Are the public markets closing to smaller companies?

01 May 2020 / Corporate research

The evidence from the past 20 years in London

There has been much comment on the fact that equity markets in the US and Europe have been shrinking for some years now. This paper assesses the evidence in London, considers explanations, asks whether it matters and (assuming it does) what can be done.

We find that, excluding the 350 largest companies and all financials the number of trading companies on the Main Market has fallen by 72% since 1999. The average market cap at IPO has gone up substantially; for example, the average AIM IPO market cap has grown from £21m in 1995 to £127m in 2019, even when adjusted for inflation.

Companies leave it later in their life to IPO. This is bad for them, the economy and society. We suggest a number of solutions.


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