London's demise is now terminal
The stock market float of payment giant Wise in 2021 was hailed as a rare yet spectacular coup for the City of London.
Commentators, including myself, hailed it as proof that the Square Mile could continue to attract the best companies on the planet and retain its status as one of the pre-eminent financial centres.
Here was one of Europe's brightest technology prospects, led by two swashbuckling entrepreneurs in Kristo Käärmann and Taavet Hinrikus, choosing the capital to be the beating heart of their rapidly expanding financial empire.
Armed with a pledge to shake up the cross-border currency exchange market that had long been dominated by a cosy club of high street banks, London had managed to woo the sort of bona fide disruptors that ministers were convinced Britain could become a beacon for.
The pair scored further points for shunning New York at a time when Wall Street was increasingly becoming the natural home of choice for a generation of technology starlets.
London was in desperate need of a boost and not just because several recent high-profile floats including that of takeaway app Deliveroo had bombed.
Wise was everything the City needed if it was to remain relevant in the 21st century. The company's £9bn valuation – a record for a UK technology firm – was the icing on the cake for London's cheerleaders.
By the same token then, it is impossible to see Wise's decision to switch its main stock market quote to the Big Apple less than four years later as anything other than a devastating blow to London's long-term prospects as a leading hub for international capital.
Indeed, with time it may come to be seen as fatal – the moment when the capital's malaise went from being temporary to terminal.
London Stock Exchange officials and ministers have been forced to stand and watch helplessly as a series of blue-chip companies have either turned their back on Paternoster Square entirely, or relegated the UK to secondary listing status.
It is a crisis that investment minister Baroness Gustafsson must quickly find answers to. Wise's bombshell announcement clashes awkwardly with reports that the celebrated technology executive-turned-government appointee is planning to relaunch the Office for Investment at a private event on Thursday.
The shadow of a company whose valuation has ballooned to £12bn since it went public now looms uncomfortably large over Gustafsson's attempts to revamp the Whitehall investment hub with the hope of securing hundreds of billions of capital flows into the UK in the coming years, according to Sky News.
Coming hours after Cobalt Holdings, a commodities trader, pulled a planned $230m (£169m) listing in London, Gustafsson must be getting an unfortunate sense of déjà vu. Labour's flagship investment summit convened just days after her appointment in October was mired in a comedy of errors.
Foreign business leaders shunned the event and organisers inadvertently revealed the contact details of over 100 guests.
Meanwhile, questions were understandably asked about the wisdom of appointing someone to promote overseas investment who only weeks earlier had sold Darktrace, the cyber-security specialist she co-founded with the late tech tycoon Mike Lynch, to a US private equity outfit in a £4.3bn deal.
Similarly, Labour has to confront the reality that its attack on the rich is another reason for people to leave, as shadow business secretary Andrew Griffith was quick to point out.
Reforms such as the pensions bill, which makes it easier to invest in equities help counter the gloom, but they risk being for nothing if the Government's war on wealth continues.
The decision of construction equipment rental giant Ashtead to elope across the pond in December, was perfectly legitimate given that the US is by far its biggest market, but it was the sixth constituent of the FTSE 100 to have disappeared overseas in a matter of a few, short years.
It joins others including Flutter, owner of Paddy Power, building materials supplier CRH and tour operator Tui in quitting London.
The hope is that this exodus can still be reversed. But the risk is that it suddenly escalates, becoming an unstoppable stampede as all-but the most entrenched boards scramble to avoid being the last one to make their escape.
Predictably, Wise is at great pains to ensure the move isn't seen as a snub to the City, yet it is hard to escape the impression of an organisation that doth protest too much.
'We believe the addition of a primary US listing would help us accelerate our mission and bring substantial strategic and capital market benefits to Wise and our owners,' Wise said.
The real giveaway, however, may be in the statement that such a shift would give it 'better access to the world's deepest and most liquid capital market'. Ditto the claim that the US was 'the biggest market opportunity in the world'.
Yes, the company is retaining a listing in London but the direction of travel is now firmly set. Who would bet on that still being the case in a couple of years' time?
The news that top shareholders have been pushing for a move to the US despite a 36pc leap in its share price in the last 12 months alone will do little to dampen concerns about London's prospects – many of those that have gone before Wise have blamed weak valuations
Having helped turn Darktrace into a star of Britain's tech industry, Wise's volte-face will be particularly painful for Gustafsson. When she was appointed last year, Sir Keir Starmer hailed her as 'an accomplished entrepreneur who brings invaluable experience to the role'.
The expectation was that she would spearhead Britain's attempts to cultivate its own answer to Silicon Valley.
That might be easier if doubts about London were confined to one or two overarching areas. Yet they are so abundant, ranging from low valuations and limited levels of trading to more generous executive pay and stifling governance that one wonders whether it is too late to turn the tide.
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