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How to save the Irish Stock Exchange

A focus on small-cap IPOs could help Euronext Dublin reinvent itself and provide a platform to build the next Flutter, Kingspan or CRH

There has been a lot of negative talk recently about the future of the Irish Stock Exchange. Officials in the Department of Finance even wrote a memo for Minister for Finance Michael McGrath, speculating that the Irish exchange could be entering a “phase of long-term decline”.

In this newspaper last month, Arthur Beesley reported that these concerns were based on what could happen when large companies like CRH (whose shares ceased trading in Dublin this week), Flutter or Kingspan left the Dublin exchange. In my opinion, the Irish stock market is entering a phase of terminal decline, unless it can replace these large-cap departures with a host of new, small capital IPOs (initial public offerings of shares).

Unfortunately, in the past 20 years, floating small-cap companies in Ireland has become extremely difficult.

Most people, including myself, have listed our companies on the London Stock Exchange, where there is a vibrant IPO market for small and medium-sized companies. I work with a range of legal and financial advisers in London. What I see is an adviser infrastructure that is open to small-cap IPOs. There are dozens of brokers and advisers who are enthusiastic for these investment opportunities.


This positive atmosphere is why London is a world leader for the listing of small-cap companies. There is no reason why Ireland shouldn’t try to emulate that success.

Not so many years ago, bookmaker Paddy Power, which later became Flutter, and Kingspan floated as small-cap companies in Dublin, as did other leading Irish businesses, including Ryanair. These successful stock market listings allowed these companies to grow extremely rapidly.

A vibrant stock exchange is a critical element for a country’s success. Many would argue that the economic success of the United States has a lot to do with its vibrant stock exchange and positive investment environment. Publicly listed companies historically generate more wealth for investors but they also tend to stay more grounded in the country they list in.

The senior management team and much of the central business activity tends to remain in the country of IPO. If it is no longer possible to IPO small-cap companies in Ireland then that will have lasting knock-on implications for our long-term indigenous job creation.

Many people will be surprised to know that the Irish Stock Exchange is already the world leader in listed bond investments. Euronext Dublin (as the Irish exchange is now known) is the number-one bond- and fund-listing location globally, with more than 40,000 bond securities and 4,600 fund securities all listed on the Dublin exchange. This activity is hugely impressive.

There is no reason why this success could not be replicated to turn Dublin into a European leader for SME IPOs.

With the right steps, up to 15 IPOs could be done in Dublin every year. I have launched four successful IPOs in the past nine years: Fastnet Oil & Gas plc, Amryt Pharma plc, Open Orphan (now hVIVO plc) and Poolbeg Pharma plc. I am about to launch a fifth IPO in 2023 called European Green Metals, a natural resource company focused on the production of critical metals in Europe for the energy transition economy.

It is a very exciting venture. Unfortunately, this latest IPO, like those I have been involved in previously, is being run out of London. I would be very interested in doing this IPO work out of Dublin, as would many others.

Action needs to be taken to create an environment in Dublin similar to that in London. We need to create a pipeline of new IPOs on the Irish exchange. By not taking advantage of the opportunities offered by small capital IPOs, Ireland Inc is missing a real trick. The officials in the Department of Finance could get the ball rolling by looking at any regulatory blockages that are preventing the Dublin exchange from becoming a leader in small-cap IPOs.

Dublin used to have the type of infrastructure needed. Twenty years ago, the likes of Merrion, Dolmen, NCB, Goodbody, Davy and the other stockbrokers were actively encouraging small-cap IPOs. We need to get back there. In the short term, the main stockbroking firms could more actively introduce their high-net-worth and family office investors to small-cap IPOs. They offer high growth and the prospect of returns well in excess of what large-cap companies provide.

There are downsides. Some of these small-cap IPOs won’t be as successful as expected and people risk losing part of their investment. Hence my view is that investing in small-cap IPOs is not something that retail investors should be getting involved in. But I’m certain that the vibrant Irish high-net-worth and family office ecosystem would love the opportunity to invest.

In my four successful IPOs, virtually all of the funds raised came from investors in London. Irish investors are not getting the opportunities in these IPOs. The investment community in Dublin needs to work together to make sure that Irish investors aren’t losing out. There is no reason why we could not have a vibrant IPO market alongside the current business in listings for bonds and debt. Having a pipeline of IPOs is also the best way to build the next Flutter, Kingspan or CRH. That’s how we save the Irish Stock Exchange.

Cathal Friel is co- founder and chairman of both Poolbeg Pharma plc and hVIVO plc (formerly Open Orphan)