15 November 2024

City of London: London remains Europe’s largest equity market, with over £17bn raised last year

State of the Sector: Annual Review of UK Financial Services 2024 - showed companies on the London Stock Exchange raised over £17bn last year, far ahead of Paris at £10bn and Frankfurt at £8bn. On a global scale however, the UK ranked fifth for raising equity capital last year...

A new report, by the City of London Corporation, shows that while the UK is faring as the strongest financial services destination in Europe, the sector needs further reform to remain world-class.

The new report called, State of the Sector: Annual Review of UK Financial Services 2024, showed companies on the London Stock Exchange raised over £17bn last year, far ahead of Paris at £10bn and Frankfurt at £8bn. 

On a global scale however, the UK ranked fifth for raising equity capital last year, coming behind the US (£105bn), China (£87bn), Japan (£27bn), and India (£30bn).

High interest rates last year hampered investment levels across the UK, particularly across private equity and venture capital and through the number of IPOs in the UK.

However, although UK’s IPOs (initial public offerings) have taken a hit, in the five years to September 2024, 192 UK companies first listed in London and this raised over £23.8bn. Over the same period, 847 UK companies have returned to the London equity markets raising over £122bn through 1,975 transactions.

The State of the Sector report examines the sectors’ performance over the last year using 40 metrics – such as the size of equity markets, size of the insurance market and asset manager AUM data – to highlight key developments required to boost growth.

Key findings from the State of the Sector report include:

• The UK is Europe’s top destination for FS foreign direct investment and only behind France for total foreign direct the investment
• In 2023, the UK attracted 730 FS projects from international investors valued at £819m
• The UK fell behind France and Germany for greentech investment in 2023. UK investment fell to £4bn from £7bn in 2022
• In the five years to September 2024, 192 UK companies first listed in London

Chris Hayward, Policy Chairman at the City of London Corporation said:

“As we show in this report, over £17bn has been raised on the London Stock Exchange last year. This funding supported companies to grow, hire, and innovate, boosting the UK economy and keeping London a hotspot for international business.

“It's positive to see recent reforms have removed long-standing friction points in the UK markets.

“The upcoming Industrial Strategy provides an opportunity to leverage the power of this sector to strengthen the entire UK economy, boosts skills, and uplift productivity across the country.”

The report also highlights a number of opportunities that will be key for the continued competitiveness of UK’s financial services sector. These include: 

• Encouraging investment by large UK investors into the ‘Scale Up’ stage of the business life cycle.
• A centralised, high-profile promotional campaign led by Government and industry leaders that highlighted the importance of the financial and professional services sectors.
• The sector would benefit from using the UK-Swiss Mutual Recognition Agreement as an example to increase the number of innovative services export trade routes.
• UK businesses and investors are committed to achieving net zero, but investors need to see the same commitment from government. The recent TFMR report highlights the opportunity for the UK to be a world leader in transition finance. 
• Sustainable investment sometimes necessitates a higher risk appetite, and investors must be supported to take appropriate risk to boost green investment. A central government department for net zero transition projects could ensure green businesses can access the finance services they need and improve investor confidence.

 

City of London

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