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London's IPO market buoyed by fast-growing tech companies

Derek du Preez | July 15, 2013
Ernst & Young found that US firms are opting for London so as to not get lost in bigger exchanges.

London is reasserting itself as the international capital market of choice after seeing an increase in listing and funds, which has been buoyed by fast-growing technology companies.

Ernst & Young's latest IPO Eye report found that the UK IPO market has raised more capital so far this year than during the whole of 2012 and is ranking in third place globally, behind the New York Stock Exchange and NASDAQ.

Success this year for tech firms has particularly been seen in the Alternative Investment Market (AIM), the London Stock Exchange's sub-market, which allows companies to float shares with a more flexible regulatory system than the main IPO market.

The second quarter of this year saw 11 AIM deals taking place, totalling £87 million, to which tech firms from the US contributed significantly.

David Vaughn, Ernst & Young's IPO leader for UK & Ireland, said that smaller State-side firms are choosing London because they feel they will have a higher profile in the smaller market.

"It is encouraging to see a diverse range of technology companies coming to the AIM market," said Vaughn.

"US-based broadcasting technology firm OneMedia's offering showed small US technology firms' growing willingness to list on the UK's junior market, as opposed to US exchanges where they risk getting lost alongside technology giants."

The London Stock Exchange (LSE) earlier this year unveiled plans for a niche market that will allow fast-growing companies to list shares and raise money while retaining 90 percent of the equity. It was hoped that this would attract fast-growing technology firms.

 

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