Beauty Tech listing is a rare ray of light in IPO window

Beauty Tech Group’s proposed float is modest compared with recent US listings, but would still help to relieve a drought in the UK’s IPO market. In time, some believe the slow drip could become a steady flow.

“There are a number of companies that remain keen to list and are watching closely to see how the deals first out of the blocks are received by the market,” said James Wootton, corporate partner at Linklaters. “The success of processes under way at the moment, such as Beauty Tech, will be a small but important sign of how this IPO window is likely to play out.”

London IPO fundraising fell to £8.8bn in the first half of 2025, its lowest in 30 years. Swathes of City advisers are stuck in limbo, relying on private deals and share sales to bring in fees. It’s not clear the worst is over.

Institutional investors are dumping shares in UK companies at the fastest rate in more than 20 years, according to Bank of America’s recent fund manager survey. Petershill, a private equity fund backed by Goldman Sachs, announced last week it would delist from the LSE. And executives at major corporations such as Eli Lilly and BT slammed the UK business environment and “government-inflicted costs”.

However, bankers and advisers are expressing confidence that this could change. “We need to get the budget out of the way for UK companies, because that uncertainty doesn’t help,” said Charles Hall, head of research at Peel Hunt, but he added there was “pent-up demand” that would probably come to market in the second half of 2026, with a “smattering” before then.

Prospects include Newlat, the Italian group that owns Princes Foods, which had laid the groundwork for a London IPO expected in 2026 that could fetch £700m; Ebury, a cross-border payments company owned by Santander, which is planning to revive a £2bn London float in spring 2026, according to Sky; Shawbrook, a specialist bank understood to be preparing a float targeting £2bn (it also approached Starling this year about a merger); and Visma, a Norwegian software firm specialising in accounting, payroll and HR, which was valued at €19bn (£16bn) in a funding round two years ago. The latter would be a blockbuster win for the UK, given recent spurnings by large tech companies, notably Arm.

The government has also made committed attempts to woo fintech companies based in the UK to take the plunge and list in London. So far the response from the likes of Cleo, SumUp, Monzo and even Revolut (which last week unveiled a £3bn investment in the UK) has been calculated fence-sitting. Banking licences, in their eyes, should be forthcoming if the UK wants to avoid further exodus to the US.

What could change? “The siren call of the US is not as strong as it was,” Hall said. “But we have to be on the front foot, making it clear that we want to support UK IPOs.”

Accelerated pension reform is the obvious answer. A report released last week by the New Financial thinktank found the allocation to UK equities by defined contribution funds has fallen from about 40% to just 4.9% in little more than a decade, along with a vast disconnect between how much those surveyed expected their pension to be invested in the UK stock market (on average about 41%) versus how much is (between 1% and 9%).

Another solution is to open up the remit of the British Business Bank – a quasi-governmental body capitalised with £25bn to invest in venture capital – to support IPOs. This could help “crowd-in” capital from sovereign wealth funds and enable pensions to better deliver on investing domestically, as per their Mansion House Accord promises.