By Callum Keown
London IPOs fell to a decade-low last year due to geopolitical uncertainty but the first half of 2020 could see an uplift in listings, according to consultancy firm EY.
There were 35 IPOs in London in 2019 — 24 on the main market and 11 on the junior Alternative Investment Market (AIM) — raising a total of £5.9 billion. That was a 56% fall from the 79 in 2018, which raised a total of £9.5 billion.
Payments processor Network International /zigman2/quotes/211189588/delayed UK:NETW -2.82% was London’s largest IPO of the year, raising £1.2 billion. The company was floated by private equity firms Warburg Pincus and General Atlantic. The Trainline /zigman2/quotes/212885666/delayed UK:TRN -1.54% IPO, backed by private equity group KKR, was the second largest, raising £1.1 billion.
EY’s U.K. IPO leader, Scott McCubbin said: “Amid unprecedented geopolitical uncertainty, 2019 was a challenging year for the global public markets, and London wasn’t alone in experiencing a downturn in activity.
“That said, we did see some high-profile listings in the U.K. last year raising significant funds, with the majority performing well post IPO.”
McCubbin added that 53% of all proceeds raised from new flotations in London were from private equity-backed companies, compared with a global average of 29%.
The third quarter of 2019 was the quietest in a decade. Listings picked up in the fourth quarter, but the year as a whole was the worst in the last 10 years.
Globally, there were 1,127 IPOs in 2019, raising a total of $202 billion — a 19% drop in number and 2% fall in proceeds. The world’s largest IPO came at the end of the year with Saudi Aramco’s SA:2222 +0.42% listing, which raised a record $25.6 billion, mitigating the drop in proceeds.
However, EY’s Global IPO trends report predicted more activity in the first half of 2020.
“Some of the geopolitical uncertainties during 2019 are expected to subside in Q1 2020, such as the easing of global trade tensions and greater clarity around Brexit after the U.K. election,” the report said.
“This, combined with strong pipeline in major markets, creates a positive environment for more IPO activity in 2020, particularly in the first half of the year.”