The London Stock Exchange plans a new bourse for private companies

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The hope is that the private firms joining the new exchange will be more likely to list in London when they go public

Save time by listening to our audio articles as you multitaskThe new bourse will be a partnership with Floww, a database for private firms and venture-capital funds in which the’s parent company has bought a minority stake. Floww was designed to connect startups to potential investors by enabling them to share commercial data in a standard, easily verifiable form. Theintends to take that model two steps further.

Similarities with how public-equity markets work are no coincidence. Murray Roos, the head of capital markets at the’s parent company, wants it to be a step towards creating exchanges that are “genuinely indifferent as to whether a company is public or private”. Then private firms would be able to raise capital on a standardised exchange rather than ininvestment rounds, which happen behind closed doors.

An exchange for private equity would be good for investors, too, because the market for unlisted firms has grown more important in recent years. In 2021 private-equity investors struck deals worth a record-breaking $1.1trn globally.funds accounted for a further $621bn. Onerous reporting obligations for listed firms have led to companies staying private for longer, growing all the while.

Another, unspoken, aim of the partnership is to help revive Britain’s flagging stockmarket. Other platforms also allow investors to trade the shares of unlisted companies, from the market for private shares run by Nasdaq to British “crowdfunders” such as Seedrs. But theis the first to try to integrate such an offering into its infrastructure of data analytics, regulatory reporting, settlement and clearing.

. A boost is sorely needed. In 2005 the City hosted 20% of the world’s initial public offerings; by 2021 that had fallen to 4%. The loss in 2016 of Arm Holdings, one of Britain’s most successful tech companies, to SoftBank, a Japanese investment giant, dealt a double blow. The firm, which has its headquarters in Cambridge, is now set to return to public markets, but looks likely to choose Nasdaq over thecannot succeed in alone.

 

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The best way to revive Britan's stock market is to join America's stock market which is the oldest and most powerful of all the stock markets.

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