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UK Chancellor Intensifies Push to Revitalize London’s IPO Market
The UK government is actively seeking to reverse a three-year decline in initial public offerings (IPOs), with the chancellor of the exchequer, Rachel Reeves, set to unveil a series of incentives aimed at attracting tech firms and investors to list in London. The effort comes as the UK attempts to solidify its position as a leading global financial centre amidst increasing competition from the United States.
The Chancellor will on Tuesday escalate her engagement with the tech sector, attending JPMorgan’s “Tech Stars” event in london.This follows a Monday meeting hosted by Goldman Sachs, bringing together potential IPO candidates like oaknorth and Starling. According to sources familiar with the discussions, the Treasury is considering a range of measures to boost London’s appeal, including tax relief for entrepreneurs on flotation proceeds and potential tax breaks on the costs associated with going public.
Officials are also exploring the possibility of tying tax benefits to a commitment from companies and their founders to remain based in the UK for a specified period. A person with knowledge of the ongoing deliberations stated, “The chancellor is open and listening to ideas but no decisions have been made.” Furthermore, a stamp duty holiday for new London listings is under consideration, a move previously reported by the Financial times, intended to incentivize investor participation in UK shares.
The JPMorgan event will feature a conversation between Reeves and Jamie Dimon, chief executive of JPMorgan Chase. Attendees at both the JPMorgan and Goldman Sachs gatherings represent a diverse range of companies, including Revolut, SumUp, Monzo, Cleo, OLX, loveholidays, and Quantexa. Notably, former Arsenal football star Thierry Henry, a prominent tech investor, is also scheduled to speak.
The urgency of these efforts is underscored by the UK’s recent fall from grace in the global IPO rankings. London has slipped out of the top 20 listing markets in the first nine months of the year, a stark contrast to its historical prominence.This decline has been further exacerbated by AstraZeneca’s decision to prioritize its US shares, resulting in an estimated £170-200 million loss in stamp duty revenue for the Treasury.
Industry experts believe targeted tax incentives could be notably effective. Steven Fine,chief executive of Peel Hunt,emphasized the potential impact of IPO cost relief,stating,”These incentives would make every founder think twice about going to the US.” He noted that while the benefit might be limited for larger corporations, it would be a significant boon for smaller businesses facing significant IPO expenses – potentially £5 million when raising £50-100 million.
Reeves’ pitch to investors is expected to highlight the UK’s established trade deals,recent interest rate cuts,and ongoing efforts to reduce regulatory burdens. A Treasury spokesman affirmed the government’s commitment, stating, “the chancellor is focused on making the UK the best place for businesses to invest and attracting the most innovative companies to start, scale, list and stay here, and the FTSE 100 continues to trade close to an all-time high. By continuing to remove barriers to investment, we’re delivering our plan for change so that our businesses succeed and our economy grows.”
Recent listing plans from Princes, Shawbrook, and Beauty Tech have offered a glimmer of hope, signaling a potential shift in sentiment. Mark Austin, a partner at Latham &
