Positive macro signals and pent-up private equity demand underpin cautious optimism for H2 2025
Pipeline builds as private equity eyes exits
Deloitte’s Spring 2025 Equity Capital Markets update paints a cautiously optimistic picture for UK initial public offerings, forecasting a resurgence in activity from the second half of the year.
Following a 57% rise in equity capital raised in 2024 and a further 5% increase in the first quarter of 2025, London has reasserted its position as the leading European exchange for deal value, even as IPO volumes remain below pre-pandemic levels.
A key driver behind the expected revival is the growing backlog of private equity-backed businesses that have remained in portfolios beyond their typical lifecycle.
Many are now at a scale and maturity that makes a public listing viable. As conditions stabilise, these firms are expected to test the market in greater numbers, unlocking capital from long-held assets.
Tariff volatility shifts IPO timelines but not direction
While early 2025 brought renewed geopolitical and macroeconomic turbulence, including fresh US tariff uncertainty Deloitte notes that most IPO hopefuls have adjusted timelines rather than abandoning plans.
A number of issuers that had targeted the second quarter have shifted to post-summer windows. Nonetheless, a strong pipeline remains, supported by signs that markets may have moved past peak bearishness on tariffs.
The IPO of CANAL+ following its demerger from Vivendi suggests that listings of carved-out businesses may become a more common strategy for unlocking value in 2025. Meanwhile, international companies continue to view London as a compelling listing venue helped by a suite of regulatory reforms introduced in 2024.
Reforms aim to re-level the playing field
Changes to the UK listing framework, most notably the introduction of a single listing segment with FTSE index eligibility, have brought the City closer to parity with other international markets.
Adjustments to rules on dual class shares and significant transactions, alongside the planned overhaul of the UK Prospectus Rules later this year, aim to simplify the path to market and improve flexibility for issuers.
This modernisation effort includes the introduction of an International Secondary Listing category designed to attract foreign businesses seeking broader investor access. With over 35% of companies listed in London of international origin, the move reinforces the London Stock Exchange’s global credentials.
Investor confidence crucial to momentum
Despite this progress, Peel Hunt’s Brian Hanratty stresses the importance of selective deal execution. The UK IPO market is selectively open, with success dependent on issuers demonstrating track record, growth drivers and pricing discipline.
Notably, transactions that have succeeded have maintained strong aftermarket performance and built investor confidence through sustained engagement.
Retail investment is also increasingly recognised as a vital component, offering incremental price-insensitive demand and stronger alignment with public stakeholders. Issuers that have omitted retail tranches in recent years often regret doing so and attempt to rectify the decision post-IPO.
Outlook: gradual reopening not a floodgate
While London was absent from the top ten global IPO destinations in Q1 2025, the continued strength of follow-on activity, growing issuer pipeline and signs of macroeconomic recovery all suggest the IPO window is creaking back open.
The market may not be set for a flood of new listings, but a more sustained selective reopening is now firmly in view.
With a constructive regulatory backdrop, investor sentiment improving and private equity increasingly keen to crystallise returns, London’s equity markets look set to move off standby and prepare for lift-off in the second half of the year.