A recent New Finance report states that the bigger threat is not the US market but private markets in regard to the moribund UK and European public markets
The report claims:
“Over the past decade, more than 1,000 listed companies in Europe with a combined value of just over $1 trillion have delisted after being acquired by privately-held companies or private equity firms.”
And;
“…reforms [ are needed] to help make European markets more attractive to companies and investors alike by reducing the chronic fragmentation in European equity market infrastructure; consolidating supervision and reducing the complexity of regulation across Europe; incentivising and building institutional and retail demand; developing a new narrative and a wider culture of investment rather than savings; and addressing wider challenges in the European economy.”
Globacap CEO and co-founder Myles Milston reflected on the report, noting that the issue undermining UK and European capital markets is not the US but the strength, size, and sophistication of private markets.
Milston states:
“More firms are de-listing than ever before, and even more are staying private, opting to tap into the growing pools of private capital. Staying private is hugely beneficial for companies, enabling them to keep full control of their businesses, tap into deep pools of private funding and protect their valuations, all while avoiding the expense and complexity of an IPO.
“At the heart of this is digitisation which has simplified private market transactions, eroding one of the key benefits of public markets: liquidity. With private equity firms sitting on high levels of dry powder, the shift from public to private markets is only set to accelerate.”
The report advises that there is a “need from a policy and structural perspective to make European markets more dynamic and more attractive to investors and companies alike.”
