Window for IPOs ‘remains firmly open’
AS the FTSE 100 reached its highest level since the Millennium, an official from the London Stock Exchange said there continues to be a “good pipeline” of North West businesses looking at listing.
Mark Fahy, head of small and mid cap at the LSE, was speaking at Barclays’ Strategies for Success event at The Point at Lancashire Cricket Club, where the bank’s new thought-leadership report “Driving the growth of the North West economy’ was launched.
Click here to download the report for free.
Mr Fahy, who was one of the panelists discussing the question of finance for growth, said that market conditions had improved dramatically from mid-2013, with the flotation of insurer Direct Line, and conditions are now “the best I have seen in a decade.”
In the first quarter of 2014 there have been a clutch of significant IPOs, the largest being AO World, Pets at Home and online fashion retailer Boohoo.
Mr Fahy said: “The recession meant the IPO market was pretty-much closed, but there has been a huge change in appetite, probably related to the lack of return from cash.
“The IPO window remains open – we have just had our best ever Q1 where 31 IPOs raised £5bn. Our pipeline is very much UK-focused too – which is unusual.
“We have seen some big regional deals recently and there are a couple main market IPOs in the pipeline.”
Bryce Brooks, finance director of Flowtech Fluidpower, a private equity-backed engineering business based in Skelmersdale, which is floating on AIM next week, agreed that public markets are an attractive option, and said there is access to plenty of institutional money too.
“It has gone from the ridiculous to the sublime really. We have struggled to raise debt for acquisitions in the past, but it’s the opposite situation now.
“During our recent roadshows, one fund manager said to me: ‘When you need to do an acquisition come back and see me as I have £1.2bn to spend”.
