New research from BDO LLP shows fewer than 4% of the UK’s fastest growing technology businesses have floated on the London Stock Exchange over the last 20 years.
Tony Spillett, Partner and National Head of Technology and Media at BDO LLP, said, “If you believe that listing fast-growing tech companies on the stock market is an important part of helping to deliver economic growth, then the UK is missing out.”
Based on identifying the 100 fastest growing technology businesses in each year for the past 20 years, the BDO’s research reveals of the UK’s 1,200 fastest growing technology companies of the last two decades, only 43 have gone on to float on the London Stock Exchange. 660 of these businesses have remained under private ownership.
Tony Spillett says that the research explains why Lord Hill’s review into listing requirements is so important as the UK is not attracting enough tech businesses onto its public equity markets.
Among the recommendations set out by Lord Hill include:
- Allowing companies to list on the LSE’s premium listing segment with dual class share structures – giving founders of businesses greater voting rights on certain decisions
- Reducing the free float requirement from 25% to 15%
- Conducting a substantial review of the prospectus regime so that admission to a regulated market and offers to the public are treated separately in future
Tony Spillett adds, “UK investors are currently only able to access many tech businesses indirectly through private equity funds, a route which is not open to many.”
“Within the parameters of the current rules, the LSE has been trying hard to attract more high growth tech businesses onto the market. However, there is now a consensus that the listing rules do need to be reformed in a way that balances the interests of both tech entrepreneurs and investors.”
