Technology has transformed the capital raising landscape
Institutional shareholders are keen to support strong, viable ongoing businesses but companies who have had challenged business models will struggle to raise capital.
A huge fundraising effort is underway for listed companies
In 2008, fundraising volumes spiked to £70bn in the UK and the recapitalisation programme took 2 years. This time around it is happening much quicker. The upcoming funding requirements will need a large pool of liquidity and retail investors can be a great source of capital.
Retail investors are driving volumes in the secondary market
Retail investors are showing unprecedented levels of support for UK PLCs. The London Stock Exchange are seeing record high secondary trading volumes of £10-12bn per day – triple the regular volume.
The Pre-emption Group released a statement supporting non pre-emptive capital raises up to 20% in order to help companies raise capital due to the pandemic
Soft pre-emption rights need to be observed, however, and the technology is now available to include retail investors alongside institutions.
Liquidity, particularly in the mid and small cap space, is one of the biggest issues in the capital markets
This has been driven by consolidation in the Funds market and retail investors can be a key solution to help.
Retail investors are loyal and have on average have a 70/30 buy-to-sell ratio
In the current crisis we need to need to ensure money is deployed where it is needed most. Retail accounts for a large pool of capital and will put it to use if there is opportunity.