Following today’s release of the new UK Listing Review, Neil Shah, Director of Research for leading investment research and consultancy firm Edison Group, has commented the below.
Q4 2020 hedge fund letters, conferences and more
The UK Listing Review Should Attract High Growth Tech Companies
“Overall, the UK Listing review is an encouraging step forward, the recommendations are positive and, if measures are successfully put in place, should attract more high growth tech companies to list in London. Nevertheless, it could still do more to address the need to increase investor education and build a more sophisticated investor class. Many recommendations are based on UK market and investor behaviour equivalence with the US, but the truth is that US investors tend to use more metrics and have different risk profiles. In order to get positive results, you need an educated investor class who ascribe the same value to companies as they do in the US.
It’s also heartening to see that it recommends looking at how technology can be used to improve retail investor participation in listings and fundraising as well as having appropriate stewardship roles. To drive the fast economic recovery possible, companies will need access to the widest pool of capital available, attract both institutional and retail investors as well.
Going forward, as with any relaxing of rules, a balancing act is required. We need to ensure that we attract the right companies to list at the same time as ensuring there is no forward creep of rogue actors and bad governance.”
