Could the green shoots of growth come from space?

For much of the past three years, London’s equity markets have been defined by survival rather than renewal. Capital raising on the London Stock Exchange (LSE) has slumped to historic lows, liquidity has been sparse, and a steady stream of high‑profile companies have opted to delist or pursue growth capital overseas. In 2025 alone, UK equity fundraising fell to its weakest level in three decades, cementing concerns that London risked losing its edge and international competitiveness.

Yet in early 2026, there are signs that the narrative may finally be shifting. Regulatory reform, improving sentiment, and a small but growing number of successful fundraises suggest the foundations for recovery are beginning to solidify. Among them, Seraphim Space Investment Trust’s (SSIT) recent £137m C‑share fundraise stands out as a powerful case study.

The causes of London’s fundraising drought have been discussed at length over recent years. To recap, persistent valuation discounts compared to US peers have discouraged boards from issuing equity at prices they see as punishing. Chronic liquidity constraints have created a self‑reinforcing “chicken‑and‑egg” problem: low trading volumes deter new investors, while the absence of new investors further depresses volumes. Layered on top has been a difficult macroeconomic backdrop, with global volatility and geopolitical uncertainty dampening IPO activity worldwide, not just in the UK.

The result has been an erosion of confidence. High‑growth companies, in particular, have looked across the Atlantic for deeper capital pools and more generous valuations, accelerating the perception that London is no longer competitive.

At times like these, regulatory and structural reform has taken on heightened importance. Over the past 12 months, UK authorities and the LSE have pushed through a raft of changes such as the new ‘Public Offers and Admissions to Trading Regime’ (POATR), which raises the threshold for a prospectus in secondary fundraises to 75% of existing share capital. In practical terms, this lowers costs, shortens timelines, and gives boards greater confidence to act when market windows open.

It is against this challenging backdrop that Seraphim has – in the last week – taken advantage of these changes and completed the largest London‑listed investment trust fundraise since 2023. The £137m C‑share issue, which closed in early May, drew capital from a broad mix of institutional and retail investors and provides a rare, but very welcome example of scale returning to the UK equity market. Importantly, the raise was not an isolated success for Seraphim, following on from several uplifts to its net asset value. The positive read‑across reinforced confidence in Seraphim’s portfolio and validated its long‑term investment thesis in space and geospatial technologies.

Analysts were quick to note the wider significance. Panmure Liberum highlighted the trust’s resulting “formidable war chest” and growing scale, and QuotedData added “In extremely difficult market conditions, SSIT has managed to bag the largest fundraise by an investment company since 2023.” From a market confidence perspective, these messages matter: they signal that investors are once again willing to back ambitious growth strategies through London rather than despite it.

Seraphim’s raise does not, on its own, mark a full recovery for UK equity markets. Volumes remain subdued, sentiment fragile, and selectivity high. But it does serve as an important proof point. The road to a recovery is still a long one, valuation gaps will not close overnight, and international competition for capital remains intense. But so far, 2026 has felt different in tone to the years that preceded it.