exchanges.
The reasons cited include lacklustre liquidity in London, persistently lower valuations, and limited index inclusion options for growth companies.
Added to the downward spiral of the London market notes Sharon Bell, senior equities strategist at Goldman Sachs is the fewer number of companies that are less liquid, while also lacking the growth upside of their global counterparts, especially in the U.S.
What’s also making a London listing a less lucrative prospect for companies raising capital are the lower valuations relative to Wall Street.
According to LSEG data, the price-to-earnings ratio for the blue-chip FTSE 100 index is around 16.6, compared with 27.2 for the S&P 500.
“I worry about the ability to raise capital for companies in the U.K., and how expensive it is to raise capital relative to other countries,” said Bell.
Echoing similar sentiments, Michael Healy, U.K. managing director at investment platform IG is concerned that the UK market is “withering and dying.”
“It feels like every week that goes by, another firm is either being bought out by private equity or is relisting in the US.”
Interestingly, analysis by the Financial Times suggests that European companies that add a U.S. listing often do not see an uplift in their valuations.
