It seems we may be at an inflection point for investor appetite for IPOs in the UK, with the opportunity for exit through an IPO becoming more difficult.  

To date, 2021 has been a buoyant year in the UK IPO market, with the first three quarters of this year outstripping the whole of 2020, with well over £13 billion of funds being raised across the Main Market and AIM. The number of companies opting for an IPO in the UK this year is the highest since 2014 and we have seen 20 "founder-led" businesses, a traditional staple for UK private equity investment, join the market so far this year. Mid-market private equity has also benefitted from the IPO market with listings such as NVM backed Music Magpie and Connection Capital backed Virgin Wines. 

However, it is clear the IPO market is proving more challenging with reports that high quality companies such as Marley, Hawksmoor, PureGym and now Yo! Sushi have postponed plans to IPO due to investor sentiment, which has not been helped by the high-profile concerns over the Hut Group listing.

If an IPO exit is a less attractive option for business owners, then this is likely to further fuel the UK M&A and debt funding markets as business owners continue to seek a capital event or the raising of additional capital to drive growth. Appetite from both private equity and trade buyers continues to remain strong for high quality businesses, and the credit markets continue to be generally supportive, so the focus may be about to shift back to the private markets and help continue the strong levels of activity in the UK M&A market well into 2022.