Samuel Johnson’s* assertion that if a man is tired of London, he is tired of life, “for there is in London all that life can afford”, still stands true today, with one great exception. When a company is tired of London, it’s because London lacks all that life can afford. In particular, capital and research.
From these deficiencies, a host of other issues follow, including discounted valuations, takeovers, departures and a reluctance to list in the first place. Companies know what lies ahead if they take that path: paucity of coverage and a valuation that is likely to fail to reflect their worth and potential. It’s an unsatisfactory situation and one that has spurred regulators, government ministers and other involved parties to act.
The problem – let’s call it a depression in equities – is not unique to London. The EU is also threatened by a lack of adequate financing for its growth companies, and by the magnet-like draw of the US market. New York has its flaws but it certainly pulls in the crowds, whether that’s investors with deep pockets or listings – Spotify, to take just one example, is not an American success story; it started life as a small Swedish start-up.