The UK's financial ecosystem is currently in a “Doom Loop,” according to a recent article by the UK investment bank, Peel Hunt. Facing what it describes as a relentless decline, companies are suffering from low valuations, diminishing liquidity, investor withdrawals, and a lack of enthusiasm for IPOs. Without swift and effective action Peel Hunt stated, the UK could lose a crucial part of its financial infrastructure, especially in the small-cap sector.

The IPO market looked set to recover after a rather lackluster year. However, the market took a downturn last week after shares in the German shoemaker, Birkenstock tumbled in its initial debut. Now called “one of the worst IPOs in recent history” by Reuters, Birkenstock is trying to get back on its feet after a rocky start, leading some companies to rethink liquidity goals, especially small caps.

As we enter the second half of 2023, the IPO market is beginning to show signs of recovery with renewed activity. After a notable slowdown last year, there have been several promising public offerings in the first half of this year. Notably, Johnson & Johnson's spinoff, Kenvue, which achieved a remarkable valuation of $50 billion following its successful IPO on the NYSE.