CHRIS HUGHES: Amsterdam challenges London’s capital market

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South Africa Headlines News

Europe is a natural destination for companies raising funds in euros

Two potential initial public offerings highlight the stiffening competitive pressure on London as a venue for raising capital. Post-Brexit, it may no longer be the natural choice for European companies. And it’s still struggling to catch up with the US as a favoured arena for technology and biotech firms.

The recent private equity-related floats in London have performed poorly. Bridgepoint Group is down about 15% since its July debut, while Petershill Partners has dropped nearly 30% since its September stock sale. Perhaps CVC reckons it will enjoy a quieter life and come under less scrutiny in Amsterdam than in London. Either way, London was never going to be an automatic choice. The city may still be the capital of Europe’s private equity industry and where CVC is de facto headquartered, even if its official domicile is Luxembourg. But the firm’s investment professionals mainly operate in the local European and international markets where their portfolio companies are based.

London may have to let CVC go and take it on the chin. There are bigger listings to worry about — notably microchip designer ARM, now being prepared for IPO by parent Softbank Group after a sale to chipmaker Nvidia was blocked on competition grounds. Softbank founder Masayoshi Son has earmarked Nasdaq for the deal. But that’s not been formalised just yet, and UK MPs are keen to see ARM regain its former British listing.

Source: News Formal (newsformal.com)

 

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