The first half of 2025 delivered a blow to London’s financial reputation, with the weakest listing figures in three decades, according to Dealogic.  But, despite a flurry of negative press headlines, leading equity capital markets (ECM) lawyers insist it is too early to write off the capital’s IPO prospects.

Instead, with a wave of financial reforms on the way, they maintain that the London Stock Exchange may be poised for a revival.

Data from the LSE shows that eight IPOs took place during H1 2025, two of which were on the main market, with the  £182.8m raised representing a significant decline on the more than £500m raised in H1 2024.

Meanwhile, London has also seen a steady stream of UK companies abandoning the City for New York, with fintech company Wise last month disappointing the UK market when it confirmed plans to switch its primary listing to the US.

Since 2016, 213 companies have left the LSE, according to data from the Confederation of British Industry, with the pace accelerating to 88 departures in 2022 and 70 more in 2023. Astra Zeneca is among other big names rumoured to be considering a similar move.  

Nevertheless, partners in the City have welcomed the raft of financial reforms announced by the Chancellor of the Exchequer at her second Mansion House speech on 15 July.

James Roe (pictured right), co-head of A&O Shearman’s UK equity capital market practice, believes that the decline in new listings reflects broader global economic shifts, pointing out that the tide may be turning to more favourable conditions.  ‘We’re at the back of a prolonged slump in new listings in the UK, but that’s a global phenomena as we come off the back of a macro cycle of 10-15 years of low interest rates – it’s not UK specific.’

To encourage more companies to go public in the capital the government has announced the creation of a specialist UK Listings Taskforce to look at the issue,  alongside a host of other regulatory and financial services reforms. The launch of the taskforce will build on changes to the listing regulations which came into force last summer and, according to partners,  signals that Downing Street is eager to remove regulatory barriers and show that the UK is serious about attracting new investment.

‘We’re hopefully on the cusp of London reopening if current stability remains in place and we have a couple of success stories when companies come to market that help change the narrative,’ says Roe, before adding that the reforms are welcome attempts to ‘rewire the principles by which we regulate financial services.’

In May, the UK introduced the Private Intermittent Securities and Capital Exchange System Sandbox (PISCES) which allows private companies to temporarily trade on the London Stock Exchange, a move which shows the government’s willingness to innovate. PISCES provides ‘optionality and flexibility for companies looking to go from private to public markets,’ Roe adds.

Richard Smith (pictured right), co-head of the corporate and M&A group at Slaughter and May, emphasises the reliability of the London market.

‘London has shown over the last few years that when companies come to the market for capital, considerable amounts of equity are available, and are available quickly,’ says Smith, pointing to the National Grid’s plan to raise £7bn through a rights issue last year as evidence. His view is backed up by EY’s report, which found that London was the top location in Europe for follow-on issuances and leads the world for post-IPO capital raising, with 50% of IPOs returning to raise further capital, compared with 24% for the Nasdaq exchange and 16% for the NYSE.

Commenting on whether the Chancellor’s announced reforms would be sufficient to re-ignite the London IPO market, Smith is clear as to the changes which still need to be made. ‘What the government needs to focus on is encouraging more growth capital to come to the London market.’

‘In London there are fewer investors who are prepared to invest in high growth, more speculative businesses with limited track records than exist in the US. If we can address that, then I think we will find a considerable number of companies coming to the market sooner and coming to London public markets for their growth capital, rather than going overseas.’

One ECM partner at a US firm in London agrees with Smith: ‘Unfortunately for London there’s a perceived sense that New York provides better valuation, better research coverage and companies get a better level of support.’

Alongside the taskforce, which will be led by the Office of Investment and supported by the Treasury, a concierge service, is to be launched in October. This will provide tailored assistance to companies exploring UK listings in a bid to show the government is willing to support new investors. 

‘Any move to breathe new life into UK listings is to be welcomed,’ says Alasdair Steele (pictured right), head of ECM at CMS, before expressing concern that the reforms might not go far enough. ‘The taskforce can’t just tinker with listing rules, they need to tackle the root causes of investor apathy.’

‘The real test for this taskforce will be cutting through the noise and pinpointing why London is losing its IPO edge,’ Steele continues. ‘It’s not just about regulatory changes – at its heart, a thriving market needs ambitious companies ready to list and investors eager to back them.’

Despite these concerns and the deeper pockets of New York’s capital markets, Smith maintains London remains attractive. ‘You can be a bigger fish in London, you can be confident of getting and staying in the FTSE index, which is very attractive, and you can be well covered and invested at a smaller scale.’

He insists:  ‘I believe the fundamentals are still strong. London is by far the biggest, best, most liquid stock market in our time zone. Therefore, it will succeed.’

Roe though is more hesitant, highlighting high levels of debt, global conflicts and the persistent ‘cloud on the horizon’ of Trump’s tariffs as factors which could further spook the markets.

In his view, while regulatory changes have created the ‘conditions for a functioning market’, optimism alone is not enough to halt the decline. ‘What we need is companies to take the step and list,’ says Roe.

The US firm ECM partner shares Roe’s caution, warning: ‘Market expectation is more for a rebound in the first quarter of 2026; optimism is six months ahead as opposed to six weeks ahead.’

It’s a sentiment echoed by Steele, who goes further, concluding that the UK’s future success will ultimately depend on whether the government can shift the narrative from ‘why not London?’ to ‘why London above all’.