UK achieves strongest Q1 IPO performance since 2007

The number of company listings in the first quarter of 2021 was the highest of any opening quarter since 2007 according to the latest IPO Eye from accounting firm EY.

Building on the resurgence of activity seen in the second half of 2020, the main market saw 12 IPOs in Q1 2021, with £5.2 billion raised.

The Alternative Investment Market (AIM) was also buoyant, with eight IPOs raising £441 million.

Both figures took first quarter fundraising to a total of £5.6 billion, more than half of the £9.4 billion raised in the whole of 2020.

More funds were raised than in any other opening quarter since 2007, and more than any quarter since the £6.9 billion raised in the second quarter of 2014.

The performance during the first three months of 2021 is in stark contrast to the same period in 2020 when there were just three IPOs on the main market and two on AIM, which raised a combined total of £615m – a value nine times lower than this year’s opening quarter.

Mark Allcroft, strategy and transactions partner for EY across Yorkshire and the North East, said: “The UK has had the strongest opening quarter for IPOs for 14 years, with the markets successfully weathering the effects of Brexit and bouncing back from the stall in activity caused by the onset of the pandemic a year ago.

“Such a strong start to the year is likely to encourage an increased appetite for IPOs from Yorkshire and North East-based businesses, though this may vary depending on the sector.”

In addition to IPO activity, follow-on activity has also been strong in the UK with existing issuers raising more than £9 billion in the first quarter of 2021.

Globally, IPO markets have had their best start to the year in more than 20 years, with more than $65 billion raised in over 300 IPOs.

This excludes US-focused special purpose acquisition company (SPAC) listings which have also been extensive in the quarter with around 300 SPACs raising over $90 billion – compared to some $80 billion in the whole of 2020.

Helen Pratten, EY strategy and transactions partner, said: “The increase in UK IPO activity, which began in the latter half of 2020, is expected to continue at pace as confidence in the post-pandemic landscape builds and the UK’s credentials as an international leader hold fast.

“There is clearly competition to IPOs from US SPACs seeking acquisition targets in the UK which could stand to affect or reshape the market here.”