A panel at the Citi Investment Conference in Sydney discussed why they believed the number of companies opting to list in Australia was declining.
In 2021, there were 241 new listings on the ASX but in 2024, this had fallen dramatically to just 67 initial public offerings (IPO). When it came to fundraising, this had declined from $4.7 billion to $4.1 million over the same period.
ASX data showed 86 companies have delisted from the ASX in the past six months with the number of listed ASX companies falling from 1,985 at the start of 2025 to 1,919 in September.
Amanda Isouard, partner in M&A at King & Wood Mallesons, said: “There’s a lot of regulation, a lot of compliance obligations and the costs associated with that to list on the exchange.
“If you want to do a listing, there is quite a gap here in Australia between the time of pricing and the IPO of about 2.5 weeks whereas in the US, you price one day and trade the next.”
Tony Duthie, head of private equity at Pacific Equity Partners, said his firm hadn’t done an IPO since 2016 and said it was “rare” that an IPO would be the best option. Instead, his firm would consider options such as private trade sale, sponsor sale or a dual-track exit.
“Pre-2016, around 35–40 per cent of our exits were IPOs but we haven’t’ done since then, something has changed. I think it’s a regulatory issues, there’s market issues,” he said.
“It’s rare that we go into an investment where an IPO would be the only option as it’s just too flighty quite frankly.”
Another factor was around remuneration and board and share approval with listed firms wary of falling foul of the two-strike rule. This rule allows shareholders to influence board remuneration decisions by voting against the remuneration report. If more than 25 per cent of shareholders reject the report, this is the first strike, and if they subsequently reject it in the following year, this triggers a spill where new board members can be elected.
In November 2024, Platinum Asset Management received a second strike after 73 per cent of shareholders voted against the remuneration report. This was in response to concerns about ongoing underperformance and misalignment between pay and poor performance. Although it avoided a board spill, Platinum reviewed its key performance indicators and reduced variable remuneration.
Isouard said: “Another thing on the table is remuneration, they are worried about the two-strike rule, they worry about executive remuneration and they are conservative. So if you’re a talented executive, you have the choice of a board that is gun-shy in what they want to pay you or you can go down the private route or go overseas, so that’s another problem.”
Duthie agreed: “We’ve definitely seen a flight of very high-quality management from the listed world to the unlisted and it’s one of our challenges in trying to list is most of our CEOs don’t want to be in a listed environment. When we are considering options, their preference is definitely not to be listed.”
