Following a resurgent 2021, Equity Capital Markets activity in the UK and across the world has largely stopped.
Several factors have played a role in the slowdown, including generational record inflation rates, ongoing COVID restrictions in China and the invasion of Ukraine.
The lack of stability in the markets, alongside underlying concerns from investors around equity valuations has meant that IPO markets have largely closed.
There are some highlights however as three SPACS have listed on the main market following regulatory change. Funds are still being raised, although investors are targeting safer companies, rather than riskier bets.
Outlook for 2022
The IPO markets are expected to remain largely closed for the remainder of the year. Although we are seeing a pause in activity rather than a cancellation and early stage meetings are still proceeding. Investors are remaining sceptical of current valuations with forward projections possibly being too optimistic.
When the markets do re-open, we expect to see a surge in companies coming to market and looking for investor attention and backing. The pipeline of IPO candidates still remains strong.
Key highlights
- Compared to H1-21, H1-22 has seen a 73 percent decrease in funds raised.
- Three SPACS have been listed on the Main Market.
- Companies are looking to a 2023 – 2024 listing rather than a 2022 listing.
- Investors are looking for companies with trusted management teams.
