The pace with which London is losing its status as a global financial markets hub has been laid bare after the capital fell to as low as 23rd in a global ranking of IPO destinations.
Just £184m was raised on the London Stock Exchange in the first nine months of the year, a far cry from the roughly £17bn raised as recently as 2021 and making 2025 the worst year for listings in more than three decades. The amounts raised represent a tiny fraction of the roughly £40bn that has been raised in the US over the same period.
The ranking placed London, once Europe’s premier listing destination, behind Sweden, Spain, Switzerland, Turkey, Poland and Germany and only marginally ahead of Greece and the Netherlands, according to figures compiled by Bloomberg. But the results also reveal a widespread listings drought across the continent, with Sweden the only country that had been able to raise more than £1bn.
“It’s a desert out there,” Neil Wilson, UK investor strategist at Saxo, told City AM.
“A friend at an investment bank called London a car boot sale with just crumbs of secondary placements and small capital raisings.
“What can be done? I don’t know exactly, but a big bang 2.0 strategy is required because it’s important to remember just how much productive economic output and tax the City is responsible for.”
The alarming figures come as a growing number of large-cap UK companies mull listing in the US to swerve lower valuations in the UK. This week one of the UK’s most valuable companies, pharma giant Astrazeneca, said it would be “upgrading” its New York listing in order to access deeper pools of capital, while earlier this year fintech Wise switched its primary listing from London to New York. Accountancy firm MHA, which raised just under £100m in April, remains London’s biggest IPO by deal volume so far this year.
It follows calls for pension funds to be required to have a “default” UK weighting to prevent the London stock market getting caught in a “doom loop”.
A UK weighted default fund with an allocation of between 20-25 per cent, if made a requirement for defined contribution (DC) pensions with an opt-out for individuals, would pump an extra £76bn into UK equities to rejuvenate the public market, according to projections from think tank New Financial.
A “do nothing” approach risks seeing DC fund allocation to the UK slip further still to 3.5 per cent by the end of the decade, think tank New Financial warned, while full mandation would likely see UK equities rise to around 12.4 per cent of total funds.