This week The Armchair Trader had the opportunity to speak with Sam Smith, CEO of finnCap, the largest adviser on the London Stock Exchange and the number one broker on the AIM market, with over 140 staff. It was an ideal opportunity to go over some tough questions being asked of the market and the City by Brexit and by the COVID pandemic.
Smith established finnCap in 2007 after orchestrating the partial buyout of the corporate finance and corporate broking business of JM Finn & Co, a private client stock broker. Since 2011 finnCap has been focusing on adding additional services to its offering, beyond its services to microcaps. It has a market making team, an investment companies team and a private fund raising advisory team.
In late 2018 finnCap announced its intention to acquire Cavendish Corporate Finance, the leading UK M&A adviser to vendors of businesses with an enterprise value of up to £500m. The company also floated on AIM in December 2018 and began trading as finnCap Group.
What’s on the podcast?
In this podcast we cover a range of topics that will be of interest to active investors in the smaller end of the market, as this is where Smith and her colleagues have decades of experience. We discuss the impact of the coronavirus and the rise of the small but dynamic pharma companies that have been developing solutions in areas like COVID testing and the quest for treatments.
In the wake of the GameStop share trading frenzy, Smith also focuses on higher levels of retail investor participation, necessary reforms to the market to make it more accessible for smaller investors and the overall health of the IPO market – which sectors does she see the most flow coming from in terms of new listings?
Brexit is also discussed: we chat about the likely impact of the departure of the UK from the European Union, especially on the listings business. Smith speaks about the health of the IPO market and some of the more dynamic sectors we have seen on AIM in 2020, including life sciences and industrial technology.
ESG is also now a big theme with investors and we go into the likely demand from investors for better ESG reporting from companies, and what this means for companies in areas like mining and oil and gas. Smith calls this a mega trend, and we would agree. She argues on the podcast that companies that neglect this area run the risk of becoming uninvestable in the future and talks about finnCap’s partnership with World Wide Generation to enhance ESG reporting for smaller companies.
Finally we look at the relationship between private equity and the IPO market and the disparity in pricing between IPO prices and pre-market prices. Our thanks to Sam and the team at finnCap for an enjoyable and interesting discussion.
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