Our BDO UK Capital Markets Insights report analyses activity on AIM and the Main Market of the London Stock Exchange on a quarterly basis. We review transaction activity such as IPOs, fundraises, sector trends and significant deals.
In this update, our Capital Markets team digests Q1-22 in this interactive overview.
Following a strong year for the capital markets in 2021, the first quarter of 2022 has been rather turbulent. Fundraising across both markets was impacted by geopolitical events in Ukraine.
In addition to global headwinds, heightened domestic concerns over inflation and the threat of a future UK recession further suppressed performance across both markets.
As a result, funds raised on the Main Market were the lowest since Q1-20 and for AIM the lowest since Q3-19. For context, both of these comparative periods were impacted by uncertainties relating to Brexit. Average fundraises across both markets were significantly lower than the preceding six quarters, with no transactions greater than £300m in size across either market in this period.
Despite this, there were still some positive signs for the UK markets. The FTSE fell less overall in Q1-22 than other major international markets and both the AIM and FTSE All-Share recovered somewhat into April 2022, albeit this has not been sustained into May.
Despite economic headwinds, a significant number of Q1-22 fundraises were driven by funds looking to invest in companies across the technology, renewables, real estate and natural resources sectors, suggesting that investors were still willing to back certain sectors. Furthermore, it appears that the investor community still has capital to deploy and, while the market for fundraises and new IPOs is expected to remain quiet in the immediate short term, we are aware of a queue of private businesses positioning themselves to IPO once the markets settle.