Some of us are looking at the stars

What impact could the proposed PISCES platform have on growth businesses?

Hello Rainmakers,

Today’s post looks at the efforts of policy makers and the London Stock Exchange to stimulate interest in growing companies.

That’s got to be a good thing, right?

So here we have PISCES, a share trading platform for private companies.

Part of me thinks it’s an elegant solution to a problem that doesn’t exist.

But let’s hear the case for action as well.

Floating your business on the stock market used to be seen as the fulfilment of a business dream come true. The public profile, the accolades and the step into the big world for a company, whatever its roots.

But the London stock market has taken a battering over the last few years.

Not only are UK pension assets less likely than ever to invest in UK equities, but if you believe the rantings of certain jaded founders, the market simply doesn’t understand the entrepreneurial growth mindset and uses nefarious tactics to trap the unwary.

Last year only Applied Nutrition and Raspberry Pi could be held up as successful floats on the London market, while a steady stream of regional players formed an orderly queue to leave the market for a quieter private future. It’s assumed that many more will follow.

The stepping stone to a full listing used to be AIM - the Alternative Investment Market - a slightly lighter regulated market where buccaneering brokers and entrepreneurs could raise some money and get a business used to the rhythms of life on a public market.

But the last year has just seen more and more bad news for AIM. The total number of companies on the junior market at the end of 2024 hit the lowest level since the end of 2001 at 688 stocks, a far cry from the near 1,700 seen at its peak in 2007.

Furthermore, 2024 saw the second lowest ever number of IPOs since AIM launched 30 years ago in 1995.

So not only does the pipeline for the stock market need pumping. So too does the flow of money to growing businesses. Afterall, doesn’t the government want economic growth to be its highest priority?

Part of the solution is PISCES. Not just a corny horoscope reference, but a new trading platform for private companies to trade their shares, without having to float and endure the terror of daily market movements. It stands for Private Intermittent Securities and Capital Exchange System (PISCES) and in the words of the Financial Conduct Authority, which is running a consultation on it:

"PISCES will open the door to more opportunities for investors to take stakes in private companies. Greater confidence to invest in these companies will lead to more funding to help them to grow and scale up."

I’ve heard the highly sceptical arguments about it as an initiative. Afterall, there are already the likes of Assetmatch and JP Jenkins which trade private company shares in a limited way. If you are missing the roller coaster of indecipherable medical announcements from REDx Pharma on any regular news service, then that’s where you’ll find them now.