Another week, another blow to London’s capital markets. This time it was Wise Of Of Wise, one of the UK’s brightest tech stars. This announced that it would switch its main listing to New York.
The £11 billion fintech move has put the city in new warnings about a shrinking pool of listed companies and square miles of advisory fees.
“We’ve seen a lot of effort into this research,” said Charles Hall, Peel Hunt’s research director.
Wise’s announcement comes hours after Cobalt Holdings, one of London’s rare lists this year, to abolish plans for the first public offering. A few days ago, Indivior’s 2014 Opioid-treatment Arm also spun from Reckitt, revealed that it would be switching its listing to New York.
But Wise’s shocking exit hit a particularly hard hit, leading to broader questions about London’s ability to maintain high-tech companies grown in the UK.
Founded by Estonians Christo Kelman and Tarvet Hinrix, Wise was an outstanding success story from the online-centric company Rush for release in 2021.
Investors remain hurt by disastrous vintage listings including Deliveroo, known as the worst IPO in London history. The stock fell sharply and never recovered. Deliveroo has left the London Stock Exchange after accepting a £2.9 billion acquisition from Doordash last month.
The majority of companies listed in 2021 had a value crash, but two Made.com and Style were managed.
In contrast, Wise’s rating is the fifth-largest since the list. As a result, one city advisor emphasized that Wise was unable to complain about the valuation gap between London and New York. Nor could they use inferences unfolded by Ferguson, plumbing groups or gambling giant flutters, but it won the majority of its overseas revenues, as only a fifth of its business is in the US.
Even more unfortunately, Wise was exploring the transition to the FTSE 100 index in parallel. There you will have access to deeper liquidity from passive tracker funds.
But instead, FinTech chose New York. In New York, rather than violating the five-year deadline, as in London, it can maintain its dual-class share structure forever. The decision comes less than a year after government reforms (including other dual-class structures) aimed at encouraging businesses to stay in the UK.
“Wise is another wake-up call to the government,” Peel Hunt Hall said. “I chose to list it here. It became an FTSE and instead voted on that foot.”
2025 is evidence that London’s disastrous performance will not be reversing in 2024, which suffered the worst year of departure since the financial crisis. A total of 88 companies listed or transferred major listings from major London markets, and in exchange only 18 companies transferred.
Already this year, Unilever chose Amsterdam for London to list ice cream units. Challenger Bank’s Shawbrook paused its plans while considering another route. It seems increasingly unlikely that it was meant to be a London blockbuster on this year’s £50 billion list from Shane.
The two city advisors emphasized that the New York Stock Exchange has a larger team of staff dedicated to poaching foreign companies than the London Stock Exchange, which focused on attracting residential adult companies. LSE declined to comment.
“The loss of Wise is causing the government to need action rather than after long consultations to encourage companies to start, list and stay in the UK,” said a senior employee at a potentially publicly listed company.
According to AJ Bell Research, the acquisition of a publicly traded UK company outperformed IPOs 3-1 for the first three months of the year. In the previous year, only seven small businesses, including MHA and Achilles Investments, raised a total of £176.18 million.
Meanwhile, the massive departures include cybersecurity firm Darktrace and Hargreaves Lansdown, Hargreaves Lansdown.
Russ Mold, an analyst at AJ Bell, said:
It affects London’s position and the Treasury’s ability to collect stamp duty, as well as the broader ecosystem of the city’s businesses and advisors.
“We’re looking forward to seeing you get a better understanding of the company’s business and M&A,” said Simon Nicholls, co-head of Slaughter’s companies and M&A.
The pressure is being built. Earlier this month, Moelis notified the bankers at London Equity Capital Market after a lack of transactions. The cut will be provided in addition to similar warnings at RBC and a downsizing team at HSBC’s Equity Capital Market.
“We are pleased to announce that Juli Amp Richard, Global Transactions Director at Freshfields,” said: “We are currently working on more take private transactions in London.
However, he added that there is still a pipeline of IPO candidates, just waiting for a more subdued market to regain confidence.
Bankers are currently pinning their hopes on planned lists of Monzo, Ebury, Zopa, Clearscore and Zilch, but some of these can be slid out next year or later.
Mark Austin, an adviser to Latham & Watkins and part of the Capital Markets Industry Task Force, a City Grandes group seeking reforms to revive the UK market, claimed London remains the most attractive destination in Europe.
“Wise is not a small amount as it is quite high in the London capital market and is premium on IPOs and other tech stocks.” Austin believes London should take that reform further and make the dual-class structure permanent, rather than the 10-year deadline for entrepreneurs’ founders.
The Financial Conduct Authority, which is responsible for drafting the listing rules, declined to comment.
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Austin isn’t just hoping for the government to go faster.
There is also a long-term stamp duty campaign to discard stocks to promote more UK ownership in domestic companies, but the Treasury relies on billions of pounds it generates for financial resources.
The Ministry of Finance said in a statement: “The UK is Europe’s leading hub for investment and is pushing for reforms to make the UK a great place to start, expand and list companies by overhauling listing rules and creating new stock exchanges for private companies.”
Simon French, head of economics at Panmure Liberum, asked the government to “oil the corporate pipeline” by offering the same tax incentives to its main market list, just like AIM, the junior market in London.
“There shouldn’t be any need to wait for the government to wake up and act.”
