Trust, Turbulence, and Transformation: Navigating the UK IPO Market’s Comeback

As all eyes remain on the London IPO market, and whether 2025 will be the year of revival, we asked the experts what they thought the next 12 months might hold. 

Q: Why has the UK market for IPOs been effectively “closed for business” in recent years?

Andy Brough, Head of the Pan-European Small and Mid Cap team, Schroders

The IPO market has been closed due to the fact that trust has broken down between buyers and sellers.

Delphine Currie, Partner European and Middle East, Reed Smith

Global macroeconomic and geopolitical issues, from Russia’s invasion of Ukraine to conflict in the Middle East, have created instability, leading to a "flight to quality" which is benefiting large companies over smaller ones and complicating the backdrop for IPOs.

The UK market faces additional challenges from Brexit, a damaging mini-budget, and unattractive regulations, causing a decline in IPOs and companies choosing to list elsewhere.

Private equity funds also have a lot of fire-power at the moment and many founders seeking an exit are choosing the private route rather than throwing themselves to the mercy of the public markets.

Shannon Nicholls, Managing Director Equity Market Solutions, Rothschild & Co

While the market has been less active it has not been completely closed for business, as highlighted by successful IPOs such as Raspberry Pi, Applied Nutrition.

Muted deal volumes in London mirror those seen in most mature global markets with European and US exchanges showing the same trend.  However, a significant program of capital market reforms has enhanced the competitiveness of London against other global markets and more is in progress.

In the main however, companies for whom London is the natural listing venue, have simply not been ready to IPO in recent years but we see that changing, with an attractive pipeline now building into 2026 and beyond.

Brian Hanratty, Head of ECM, Peel Hunt 

Following a record year of issuance in 2021, IPOs all but dried up on the London Stock Exchange (LSE). There were a couple of drivers of this. Firstly, many of the ’21 cohort of IPOs performed poorly in the aftermarket, impacting appetite for what is a cyclical product. Secondly, the broader market backdrop was mixed, with concerns over rising interest rates and growth prospects. Finally, we lacked some of the higher-quality assets in the pipeline that investors would have liked to have come to market.

Having said that, we have had some notable progress over the past 12 months, with a number of mainly mid-cap companies pricing and trading successfully on the LSE. Although smaller in size than European activity, UK IPOs have performed better.

Q: What needs to happen for the market to reopen?

Andy Brough

For the market to reopen, trust has to be restored, and everyone has to leave the party with a balloon. By that, I mean all parties have to make money.

Delphine Currie

For the IPO market to recover, a period of macroeconomic and geopolitical stability is crucial, as recent trade tariffs have already caused IPO delays.

Secondly, the UK needs to continue its regulatory reforms to better compete with international exchanges, as the revised listing rules are showing early positive signs.

Finally, ongoing regulatory changes in 2025, including prospectus regime updates and AIM's review, could further improve the UK's attractiveness for listings.

Shannon Nicholls

The market is already open and there are a number of shifting dynamics that we feel will positively improve asset flows going forward.  The key one is that there is a dynamic in the private equity universe which should see some assets unlocked and come to market as funds expire, assets become too big, there is insufficient PE dry powder, return hurdles are hit etc. 

More deal flow, especially where it is well executed, will also bring greater confidence and momentum back into the primary markets.  Furthermore, we expect to see positive governmental and market driven initiatives, such as enhancement of the Mansion House compact, pension reforms, ISA reforms, investment incentives, etc, that will help to bring incremental capital into the listed equity markets, which will support further positive sentiment shifts

Brian Hanratty

We are in a market that is ‘selectively’ open right now. By that, we mean open for higher-quality companies with the right deal set up, particularly around size and valuation. For a broader re-opening, we would want to see further momentum in UK IPOs, which would give others the confidence to follow. A narrowing of the bid-offer spread between public market investors and the valuation expectations of selling shareholders, particularly in private equity, would also be helpful in unlocking a broader pipeline.

We were expecting UK IPO activity to pick up in Q2, but many of those processes got delayed on the back of the market volatility following ‘Liberation Day’ and the announced trade tariffs. Markets have rebounded quickly, which has been helpful, but investors would like to see further stabilisation and confidence from Q2 results on the broader backdrop and health of individual companies.

Q: What is your outlook for the UK IPO market in 2025?

Andy Brough

2025 will be challenging but the first few out will get a better reception than the last few.

Delphine Currie

Cautiously optimistic! I think the relaxation of the listing rules will see a continuing trend of step-ups from AIM to the Main Market. 

In terms of new listings, difficult years are often followed by boom years as IPOs which have been on ice rush to list once more benign market conditions prevail.  The early part of 2025 gave cause for optimism, but the recent wobble in the markets caused by the imposition of global trade tariffs is concerning.  It’s a real rollercoaster and market professionals in London will be holding their breath to see what happens next in this respect! 

Shannon Nicholls

The pipeline is building well, certainly for 2026 and beyond, and we may see some of that accelerate into late 2025 if there is a period of geopolitical and economic stability.  There is still plenty of activity and discussions, with execution pushed out to later this year and next following the recent market volatility.  Once there is some more certainty, IPO market volumes will grow quickly – it always does!

Brian Hanratty

We’re expecting further progress in the UK IPO market over the next 12 months. We are aware of a number of issuers that are monitoring potential launch windows over the coming quarters, including soon post-summer, when we expect activity to pick up again.

The most recent cohort of UK IPOs was focused on mid-cap, founder-led businesses, compared with some of the jumbo deals we saw in Europe. We think UK activity will broaden over the next 12 months, with larger and more sponsor-backed issuers looking to come to market. This is a positive development and an additional indicator of a broader reopening.

Q: What would your advice to companies thinking of coming to market in 2025 be?

Andy Brough

If you are going to come to the market, then price your shares at a price that you would be happy for your family to buy them.

Delphine Currie

Even in tough IPO markets, strong companies with a solid track record and business case can still list, but realism is key for those less established. For IPO-ready candidates, choosing an experienced advisory team and thorough preparation are crucial, including realistic valuation expectations and founders demonstrating long-term commitment. Despite recent market inactivity, institutional investors have capital to deploy for compelling investment opportunities with agile management teams ready to seize the right moment.

Shannon Nicholls

Companies looking to IPO later this year should ensure preparation is comprehensive and they are taking good advice around valuation feedback and how to time the market windows.  Knowledge is power – extensive investor education and engagement will ensure good companies are able to access the market once the backdrop is more constructive. 

Brian Hanratty

Firstly, ensure you are IPO-ready internally and identify any potential “red flags” with your accountants and lawyers so that these can be addressed early. Secondly, build up a cadence of investor interaction so that you can build relationships and identify potential shareholders ahead of IPO. Finally, don’t forget to focus on the business. Having a positive track record is crucial in providing a platform for launching a successful IPO.