New tech fund can help revive the London market for listings

THE saga of chip designer Arm’s move to New York has triggered much soul-searching about the future of London as a home for tech businesses, and its destiny as a capital market more generally.

- Steve Fine

Despite the lobbying efforts of politicians up to the Prime Minister himself to get them to stay and relist in London, the departure of a Cambridge-based UK champion has assumed totemic significance and caused much wailing and gnashing of teeth.

In my view, a sense of perspective is helpful here as Arm shares begin trading this week. Of course, tech owners want to chase the bigger valuations in the US, although the Arm experience dents that case slightly: the company is raising less money at a lower valuation.

The grass generally isn’t always greener across the Pond either, as research from Lazard found earlier this year: of 22 UK businesses that listed in the US in the past 10 years, only three are trading above the offer price, with average investor losses of almost 40%. Cyber security firm Darktrace, one of the bigger London tech floats of the last couple of years, is up more than 50%.