Helping you prosper
Over the 33 years since the platform was established, many household names have been supported by JP Jenkins through their capital journey. Companies coming to the venue are generally either in a growth phase, having been in operation in excess of three years, are at pre-IPO stage, or have been moving from AIM to JP Jenkins.
In its most recent development, the platform was acquired last year by leading fintech business, InfinitX. This move has taken JP Jenkins into a fully electronic trading platform as of March this year. Now, for the first time, sophisticated private investors can simply buy and sell shares on JP Jenkins through their own brokerage platforms in a similar way to trading and investing in publicly listed securities.
In this article, we take a look at this alternative trading platform and the reasons behind its increasing success and profile.
How does the platform operate?
For investors and shareholders, JP Jenkins is a matched bargain venue. Matched bargain trading systems are order driven, rather than quote driven, like public markets. Investors’ offers to buy and sell securities are directly matched with each other.
All secondary share trading is fully authorised by the underlying companies who abide by the platform’s rules, which are not as onerous as for publicly listed companies. Shares traded on JP Jenkins settle via CREST (the UK electronic settlement system), and can be held in investors’ brokerage accounts where they have direct access to real time bids and offers on the venue.
The venue offers an efficient and cost-effective solution that allows the trading of securities, whether that be in the form of shares, warrants, loan notes or other options. JP Jenkins work with their clients to tailor a solution for them, be it open daily trading or on a timed auction model.
The platform has many benefits; companies that join have access to a robust distribution network, expanding their reach and raising their profile amongst potential investors and partners. There is clear and transparent reporting, pricing and visibility to enable private companies to build on the trust and support of their shareholders and, ultimately, the platform provides a secure environment for companies and intermediaries to trade, utilising existing market infrastructure, such as authorised brokers and other intermediaries.
Who does the platform attract?
JP Jenkins has worked with some fantastic companies over the years, from large blue chip British brands to substantial international football clubs. Currently, the platform is home to a number of exciting growth companies, including GS Verde, Thrive Renewables, Quantum Financial Holdings Limited and Cafédirect Plc.
There are also a number of notable clients who have chosen to leave the London Stock Exchange and make JP Jenkins their new home, such as Stanley Gibbons PLC, iEnergizer PLC, Hurricane / Prax PLC, E-Therapeutics and Superdry.
How easy is it to join JP Jenkins?
The set-up process is simple, with onboarding typically taking 4-6 weeks. As a starting point, initial discussions take place between the company and the platform’s experienced team to evaluate the best solution.
JP Jenkins then run due diligence checks on the company, with a focus on reporting standards and audited accounts. All companies need to have their shares dematerialised and freely transferable in CREST; this is where the team work with the registrars to obtain the active ISIN code. On admission, JP Jenkins then release an international press release.
How has the venue been performing?
JP Jenkins are seeing continued investor demand for access to unquoted assets. Due to uncertainty and volatility in public markets, growth companies are staying private for longer whilst access to these assets remain largely in the hands of bigger institutions.
The JP Jenkins venue offers an opportunity for shareholders and investors to manage their portfolio of private investments effectively, including allowing opportunities to exit, where required. This in turn leads to greater recycling of capital and wider support for emerging growth companies.
Through the platform, investors also have the opportunity to access established growth companies and Pre-IPO businesses at the earlier stages of their life cycle with a better potential upside pre listing.
A route to exit
A review of the latest data by HMRC for SEIS and EIS shows a total of nearly £30 billion has now been invested into more than 53,000 companies since the schemes were created.
This is a similar story to venture capital and private equity investment outside of these investment schemes, where large funds are finding it difficult to manage their tail end portfolios with real requirements to find a liquidity/ exit solution.
A recent research paper ‘Fortune Favours’ survey from Charles Stanley gave insights from over 500 entrepreneurs, which shows that 48% of participants are without an exit strategy and 37% have no succession plan. *
It has been a tough time recently for those looking to exit the entrepreneurial stage in the UK. Recent increases in interest rates and the cost of living crisis have contributed to an environment where founders and owners must tread more carefully with day-to-day operations but also with timing exits and handing over the reins. However, this is a good time to plan.
Since 2013, there have been 5,899 exits by high growth companies. The last two and a half years have accounted for 38.9% of that activity. The reduction in exit activity in 2023 does not, however, signify a dead end, rather, it is an invitation to evaluate, strategise and align liquidity choices with a broader view.
Exits by high-growth UK companies benefit the individuals and organisations that make up the ecosystem. Early investors, such as venture capital firms or angel investors, realise returns that drive enthusiasm and free capital for reinvestment. Exits also provide liquidity for founders and employees, who can become angel investors to back new entrepreneurs creating a flywheel effect.
Beyond the purely financial redistribution of resources, exits also free individuals to pursue new ventures, channelling their experience into fresh entrepreneurial pursuits. A significant majority of the almost 6,000 exits in the last ten years - 96.3% were acquisitions, while a minority, 3.71%, took the route of initial public offering (IPOs).
This lack of companies choosing to list, coupled with a growing enthusiasm for foreign exchanges - 20.1% of highgrowth IPOs since 2013 occurred abroad - has fed into debates regarding the attractiveness of the UK’s domestic markets. Despite these concerns, founders and leaders of high-growth companies continue to have options for successful exits that reinvigorate the UK’s entrepreneurial ecosystem.
*Charles Stanley, August 2023"
Interested in learning more about JP Jenkins?
If you want to know more about this fully electronic trading platform option for private companies, or have any questions, please contact Mason Doick, Head of Corporate at JP Jenkins on md@jpjenkins.com, or get in touch using the contact form below.
More in our Capital Markets Outlook
The article above is from our 2024 Capital Markets Outlook where we share our expert insights on the recent performance of AIM, but also turn our attention to alternative market options for ambitious growth businesses, offering comprehensive market analysis to aid your strategic decision-making.
