The London Stock Exchange says it wants a role in the funding of private companies as part of the UK’s wholesale markets review. No wonder - this is a growth market, accounting for about 7% of global investable equity assets, up from 2% two decades ago.
For bourses, the extra business comes with strings. Private companies disclose little limited information, which is invariably tilted towards the vendor. Insider trading and fraudulent activity are big risks. The admission of external capital may change the character of the company. If employees can cash out more easily, their work ethic may weaken.