While public capital markets remain a major funding source for companies, fewer and fewer are making the decision to list on UK public markets, while more are leaving, according to a new report from UK Finance, the financial services trade association.
However, while public markets become less attractive in the UK, UK Finance finds that private capital markets in the UK are growing quickly, now providing £1.2trillion in funding. In fact, companies appear to be staying private for longer, meaning the decision on whether to join pubic markets is now more nuanced.
Venture capital has grown by 20 per cent per year on a compounded basis, private equity by 11 per cent, and private credit by 43 per cent since 2013.
The sustained growth of venture capital and private equity has also contributed to the continued growth of UK capital pools, with these capital sources accounting for 15 per cent of newly issued capital in 2024, compared with five per cent in 2013. Although its share of total capital issuance has decreased, capital sourced from public capital markets has still seen four per cent annual growth since 2013.
The UK’s capital markets operate in an increasingly competitive global environment. To maintain the UK’s status as a leading financial centre, the UK Finance report set out a series of potential actions for government, regulators, and industry.
It says that the industry needs to explore new solutions to support UK company growth and liquidity, including privately funded growth funds, crossover funds and the proposed Private Intermittent Securities and Capital Exchange System (PISCES) to better connect public and private markets and facilitate smoother transitions for companies seeking public listing.
Calling for change
UK Finance also suggests introducing government-backed funding schemes and innovations, such as strengthening the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS), ensuring longevity beyond 2035 while reviewing funding limits and access requirements. Expand support for companies being spun out from university research (‘spin-outs’) to fuel the next wave of UK success stories.
By establishing regional hubs, UK Finance says the UK can help start-up CEOs navigate investor negotiations, commercialisation, and UK tax incentives.
“Our capital markets are vitally important to the economy – powering homeownership, driving business growth, and securing our financial futures,” explained Conor Lawlor, managing director of global banking, markets and international affairs at UK Finance. “We have a world-class ecosystem of public and private markets, and a real opportunity to strengthen the way they work together to support the most innovative companies and national projects.
“By harnessing the full potential of private markets alongside public markets, we can ensure businesses of all sizes have access to the capital they need to scale. This report makes clear; the tools to build stronger, more dynamic capital markets are already in our hands. Now is the time to use them.”
Sealing new partnerships
The report comes at the same time as Capital.com, the high-growth global trading platform and fintech group whose trading volumes surpassed $1.7trillion in 2024, joins TheCityUK and UK Finance.
Through these strategic partnerships, Capital.com says it aims to help advance the UK financial services and fintech sectors, advocating for forward-thinking financial policies, and leveraging technology to drive sustainable growth in financial services.
TheCityUK champions the UK-based financial and related professional services industry. Capital.com’s membership of TheCityUK aligns with its objectives, pushing for policies that enhance the sector’s global competitiveness, boost job creation, and support long-term economic resilience.
By joining UK Finance, Capital.com will look to engage with key stakeholders, adopt best practices, and make markets more accessible, transparent, and efficient for retail investors.
Rupert Osborne, UK CEO at Capital.com, commented: “As a global fintech company with a strong presence in London and other financial hubs, Capital.com is well-positioned to contribute to the UK’s status as a leading tech and financial services powerhouse. By working closely with industry bodies, we aim to drive innovation, enhance financial literacy, and support the UK’s position as a global leader in fintech. We look forward to contributing to the vital work these organisations do in promoting the UK’s financial and professional services industry, driving economic growth, and supporting sustainable development.”
