Exodus! FTSE350

This is what should be on every investor’s mind but seems to get almost no coverage in the wider press. The UK stock market is slowly being sold off to private equity. This has been going on for some time and doesn’t seem to be slowing any time soon. It partly stems from UK pension funds retreating from UK equities — defined-benefit schemes de-risking into bonds as they matured and closed, and the wider shift to defined-contribution schemes whose default funds hold very little UK stock. Pension funds owned about a third of the UK market in the early 1990s; today it's under 2%.

The last chancellor tried to address some of these issues - but why should the chancellor tell people where to invest their own money? There are I agree though some changes around the edges which could be addressed. Scrapping the 0.5% stamp duty would be a good start.

If you think that this is an investment opportunity to spot the next target, well good luck. But long term we will be looking at a smaller investment pool and the UK stock market will find it increasingly difficult to retain top quality listings. Already this year we have seen the likes of WISE move its primary listing to the Nasdaq and Shell have made some noises.

The table below gives a list of takeovers completed or going through this year. Some of these are major listings and most are being taken private by foreign interests. Some would point to this and say it shows that the UK is open for business investment and that is a good thing. However that would be great if we also saw an equivalent number of IPOs coming to market, but we don’t. The pipeline coming in is very thin.

The scoreboard

Every FTSE 350 constituent sold or in play this year, largest first: