watch this if you care about the uk

The other week I chaired a panel at the Investor Summit.

A load of fund managers and people from high levels of London financial markets were there.

What I need you to do is listen to some of the answers provided by the panelists because this will help you to understand why it is ESSENTIAL that we rebuild UK capital markets…

If you don’t want to watch, here are the key points (but you SHOULD WATCH).

Decline in Public Listings

• There has been a sharp drop in the number of UK listed companies, from 2,400 to 1,700 over the last decade, with AIM listings falling from 1,700 to under 700.

• This trend is mirrored globally, including in the US, Europe, and Australia, partly due to depressed valuations and low liquidity in the UK versus other markets.

Causes of De-equitisation

• Post-Brexit economic pressures, shifts in pension fund investments away from equities toward bonds, and changes in global investor sentiment have contributed to UK underperformance.

• The rise of passive investing and the “Magnificent 7” US tech stocks has drawn capital away from UK equities, especially in recent years.

• Over-regulation, unfavorable tax policies, and lack of domestic incentives have made public listings less attractive.

Government Policy & Solutions

• Recent regulatory changes (e.g., merging listing segments, prospectus reforms) aim to simplify and encourage listing but are viewed as insufficient on their own.

• Panelists advocate for incentivizing domestic investment, such as UK-specific tax-advantaged savings programs and more active encouragement of retail investor participation.

• The Swedish model is cited as successful, where pension and retail investors support IPOs, and an “equity culture” was nurtured by policy and savings schemes.

Private vs. Public Markets

• Growing government focus on private markets (e.g., the Pisces scheme) is discussed as both a source of concern and opportunity; panelists warn that liquidity in private companies may discourage public listing and reduce market transparency.

• Private equity’s dominance in buyouts threatens the vibrancy of UK public markets and national champions.

The Role of Retail Investors

• There is a lively community of retail investors in UK small caps, driving liquidity and fundraising, especially on AIM, where about 30% ownership is retail.

• Panelists suggest that mobilizing a fraction of the UK’s vast cash and savings deposits toward equities could transform the market, with incentives needed to shift participation.

Future Outlook and Optimism

• Despite recent poor performance, panelists are optimistic about a rebound in UK equity markets, citing innovation, deep pools of capital, and the potential for reform-led revitalization.

• They emphasize the need to fix small cap/AIM markets first, from which larger companies will eventually emerge.

Audience Q&A Highlights

• Questions include whether government should disincentivize property investment to support equities and how policy can rebalance investment toward productive assets like public companies and new housing.

But what are your thoughts?

Drop me a reply so we can get chatting.