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City stockbrokers Panmure Gordon and Liberum have agreed to merge as a dearth of listings and deals forces the industry to consolidate.
The companies said on Tuesday that combining would create a business with more than 250 clients, providing everything from advice on acquisitions to equity research.
Rich Ricci, chief executive of Panmure Gordon, will lead the new business while Liberum founder Shane Le Prevost will be its chair.
Since 2018, Panmure Gordon has been owned by former Barclays chief executive Bob Diamond’s investment group, Atlas Merchant Capital. Liberum is owned by its employees.
“This merger will lift the level and quality of service to mid and small-cap
businesses and investors in the UK and beyond,” Diamond said in a statement.
The new combined company plans to expand its offerings in merger and acquisitions and private capital raising, with new services set to include debt advisory.
Brokers reliant on London’s midsized companies have faced a challenging backdrop as the market has been hit particularly hard by the global drop in initial public offerings and dealmaking.
The London stock market saw just 23 issuers listing in 2023, according to data compiled by EY. Combined, those groups raised £953.7mn in total, down 40 per cent from the previous year.
Panmure Gordon swung to a loss of £16.3mn in 2022 as revenues plunged 43 per cent to £27.6mn, according to its latest annual accounts. That came after it turned its first profit under new ownership of £3.1mn in 2021.
Liberum said 2022 was “an unprecedented year”, posting an £8.4mn loss as revenues halved, compared with £5mn of income in the previous year.
The grim market conditions have already prompted several deals, including the merger of UK small-cap brokers Cenkos and FinnCap in March last year. In April, Deutsche Bank agreed to buy the UK broker Numis for £410mn.
Panmure previously held merger talks with FinnCap before the negotiations collapsed in November 2022. It also acquired small-cap broker Whitman Howard in 2020.
Liberum and Panmure each have roughly 150 employees with teams across investment banking, research, sales and execution.
Liberum was founded in 2007 while Panmure Gordon’s history dates back to 1876. Panmure has traded hands numerous times in its existence, including an acquisition by Lazard 20 years ago.
Additional reporting by Michael O’Dwyer
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