A group of officials involved in the Irish stock market said ahead of the Budget that the government should support the creation of a €400 million foundation fund to invest in Irish initial public offerings (IPOs).
“For a variety of reasons over the past decade, Ireland’s equity capital markets have performed below expectations and have been underutilized as a means of raising capital for the expansion of Irish companies,” the so-called Irish Stock Market Forum, made up of representatives from Euronext Dublin Stock Exchange and corporate law, accountancy and stockbroking firms, said in a filing.
“We are now at a critical juncture and the Irish Government and all stakeholders in the country – exchanges, brokers, lawyers, accountants, registrars and central securities depositories – need to take urgent action to change trajectory and re-establish the equity market as a viable, long-term financing avenue for Irish businesses.”
The proposal fleshes out key proposals from the Euronext-led group, reported by The Irish Times earlier this month, and aims to revitalise a market which has seen a 40% drop in the number of listed companies over the past decade, to 26 now. The decline has been driven by private equity-backed takings private, re-listings and a lack of IPO activity.
Smurfit Kappa is set to exit the exchange next week as it merges with US rival WestRock and moves its primary listing from London to New York. This follows the exits of fellow Iseq heavyweights CRH and Flutter Entertainment in the past 10 months.
The filing also hints at the possibility of the Ireland Strategic Investment Fund (ISIF) and pillar banks joining the Cornerstone Fund by highlighting other cases where state funds and banks have co-invested, including investment vehicle BGF Ireland, which was set up in 2017 to provide equity financing to Irish small and medium-sized enterprises, and the Pearl Residential Equity Fund, which was set up five years ago to provide equity financing to housing projects across the state.
The document also outlines Cornerstone Fund’s governance structure and investment criteria, including that it will not be the lead investor in any IPO or take more than a 15% stake in any individual company.
The Irish Stock Market Forum also called on the government to launch a tax-advantaged personal investment plan, following the example of popular schemes in other European countries such as the Individual Savings Account (ISA) scheme, introduced in the UK 25 years ago.
The group is advocating the opening of so-called Growth and Income Accounts in Ireland, which would allow individuals to invest up to €40,000 directly or indirectly over a five-year period in companies listed in the European Economic Area (EEA).
The Irish government is prohibited by EU state aid rules from launching a scheme aimed at encouraging investment in Iseq shares, and a broader scheme focusing on EEA-wide shares would be of little benefit to the Irish market.
The document, submitted to the ministry in May ahead of the 2025 Budget, reiterated Euronext Dublin’s long-standing request for the introduction of tax incentives to allow company founders to sell some of their shares as part of an initial public offering.
Minister of State for Financial Services Neil Richmond told The Irish Times last week that the government was keen to help the Dublin stock exchange “recover” from the departure of several high-profile companies and a lack of new listings in recent years, and was looking at whether tax incentives could be introduced to encourage activity.
“This plan [proposed by Euronext] “They are clearly in the best interest and we would like to speak to them further and be assured that we can support their recovery,” he said.
Companies listed on Euronext Dublin contributed €12.4 billion to the local economy in 2022, according to a report prepared by Grant Thornton last year. The report was commissioned by the exchange and local brokerages.
