Public market shrinkage continues to push pivot to private

Yasmine Raso

Senior Journalist, Financial Newswire

14 October 2024

The latest Australian Securities Exchange (ASX) Monthly Activity Report has confirmed the number of listings on the exchange has fallen by 95 companies in the last 12 months.

The total number of companies listed on the ASX declined from 2,219 to 2,124, with only 15 new listings recorded in the last 12 months to 30 September and 46 delistings.

According to analysis from global investment manager, EQT, this trend indicates the ongoing shift away from participation in public markets and towards the growth opportunities in private markets.

“The shrinking number of public listings reflects a larger shift in how companies choose to grow and access capital,” Martin Donnelly, Managing Director of Client Relations at EQT Capital Raising, said.

“For investors, this means they need to expand their horizons beyond traditional public markets and look at the opportunities in private markets, which are becoming a critical source of innovation and value creation. Private markets offer access to dynamic firms that may never go public, presenting growth potential that is often overlooked in today’s environment.”

EQT said more companies view private markets as the “more efficient and flexible” option for their capital raising activity, public markets suffer through stricter regulations and growing compliance requirements. According to data from JPMorgan, the number of private companies supported by private equity firms has soared from 1,900 to 11,200 in the last 20 years.

“Private markets have evolved into a vital part of modern investment strategies, not only for portfolio diversification but also as a driver of sustainable, long-term wealth creation,” Donnelly said.

“With fewer public companies to choose from, investors can no longer rely solely on public markets for growth. By tapping into private capital, they can gain access to innovative sectors and high-growth opportunities that offer more resilience and less exposure to market volatility.”