Fewer than expected businesses race to beat general election with a moderate flurry of IPOs


Most market speculation about Q1 was at the bullish end of the spectrum, although some commentators were predicting that the London IPO market was set to enter the slow lane. The reality has been that the first quarter of this year has been good but not stellar, with fewer than expected businesses keen to get their floats away before the general election in May, according to EY’s latest IPO Eye.

  • 10 main market floats in Q1 - highest number of listings in a first quarter in over five years
  • Successful reattempts of Hungarian-based airline Wizz Air and challenger bank Aldermore – both experiencing strong post-trading performance
  • AIM has been subdued producing only five IPOs - down on the 16 in Q1 last year
  • PE-backed businesses continue to dominate, accounting for 90% of main market floats

The main market saw 10 IPOs this quarter, the highest number of floats during a first quarter for over five years, with private equity backing 90% of main market floats over this period. On the flip side, the Alternative Investment Market (AIM) had a more subdued quarter producing only five admissions, a significant reduction on the 16 admissions in the corresponding period of last year.

David Vaughan, EY’s IPO leader for UK & Ireland, commented: “In what is traditionally a quieter period for IPOs, this quarter has benefitted from a number of businesses keen to float before the general election in May. Activity leading up to and directly following the election is though set to slow leading to a significant dip in the number of floats during the second quarter.”

Return of the come-back kings

A particularly encouraging trend during the first three months of the year was the return of some businesses that tried, unsuccessfully, to list during 2014. The Hungarian-based airline Wizz Air and the challenger bank Aldermore both listed during Q1 and are now trading at 17% and 26% above their initial offering price, respectively. Post-trading performance for the main market remains steady with Q1 IPOs trading at a healthy average of 8% above their initial offering price.

“Timing plays an important role in the IPO process. The Wizz Air and Aldermore floats and subsequent positive trading performance demonstrate that that the market is open for quality assets at the right price,” added Vaughan.

AIM in the slow lane

AIM has had a slower quarter producing only five IPOs, significantly down on the 16 posted in Q1 last year. AIM admissions this quarter are experiencing greater volatility with the lowest trading at -38% on offer price and the highest at a 20% premium.

Vaughan continues, “There isn’t any obvious reason as to why AIM hasn’t had a busier quarter given that the upcoming general election was expected to encourage businesses to bring forward their float plans. It is quite possible though that many of these businesses have in fact postponed their admissions to later in the year after the post-election dust has settled.”

What does the post-election IPO world look like?

He concludes, “It comes as little surprise that the expectation for Q2 is for reduced levels of activity as a result of the general election. What is difficult to forecast is the effect that the election will have on businesses that plan to list later into 2015. If there is, as many commentators predict, a hung parliament the big unknown is what impact this will have on the wider IPO market. That said, the market was resilient in the later stages of last year and we still expect the right assets, priced appropriately to attract investor interest, regardless of the political landscape.”

*All data current as of Tuesday 24 March 2015


Hannah Forrester

EY Media Relations

+44 (0)121 535 2997

+44 (0)7900 703 020



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