Recent trends in the London stock market highlight increasing challenges for UK-listed companies, as multiple firms have chosen to delist or agree to takeover offers in the past year. Notable examples include Bodycote, Gamma Communications, Capricorn Energy, and easyJet, all of which have recently exited or are in the process of leaving public markets in London. The total value of acquisitions involving UK-listed companies has surpassed $100 billion (£74 billion) over the past 12 months, underscoring a broader shift away from London’s exchanges.

Industry observers point to a pattern in which companies listed in London are perceived as undervalued and face difficulties in accessing long-term growth capital on favorable terms. As a result, these businesses often become acquisition targets for private equity firms or seek alternative ownership structures. This trend has raised concerns about London’s competitiveness vis-à-vis other major financial centers such as New York, which continues to attract domestic and international companies for public listings. Additionally, some established UK firms, like gaming group Flutter, have moved their listings abroad.

Tony Dalwood, chief executive of investment firm Gresham House, highlighted his company’s own experience when it transitioned from London Stock Exchange’s Aim market to private ownership in 2023. Dalwood cited a significant undervaluation of the company on the public markets and an inability to secure patient capital within the existing regulatory and tax environment as key factors behind the decision. Since going private, Gresham House has expanded its operations, becoming a leading player in forestry and natural capital management globally.

Dalwood argues that the UK’s regulatory and tax landscape has grown increasingly burdensome over time and fosters a culture where entrepreneurial success is viewed with skepticism rather than encouraged. He contrasts this with the United States and Silicon Valley, where risk-taking and failure are more readily accepted and long-term success is rewarded. Dalwood criticizes recent reductions in incentives for long-term investors, such as the cut in income tax relief on venture capital trusts from 30% to 20% less than a year ago, suggesting that such measures discourage patient capital essential for early-stage and growth companies.

To reverse the decline of UK listings, Dalwood calls for comprehensive reforms including restoring tax reliefs for long-term investors, maintaining competitive corporation tax rates, reintroducing entrepreneurs’ relief, and extending qualifying periods for capital gains and inheritance taxes to better reflect the typical timescale of business growth. He cites Ireland’s recent tax policy adjustments as an example of how competitive tax environments can attract both companies and investment, ultimately increasing overall tax revenues.

Dalwood emphasizes that public and private capital markets are interdependent and that a vibrant public market supports jobs, investment, and expertise within the UK economy. He advocates for a consistent, long-term strategy beyond short-term budget fixes or political cycles, asserting that such an approach would help the UK reclaim its position as a global leader in trade, finance, and innovation. Without addressing these structural issues, many UK companies are likely to continue seeking capital and listing opportunities abroad.