Corporate Broking in the UK is set to outperform amid surge in issuances due to COVID-19

The COVID-19 pandemic and associated lockdowns have led to unprecedented market conditions, with economic activity coming to a near standstill in the UK. While sales have plummeted across sectors, financial commitments to vendors, staff and lenders still need to be honoured, depleting cash reserves and constraining liquidity. UK corporates have, therefore, resorted to emergency fundraising via large equity issuances to improve liquidity and capital positions. In the largest and most notable recent equity issuances in the UK, corporate brokers also functioned as joint global coordinators/joint book-runners in a highly competitive market.

This insights paper highlights the uniqueness of corporate broking services in the UK and their evolution. It also aims to analyse demand for corporate broking services in the UK since the start of the pandemic and the outlook for the industry in the UK. The positive outlook stems from supportive government regulations and the substantial increase in equity follow-on issuances due to emergency funding and prospective growth-related funding needs that have increased demand for corporate brokers.

Key Takeaways

• Corporate broking services continue to gain prominence in the UK due to regulatory and structural reasons
• Demand for corporate broking services is likely to continue increasing amid the current uncertainty and supportive government regulations
• Corporates have injected significant amounts of emergency funding so far in 2020 to boost liquidity and capital positions; they are also likely to raise more funds for growth and expansion, keeping corporate brokers busy