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Pisces: Is the future of public markets written in the stars?

City of London
By Anthony Hughes
25 January 2024
Private Capital
Financial Communications
current affairs
Co-written with Tom Haynes

Today, Bim Afolami, the new City minister, ushered in what he described as a 'renaissance' in the London capital markets with the unveiling of a new intermittent trading venue aimed at privately owned companies. The new trading platform called ‘Pisces’, that will allow investors in private companies to trade shares, is expected to come on-line by the end of this year. The thinking behind the Pisces platform is presumably to provide a bridge between the private and public markets, by setting private companies on the path to the public markets.

The UK, despite some negative expectations and wider economic stagnation in recent years, has remained an important global hub of funding for start-up and scale-up companies, with Venture funds performing well compared to European counterparts. Anecdotally, the SEC Newgate’s Catalyst team (which helps startup and scale-ups), has had conversations with overseas incubators who say that the regulatory, legal, business and funding environment is still seen as attractive for start-ups and scale-ups compared to other many other markets.

There is little information at the time of writing on the specifics of the Pisces platform beyond some Sky News reportage. The announcement comes as the UK’s public markets have seen a marked decline in recent years, with big tech company flotations and de-listings favouring overseas markets making the headlines. Several reasons have been identified for this decline in public markets by commentators like the UK Equity Markets Association which cite, among other things, regulation that stifles the appetite for risk and lack of retail investor engagement.  

At a Bloomberg event today, attended by SEC Newgate’s own Tom Haynes, Mr Afolami echoed some of those concerns, urging a shift in approach. In his speech he said that there was a need to move away from what he called a “culture of safetyism” around investment, across Government. He further noted that the Government and regulators need recognise there is no point in having the “safest graveyard” around, presumably referring to the current state of the public markets and that we have to “move from risk off, to risk on”.

Allowing retail investment in the Pisces platform would be an interesting step, as the surge in crypto currency investing (particularly by retail investors under 40) has shown there is an appetite for risk, despite the apparent Government adversity to it.

The political context of this announcement is interesting, particularly with an election looming large on the horizon, and the Government’s view that it needs to be seen to be making tangible progress from the diagnosis of the problem, with the Lord Hill Review in 2021 and last year’s Edinburgh Reforms, the Mansion House Compact and now the announcement of Pisces.

From the despondent look of some of the mid cap brokers in the room, the announcement had not done much to ease the current gloom. That said, whether or not the Pisces is the tonic that the UK’s capital markets needs, remains to be seen, but either way any efforts to reinvigorate London’s ailing public markets are desperately needed and very much welcome.