Peel Hunt IPO Speedometer – ‘Selectively open’

  • Today, we launch the ‘Peel Hunt IPO Speedometer’, which, based on a proprietary model with over 30 qualitative and quantitative inputs, gives a numerical score (0-60mph) for the health of the UK IPO market. 

  • This month, the speedometer shows a speed of 24mph, putting it in second gear or identifying the market as “selectively open”. The speedometer has accelerated over recent months.

  • The key drivers of the model this month were: an uptick in European IPOs (a lead indicator for the UK), positive broader UK ECM activity and performance, and an improving overall fund flow picture (albeit not yet in the UK).

After another difficult year for UK IPOs in 2023, the early indicators for 2024 are more positive. We are some way away from a broad IPO market re-opening but are starting to see a building UK pipeline and a market that is currently open for select issuers. We expect there to be an increasing number of UK IPOs by 2H24, with a broader re-opening in 1H25.

The problem of not knowing. IPOs require a lot of planning, and a significant commitment of management time and money in their preparatory phase. Not being able effectively to evaluate whether an IPO window is open, or, more importantly, whether it will likely open / remain open / close in the short term, is a significant issue for private companies looking to float. To help solve this, we have launched the PH IPO Speedometer, which will be published on a bi-monthly basis, to give a quantitative assessment of the UK IPO market.

Early 2024 IPO indicators have been encouraging. There are over 30 quantitative and qualitative inputs into the PH IPO Speedometer, including fund flow data, IPO and broader ECM activity, investor feedback and sentiment scores, broader equity market performance and macro data. This month, the indicator shows a speed of 24mph, up from 15mph in January. The key drivers of the acceleration this month were an uptick in successfully completed European IPOs (e.g. Renk, Galderma and Douglas, as well as Air Astana in the UK) although with mixed aftermarket performance, positive broader UK ECM activity and performance, and an improving overall equity fund flow picture despite continued outflows in the UK.

Outlook for UK IPOs is gradually improving. Following difficult years for UK and European IPOs in 2022 and 2023, the early signs for 2024 are more encouraging. An increasing number of issuers are recognising this and starting early preparation work with accountants for a potential listing. After the increased European IPO activity in 1Q, a number of further deals are expected to launch across the UK and Europe over the coming months, and how they price and trade will set the tone for the broader IPO market. Assuming no new macro shocks or geopolitical crises, we expect there to be an increasing number of UK IPOs by 2H24, with the current expectation for a full re-opening in 1H25.


Background to the PH IPO Speedometer

The problem of not knowing

The period from starting IPO preparation workstreams with accountants to final pricing can take 6-18 months, depending on the state of readiness of a potential issuer. Throughout that preparatory process, not being able to effectively assess the state of the IPO market given the significant number of variables at play, is problematic (to put it mildly).

The solution – PH IPO Speedometer

To help solve this problem, we thought it would be valuable for potential float candidates and other market stakeholders to have a reasonably frequent, objective, quantitative and qualitative calibration of sentiment around the IPO market, both current and prospective. So, today we launch the first of our bi-monthly IPO sentiment updates. These updates will include a litmus test system to assess IPO market conditions at any point in time and, in doing so, provide a useful signal for private companies that might consider floating in the near future.

The analysis for the PH IPO Speedometer uses valuation tracking data, relative market performance metrics, institutional investor flow and retail trading data, economic indicators, quantitative and qualitative investor sentiment tests, and data on frequency and performance of recent ECM transactions to assess the state of the UK IPO market. Unlike traditional litmus tests, it will not be a perfect science – for example there will always be the potential for major global events to completely change the landscape – but the analysis should give companies and market participants an indication of how open or closed the IPO window is, or by how much conditions need to change for IPOs to become a possibility again.


PH IPO Speedometer scale


IPO market status

IPO market characteristics


Closed: “First Gear”

Market not open for IPOs, including Tier 1 assets


Selectively Open: “Second Gear”

Market open and receptive to deals, however investors remain circumspect and selective

Some combination of the following required: Tier 1 assets, attractive pricing/IPO discount, sensible sizing, significantly de-risked/cornerstones


Open: “Third Gear”

Regular flow of IPOs across sectors

IPO discount still typically required


Strong: “Fourth Gear”

Broader investor appetite and participation

Increasing deal sizes and further ability to do larger secondary offerings


Hot: “Fifth gear”

IPO market open for a wide range of companies

Relatively low IPO discount and opportunity to do large deal sizes


Methodology and inputs for the PH IPO Speedometer

In order to calculate the speed of the Peel Hunt IPO Speedometer in any month, we assess datapoints across eight main buckets, giving each bucket an overall score. These buckets are then split into primary and secondary drivers of the UK IPO market and a weighting (depending on their importance) is assigned to each overall score. This then provides us with the output in the 0-60mph range. The eight main buckets and their inputs include the following:

1.    Equity fund flows (primary driver)
a.    Investor inflows / outflows (both into UK and global funds)
b.    Number of firm UK public to private offers

2.    Volume and performance of IPO/ECM activity (primary driver)
a.    UK IPOs >£100m in last three months
b.    European IPOs >£100m in last three months
c.    Pulled UK / European IPOs
d.    Broader UK ECM activity

3.    General investor sentiment (primary driver)
a.    AI-driven assessment of Peel Hunt sales and research conversations to come up with a sentiment score

4.    LO investor engagement (primary driver)
a.    Evidence from Peel Hunt pilot fishing and early look processes that long-only investors are engaging on deals

5.    Market stakeholder objectives / expectations
a.    Evidence of shareholders (including private equity) of considering IPOs as a tangible exit route and willingness to trade at market levels
b.    Evidence of increasing IPO pipeline (e.g. feedback from accountants, press rumours, company statements)

6.    Equity market performance
a.    Absolute performance of FTSE 250, FTSE SmallCap and AIM100 vs global markets (S&P500, NASDAQ, Stoxx 600 etc.)
b.    Volatility – VIX and V2X levels and trends
c.    Forecast upgrades vs downgrades

7.    Macro backdrop
a.    Major UK and global economic indicators in last two months, e.g. real GDP growth, inflation, currency movements
b.    Political stability and outlook for positive regulatory change in listed markets

8.    Broader trading activity/market liquidity
a.    Overall trading volumes in secondary markets 


Key drivers of the model this month

Uptick in European IPO activity

Although the broader European IPO market has many differences to the UK (e.g. domestic investor bases, varying pipelines), we would expect activity there to be a lead indicator for the UK IPO market and to impact ECM investor sentiment in the UK.

There has been a strong increase in overall European IPO activity in 2024 YTD, with volumes up 205% YoY compared with 2023. Although there has been a strong increase in IPO volumes, it is worth noting that there has been mixed aftermarket performance, with four out of the six main IPOs trading up. This highlights the current selective nature of the European IPO market, with investors focused on best-in-class jumbo assets or small/mid cap assets in particularly attractive sectors/thematics, rather than Tier 2 assets at cheap valuations. It is also notable that a number of private equity-backed IPOs have come to market (e.g. Douglas, Galderma, Theon). There are a number of further high profile IPOs expected over coming months that will set the tone for the broader market.


European IPOs with deal value over £100m  

Source: Dealogic, 08 April 24


Positive broader UK ECM performance

ECM, and particularly IPOs, is a relatively cyclical product. When deals do well and investors make money, investors feel more confident to participate more broadly across products and require less of a valuation discount as an insurance policy.

We have seen a meaningful increase in broader UK ECM activity, with volumes up 105% YTD compared with the comparable period last year (source: Dealogic). Other than Air Astana, the activity has been focused on secondary selldowns (particularly jumbo ones) and primary capital raises, with an overall average deal size of £418m. UK ECM deals have been working well generally, with the majority of deals trading up.


UK ECM deals with deal value over £25m

Source: Dealogic, 08 April 24


Improving overall fund flow picture

Whilst the UK fund flow picture remains strained (March was the 34th straight month of outflows), the broader global fund flow set up has been improving, with North American funds attracting £1.8bn of new capital in March. Europe has also had a strong run of inflows in recent months (excluding the UK). However, these have dwindled in March. Although many of these fund flows have been concentrated (e.g. to North America), it is positive to see investors more positive on the equity product overall.

The outflow from UK funds limits firepower for domestic IPOs and means that companies that appeal to overseas investors have a greater pool of assets to target.


UK equity fund flows (£bn) 

Source: Calestone


Commentary on other inputs this month

  • Frequency of M&A deals announced – the heightened level of take private activity persists, with significant numbers of cash bids for UK mid and small cap companies continuing to be announced. This is not accelerating particularly, but the steady stream of take privates without equivalent new listings is continuing to reduce the number of companies that investors can invest in and is recycling cash back to investors for reinvestment. This helps to limit the impact of outflows from UK equity funds.
  • Improving macro – across a number of datapoints, e.g. weakening inflationary pressures, sterling stable/strengthening against dollar, relatively predictable UK political outlook (particularly compared with the US).
  • Engagement from investors in early look meetings – we are seeing full early look marketing schedules with quality institutions that are providing constructive feedback and a willingness to be considered as cornerstones.
  • Qualitative sentiment score – AI-screened sentiment scores from our wide-ranging conversations with investors suggest that the negative mood is cautiously lifting, notwithstanding that the relative number of downgrades remains high and the economic outlook continues to be uncertain.
  • Market performance – the key main-market indices for companies looking to float are marginally ahead for the year, with the FTSE 250 +0.4% and the FTSE Smallcap +4%. However, the AIM 100 is 3% lower YTD.
  • Forecast momentum – the trend in earnings for Peel Hunt coverage continues to be negative, with a reading of -21 in March. This reflects pedestrian economic growth, weak consumer spending and higher finance charges.


Peel Hunt forecast upgrades and downgrades 

Source: Peel Hunt Research, forecast upgrades and downgrades for all companies under Peel Hunt Research coverage


Valuation: Global benchmarking and scarcity are key considerations

One theme we have consistently observed in recent years is the benchmarking of UK IPOs against US and international comps by investors. This continues to be the case in the ongoing early look and pilot fishing processes we have been running for potential upcoming UK IPOs. Additionally, we have observed strong scarcity value for quality companies that come to market given the perceived lack of supply of those by investors. This has resulted in the following:

  1. There is significant demand for genuinely differentiated companies that list in the UK.
  2. Particularly where there are relevant international comps, UK-listed companies will not be ‘bogged down’ by perceived lower valuations in the UK. The greater focus is on finding the correct global comp set, rather than benchmarking to the local exchange. This is a dynamic that we expect to help some of the early movers in the next wave of UK IPOs.


Potential UK IPOs

The following companies are rumoured in the press to be considering a UK IPO over the short-to-medium term (with many considering other exchanges too).




The Times

Applied Nutrition

Sky News




The Insurer






Sky News


Financial News

Raspberry Pi




Starling Bank

Finance Magnates

Thought Machine


Unilever Ice Cream







The Times