Report: Are the public markets closing to smaller companies?

1st May 2020

Report: Are the public markets closing to smaller companies?

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Hardman & Co and the QCA have published a new report examining data on the past 20 years of the UK public equity markets.

Download the report here (pdf)

Key findings include:

  • Since 2007, the number of companies on the London Stock Exchange Main Market has fallen by 25%, and on AIM by 49%.
  • Excluding the financials, the number of companies quoted on the Main Market has fallen by 60% since 1999.
  • Outside the largest 350 companies, the number of non-financial companies on the Main Market has fallen by 72% since 1999. By December 2019 the number had fallen to just 252.
  • The average market capitalisation of a quoted company outside the largest 350 has risen sharply. Adjusted to 2019 prices, the average of a small-cap company has grown from £38.9m in 2008 to £152.7m in 2019.
  • The average AIM IPO has grown from £21m in 1995 to £127m in 2019.

QCA surveys cited in the report indicate that these trends are driven by the level of regulatory burden, low interest rates making debt attractive, and increased competition from private equity, amongst other reasons.

The paper also outlines a number of recommendations on how to improve the attractiveness for companies to use the public equity markets, including examining certain regulations to reduce the burden on companies and taking steps to increase liquidity to encourage investment further down the market. There are also actions that companies can take to improve interest in their shares.

Download the report here (pdf)


Previously, Hardman & Co and the QCA worked together to examine the contribution of small and mid-sized quoted companies and found that they:

  • Employ over 3 million people - an estimated 11% of total UK private sector employment
  • Contribute over £26bn in taxes - about 5% of total UK tax take


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