London-based brokerage group CMC Markets has quietly launched a corporate broking arm.
Called Capx, the new division provides broking services to listed and unlisted companies. The Capx website suggests this is primarily for UK-listed small caps on the public side.
On the private side, CMC Markets claims it helps raise funds for earlier stage private businesses. The firm says it heped Dutch Barn Orchard Vodka, a brand run by a UK distillery and which has comedian Ricky Gervais as a marketing partner, raise funds.
Capx also says that it provides access to IPOs and new share issuance.
CMC has made a push in the past few years to build out more of a B2B arm, which this – to some extent – appears to be a part of. The company recently announced a partnership with Revolut, which will give the latter business access to CFD trading via CMC’s technology.
The Capx offering is also probably in demand from the sorts of companies that CMC is targeting. Institutional investors in the UK, whether it be pension funds or asset managers, have been net sellers of London-listed businesses for a long time now.
Other factors, such as size and asset manager ‘buy lists’, further compound this problem, meaning the pool of potential investors in the UK has shrunk.
Consequently small caps are eager to tap into the retail market. As CMC probably already has a book of clients that are interested in small caps, it’s plausible that they are tapping those contacts to invest in either IPOs or secondary placements.
There has also been an increase in the ability of retail clients to access either IPOs or secondary placements, mainly via the technology provider PrimaryBid.