Victoria Stevens, Economic Advantage Team for Liontrust
The Covid-19 crisis led to some companies needing to raise funds quickly to tackle the short-term cash crunch from restricted trading conditions. However, it also displayed just how resilient and adaptable listed businesses can be; many companies were able to take a front-foot approach to tackling the rapidly changing economic backdrop, raising funds for proactive reasons such as making acquisitions or otherwise accelerate growth against a very dynamic business backdrop.
In this respect, the pandemic also highlighted the substantial benefits of being listed on the stockmarket, which provides an efficient and relatively immediate source of capital. London Stock Exchange data show there were 191 Main Market share placings in 2020 through to the end of November, comfortably exceeding 2019’s full-year total of 150. Unsurprisingly, these fundraisings peaked in the second quarter as companies reacted to the new trading conditions in which they found themselves.
Pleasingly for us, the majority of stocks in the Economic Advantage funds have proven resilient to the pandemic, and those raising fresh capital have largely done so for proactive reasons. We look forward to monitoring their progress in 2021 and stand ready to support our companies in their growth plans when required.