Insights

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


Authors

Rohit Sharma

Delivery Manager, CPB

Rohit Sharma has over 11 years of work experience in investment banking. He is leading ECM and Equity Advisory teams for a UK bulge bracket investment bank from past 9 years. He has a strong hold in ECM related work products which are used for corporate broking, deal origination & execution as well equity linked teams.

He has supported multiple senior investment bankers in preparation of investor decks including investor targeting, benchmarking, potential-blocks / stake sale analysis, deal case studies and sell-side research. In addition, he supports onshore Equity Advisory team catering to Utilities, Industrials and NRG sectors in providing strategic advice on matters related to their client’s market impact and communication. Prior to joining Acuity, he worked with a boutique firm for c.2 years where he was responsible in creating and maintaining financial valuation models with in-depth financial statement analysis. Rohit has cleared CFA Level 1 and holds PG Diploma in Financial Management and a Bachelor’s degree in Commerce.

Shreya Kaushal

Analyst, CPB

Shreya has been with Acuity ECM team since June 2020. Her current role requires her to handle assignments for bulge bracket investment banking client team on ECM & Corporate broking projects like industry research, investor targeting, ECM offering related case studies, benchmarking, corporate governance and block updates.

Prior to joining Acuity, she worked as an Audit Associate at Ernst and Young from Aug 2015 – Oct 2016, where she was working parallel with EY US Audit team and was responsible for performing General Audit procedures (Primary and others), preparing audit reports and schedules to be submitted to statutory body (SEC, PCAOB). Shreya holds PG Diploma in Finance from Birla Institute of Management Technology and Bachelor’s degree in Commerce from Delhi University.

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