London’s initiative to revive its struggling IPO market has primarily attracted smaller enterprises like the mini-computer manufacturer Raspberry Pi and MHA, the UK subsidiary of Baker Tilly. However, bankers are now eager to facilitate larger listings.

Shein has transferred its public listing efforts from London to Hong Kong, raising questions about the next significant IPO opportunity.

Sources within the City are increasingly asserting that the resurgence of the IPO landscape will be spearheaded by some of the largest private equity firms in the world. Banking insiders have conveyed to The Times that these investment entities are eyeing public markets as an exit strategy, particularly since several of their assets are too substantial to divest through peer sales.

Moreover, institutional investors appear open to considering larger firms as IPO candidates because these assets can furnish a desirable level of liquidity for their equity portfolios.

A banker noted that there is often more apprehension surrounding the listing of smaller companies due to liquidity concerns and the potential volatility of their stock prices post-IPO. Major private equity players like KKR, Blackstone, and CVC face mounting pressure to effectively sell assets and deliver returns to their fund investors, with London’s market becoming a focal point for some expected IPOs.

The Access Group

Based in Loughborough, The Access Group completed one of the largest private equity funding rounds in the UK when it secured additional backing from key investors Hg Capital and TA Associates, which valued the firm at £9.2 billion in 2022. This investment round also allowed Singapore’s GIC to join as a minority stakeholder.

The company specializes in software services for HR departments and employs around 7,500 people across the UK, Ireland, the US, and the Asia Pacific region, where it is currently expanding, recently advertising for a role focused on M&A transactions in Kuala Lumpur.

For investors, The Access Group presents an opportunity to engage with a technology firm that has shown considerable growth through investment and has a track record of consistent profitability, addressing common worries about fast-expanding tech companies that have yet to establish a stable business model.

In the year ending June 30, 2023, The Access Group posted an operating profit of £35.9 million, though it faced a £26.6 million loss the following year due to a higher-than-anticipated accounting charge related to an acquisition.

The firm will need to assure investors that it is not overextending in its M&A activities, but the London market would likely welcome a successful listing from a global technology company that is a significant local employer. The owners of The Access Group must now decide whether to continue funding its expansion independently or to pursue public market investment.

Söderberg & Partners

Söderberg & Partners, a prominent insurance broker in Scandinavia, has been capitalizing on private equity for its growth in the UK and Spain. KKR acquired a minority stake in the company from TA Associates in 2019, valuing Söderberg at slightly over $1 billion.

Founded in Sweden in 2004, the company operates across seven nations and employs approximately 1,800 staff. Söderberg has been broadening its presence in the UK by acquiring minority interests in more than 20 independent financial advisor firms. The company received additional funding of £171.4 million from KKR in June 2023, and a further £225 million from KKR and TA Associates in July 2024.

CEO and co-founder Gustaf Rentzhog expressed enthusiasm about the UK market upon KKR’s second investment, highlighting the UK wealth management industry’s value of £10 trillion. Will this asset manager turn to UK public markets when seeking more capital?

SHL Medical

SHL Medical, known for its innovative drug delivery systems, has gained renewed attention recently due to the surge in popularity of weight loss drugs like Ozempic and Wegovy.

Established in 1989 by Swedish entrepreneur Roger Samuelsson in Taiwan, EQT, a Swedish private equity firm, took a minority stake in SHL in 2020, valuing it at $2.1 billion. The company possesses proprietary intellectual property that it claims creates high barriers to market entry, positioning it well to capitalize on the demand driven by the Ozempic phenomenon.

Athos, a Munich-based family office, joined a cohort of undisclosed co-investors providing additional funding to SHL towards the end of 2022, which supported the firm’s growth. This funding round saw SHL’s valuation soar by 62% to $3.4 billion.

With operations across Europe, Asia, and the US employing over 6,000 people, SHL’s move towards public markets could generate significant interest across multiple jurisdictions, benefiting Samuelsson, who retains majority control.

Breitling

CVC is assessing various exit strategies across its Strategic Opportunities fund, launched in 2014. The firm seeks to divest Moto Hospitality, a UK operator of service stations, and Teneo, a restructuring and communications firm acquired in 2015 and 2019, respectively. The fund also recently achieved a partial exit by selling shares of Gems Group, a Dubai-based educational network, to a consortium led by Brookfield Asset Management.

Breitling, the renowned luxury watchmaker, is among the largest assets in CVC’s portfolio. Its timepieces can be priced up to £18,000, appealing to elite athletes and celebrities including Brad Pitt and Charlize Theron. Three years ago, CVC reduced its stake in Breitling to 23.6% by selling part of it to Partners Group and others, giving the watchmaker a valuation of $4.5 billion. Speculation suggests that an IPO for this luxury brand could occur in 2027.

Flender

Flender, a German manufacturer of electrical drive systems utilized in various mechanical applications, has maintained its status as a leading player in Europe with over 125 years of history.

Headquartered in Bocholt, Germany, with a workforce of approximately 9,000 operating across 35 markets, Flender was sold by Siemens to the Carlyle Group, an American private equity firm, amid a surge in M&A activity in 2021.

Carlyle acquired Flender for about €2 billion, with the company’s valuation reportedly around €4 billion today. The London market has proven to be an accommodating environment for significant manufacturing enterprises, with notable representation in the sector.

As European nations increase military spending, the manufacturing emphasis in the UK market is fueling growth for listed companies. However, firms like Rolls-Royce and Melrose Industries experienced market fluctuations following trade tensions, introducing a level of uncertainty should such discussions reignite.

As global investors continue to identify UK stocks as undervalued, as noted by prominent figures like Larry Fink, Carlyle may consider London the optimal destination for their German gearbox enterprise.