London Stock Exchange Faces Continuing IPO Challenges
The London Stock Exchange (LSE) has been experiencing a significant decline in initial public offerings (IPOs), with major companies opting for listings outside the U.K. This trend highlights ongoing challenges for London in attracting firms looking to raise capital through public markets.
Recent High-Profile Listing Withdrawals
In a notable development, British fintech company Wise announced plans to relocate its primary listing to New York, dealing a fresh setback to the LSE. Similarly, metals investor Cobalt Holdings canceled its intended London IPO. Additionally, reports suggest that Chinese fast fashion giant Shein is considering Hong Kong for its public listing instead of London.
Declining IPO Activity and Fundraising in London
Data indicates that the London market has seen a sharp downturn in IPO activity. In 2024, only 18 companies launched IPOs in London, compared to 119 three years earlier. Funds raised from IPOs on the LSE also fell markedly, with proceeds dropping to £100 million ($135.86 million) in the first quarter of 2025 from £300 million a year prior.
Among recent IPOs, French broadcaster Canal+ experienced weak demand, with its shares declining 22% on debut. Such performances underscore investors’ cautious stance toward newly listed firms on the London market.
The U.S. Market’s Sustained Appeal
Contrasting London’s downturn, the U.S. continues to attract a significantly higher volume of listings and capital. Twelve months into 2025, the United States has completed 136 IPOs, sharply outpacing London’s eight. The U.S. market raised approximately $27.6 billion from IPOs, reflecting its position as a global leader in equity capital markets.
Investment experts note that perceptions of higher valuations and deeper investor pools contribute to the U.S. market's dominance. The London market, although showing pockets of resilience, struggles with reputational challenges amid takeover activity and a scarcity of new listings.
Potential Impact of Trade Policies on Market Dynamics
Some market observers see potential for change driven by evolving trade and investment patterns. Controversial tariffs and trade policies implemented in the U.S. may encourage companies and investors to diversify their listing venues away from American markets.
Experts suggest this shift could enhance the appeal of European and U.K. equity markets. Increased diversification might lead to more investment in U.K.-based companies and a possible revival in London IPO activity.
Expert Opinions on Future Trends
- Chris Clement, senior portfolio manager, notes that as investors reassess the assumption of U.S. market pre-eminence, there may be a resurgence of interest in the U.K. and European stock exchanges.
- Mark Williams, global chief revenue officer at a mergers and acquisitions platform, anticipates that changing risk appetites could trigger a notable pivot to U.K. markets, potentially boosting IPO volumes.
Investor Caution Recommended Despite Opportunities
While a possible revival in London IPOs is anticipated, experts urge investors to conduct thorough due diligence. Assessing a company’s competitive position, management quality, and financial health remains crucial before participating in any new public offering—regardless of the market.
Russ Mould, investment director, emphasizes evaluating each IPO on its merits to balance potential gains against risks.
