The City of London’s investment-broking industry — once the beating heart of small- and mid-cap equity markets — is undergoing one of its most dramatic shakeouts in decades. Amid thinning trading volumes, tighter regulations, and shifting investor appetites, the spotlight has fallen on Peel Hunt, one of the City’s best-known mid-tier brokers, as a bellwether for how smaller financial firms will navigate the new era of consolidation and competition.
The brokerage landscape, long characterized by an abundance of independent firms competing to serve listed companies, is shrinking fast. The trend is not just cyclical — it’s structural. The past two years have seen dozens of corporate brokers merge, shut down, or downsize, a reflection of how the traditional business model has come under strain from regulatory reforms, the decline of public listings, and a migration of capital toward private markets.
A Sector Under Pressure
Peel Hunt’s story captures the challenges — and potential opportunities — facing the City’s mid-cap brokers. Founded in 1989 and floated on the London Stock Exchange’s AIM market in 2021, the firm built its reputation on its research coverage of small and mid-sized UK-listed companies. But as market liquidity dried up and investor attention shifted toward larger, global stocks, Peel Hunt has found itself navigating an environment of lower deal flow, tighter margins, and rising costs.
“The broking sector has been through a perfect storm — regulatory burdens, falling commissions, and a dearth of IPOs,” said Stephen Adams, head of UK equities at a major London fund house. “Peel Hunt remains one of the few independent names still standing, but survival will require a serious rethink of how these firms create value.”
The numbers tell the story. UK IPO volumes have collapsed by nearly 80% since 2021, while trading revenues across mid-cap equities have shrunk as investors chase liquidity in larger global markets. At the same time, compliance costs under MiFID II regulations — which separated research and trading commissions — have squeezed smaller brokers’ profit margins, forcing many to consolidate or exit the market altogether.
Peel Hunt’s Strategic Pivot
Amid this turbulence, Peel Hunt has moved to reposition itself. The firm’s strategy now hinges on broadening its client base, deepening research capabilities, and strengthening cross-border reach. It has invested heavily in digital trading infrastructure and leveraged its research coverage — one of the most extensive among UK mid-cap brokers — as a differentiator in a market where information and insight remain at a premium.
Chief Executive Steven Fine has emphasized that Peel Hunt’s future lies in building scale and embracing innovation.
“The landscape has changed,” Fine said in a recent interview. “The days of relying on IPO cycles are over. Our focus is on building recurring revenue through trading, execution, and research partnerships — and ensuring we remain relevant to both corporate clients and institutional investors.”
One key initiative has been the expansion of Peel Hunt’s online trading and research platform, which connects UK-listed corporates with international investors, including sovereign wealth funds and long-only asset managers. The firm has also been exploring partnerships with North American and Middle Eastern investors, seeking to tap into regions where liquidity and risk appetite remain robust.
Mergers and Consolidation: A Changing Market Map
Peel Hunt’s repositioning comes amid a wave of consolidation reshaping the City’s brokerage scene. In recent months, firms such as Cenkos Securities, FinnCap, and Shore Capital have all pursued mergers or strategic alliances in an effort to pool resources and maintain relevance.
The merger between Cenkos and FinnCap in 2023, creating Cavendish Financial, exemplified the trend — an acknowledgment that standalone brokers are finding it increasingly difficult to sustain profitability in a shrinking market.
“The reality is that there are simply too many brokers chasing too few deals,” said Tom Keating, an independent financial analyst. “We’re likely to see further consolidation, and the survivors will be those that can combine strong research franchises with modern digital execution.”
For Peel Hunt, the challenge is to preserve independence while achieving the scale necessary to compete. Analysts have speculated that the firm could become either a consolidator or a takeover target, depending on how market conditions evolve in the next 12 to 18 months.
The Broader Context: London’s Listing Drought
The brokerage shakeout reflects deeper challenges facing London’s equity markets. The number of companies listed on the London Stock Exchange (LSE) has fallen to its lowest level since the early 1990s, as firms increasingly opt for private equity funding or U.S. listings instead of London IPOs.
This shift has eroded the pipeline of corporate clients that once underpinned the business model of brokers like Peel Hunt. It has also raised alarm among policymakers and the Financial Conduct Authority (FCA), who have warned that a shrinking public market threatens the UK’s competitiveness as a global financial hub.
In response, the UK government has introduced a series of capital market reforms, including simplified listing rules and new incentives for retail participation. But industry observers say it may take years for those reforms to translate into meaningful revival in mid-cap trading activity.
“The ecosystem that supported mid-cap brokers — analysts, fund managers, company advisors — has been under strain for years,” said Sarah Hewson, a financial commentator in London. “Peel Hunt’s resilience is commendable, but the system around it must evolve too.”
Looking Ahead: Reinvention or Retreat
As 2026 approaches, the consensus among analysts is that the City’s broking industry will emerge smaller but more specialized. Firms that survive will likely focus on niche sectors — such as renewable energy, fintech, and healthcare — where demand for bespoke research and financing remains strong.
Peel Hunt’s ability to adapt to this new landscape could define its future. Its strong balance sheet, deep institutional relationships, and commitment to independent research provide a foundation for resilience, but success will depend on how effectively it embraces digital transformation and global capital flows.
“The name of the game is adaptability,” said Fine. “We’ve seen 35 years of change in this industry. The next five will define the next generation of City brokers — and we intend to be part of that story.”
Conclusion: A Symbol of Survival in a Shifting City
Peel Hunt stands as both a survivor and a symbol of the City’s changing identity. As London’s once-crowded broking ecosystem consolidates, the firm represents the delicate balance between heritage and reinvention — between the old model of personal relationships and the new one of data-driven finance.
The coming months will determine whether Peel Hunt can remain an independent force or whether it, too, will become part of the City’s broader merger wave. Either way, the firm’s trajectory offers a window into the true cost — and opportunity — of transformation in one of the world’s oldest and most storied financial centers.
