Can corporate broking survive?
UK corporate broking is the business that won’t die. There is no requirement for it outside the smallest listed firms, and corporates the world over manage without it. Yet UK companies almost always want the reassurance it provides. Is it finally under threat?
As corporate brokers will tell you, there is a lot of nonsense talked about corporate broking.
To listen to its most traditional supporters, it is some quasi-mystical world where UK equity market wizards, sitting in serene isolation from their grubby transactional colleagues, drip long-learned lore into the ears of the country’s chief executives.
Others see it differently. If corporate broking is anything in the modern age, they reckon, it is simply the point at which corporate knowledge and strategic advisory meet equity market intelligence and distribution. To distil that even further – it is advice, and it always has been.
So why the peculiar reputation of the business as something unfathomable beyond the UK’s shores? Part of it originates in the traditional requirement for a UK-listed company to have a corporate broker to represent it to regulators. And although that persists among smaller firms looking to trade on London’s Alternative Investment Market (AIM), it no longer applies to big firms, having been partly superseded by the need for every listing candidate to have a sponsor.
But the lack of a formal requirement has not dimmed the appeal of the traditional corporate broker role to the UK’s top C-suites.