Listed companies should include retail investors in their recapitalisation plans, investment platform PrimaryBid has claimed.
PrimaryBid has penned an open letter urging the boards and management teams of listed companies to allow retail investors to take part in new fundraising.
The letter said that Covid-19 is leading to a large wave of recapitalisations for listed companies.
They are issuing significant amounts of shares directly to institutional investors and typically at discounts to already depressed share prices.
PrimaryBid is concerned that retail investors are not receiving their entitlements to participate in these often-discounted fundraisings.
“Retail investors should be afforded the same protections and participation rights as other company shareholders,” said Anand Sambasivan, chief executive and co-founder of PrimaryBid, said.
“The technology now exists to include retail in these fundraising details without compromising on timetable or execution.
“Coronavirus has put significant pressure onto many of the UK’s listed companies who now need to raise equity, including household names with large retail investor followings.
“It’s only fair that those retail investors can be part of a Great British Recapitalisation.”
The signatories also call for continued engagement from other industry bodies, such as the Pre-Emption Group and the Association for Financial Markets in Europe, in codifying best-practice guidance around retail inclusion.