(Bloomberg) -- London is missing out on a rebound in Europe’s initial public offering market, in yet another sign of its waning prospects as a listing destination. 

Of the $11.9 billion raised via IPOs in Europe this year, just over 2% was in the UK — the lowest in decades, according to data compiled by Bloomberg. That compares to an average share of 31% between 2012 and 2023, the data show. 

With UK stocks trading at a discount to many major foreign markets, the London IPO market is being hindered by the prospect of companies achieving higher valuations elsewhere. UK equity fund outflows have also increased in recent years, partly driven by the pension sector.

“The UK has become relatively unattractive as a listing venue,” said Charles Hall, head of research at Peel Hunt Ltd. “The level of fund outflows has impacted both valuations and capital available for IPOs.”

A spokesperson for the London Stock Exchange did not immediately respond to a Bloomberg request for comment. 

London’s deepening capital market woes come as Europe has this quarter already raised the most via IPOs since the third quarter of 2022. Spanish beauty and fragrance group Puig Brands SA’s €2.6 billion ($2.8 billion) first-time share sale last week in Madrid is the world’s largest this year, data compiled by Bloomberg show.

To be sure, the region’s uptick follows last year’s slump in IPO volumes across Europe as interest rates surged and the economy slowed. The $14.3 billion raised by firms in 2023 pales in comparison to an average of $48.6 billion per year during the previous decade, according to the data compiled by Bloomberg. 

Still, there are hopes of a second-half pickup in IPO interest in Britain, according to James Wootton, partner and co-head of law firm Linklaters’ global equities practice.

Read More: Pension Funds’ Share of UK Stock Ownership Hits Record Low

“While the UK market hasn’t yet seen the larger deals that have started to flow this year as markets across Europe have opened up, companies and practitioners in London are busy getting ready for second-half 2024/first-half 2025 launches,” Wootton said.

“We confidently look forward to those comparative numbers moving back towards historic norms,” he added.

--With assistance from Alexandra Muller.

©2024 Bloomberg L.P.