Co-Founder @ Yorkshire AI Labs LLP | Revolutionising Venture Capital | Philanthropy
The UK small-cap market is on life support. In just five years, the number of companies in the FTSE Smallcap (excluding investment trusts) has collapsed from 160 to 102, with the market cap slashed from £55bn to £25bn. The entry threshold has nosedived from £149m to £75m. This is more than a decline—it’s a market failure. A once-vital engine for growth, innovation, and job creation has been gutted. Pension funds have abandoned British businesses, and policymakers have sat idle while our equity markets crumble. Enough is enough. If we don’t act now, Britain’s growth companies will vanish, leaving our economy weaker and opportunities lost. It’s time for bold leadership to fix this mess.
If you thought the Midcap was bad, then you don't want to look at the FTSE Smallcap. The market cap requirement for entry has dropped by 50% from £149m in 2018 to just £75m at the last review. This is due to the large number of exits in recent years, which can be seen clearly in the Smallcap index (unlike the FTSE 100 and 250, which obviously don't change in number). There were 160 companies in the FTSE Smallcap (ex investment trusts) in 2018 - there are only 102 today. Current m&a means that 9 more will leave next year. The market cap of the Smallcap has followed this dismal trend and is now only £25bn vs £55bn in 2018. This is a clear example of market failure and urgent action is required if we want the equity market to function for growth companies.
Nothing to do with Brexit whatsoever David!
Founder at The Bessemer Society
3dAre many small caps going private through PE backed MBOs and the like?