Britain’s equity market is shrinking

A FEW MONTHS ago Trian, a hedge fund, revealed that it had built a 6% stake in Ferguson, a London-listed company that supplies the building trade. Trian is run by Nelson Peltz, who has a long history as the sort of activist investor who buys stakes in firms and then uses his influence over management to boost the share price. Ferguson makes most of its profits in America. Yet its shares traded at a discount to peers listed there. Perhaps something could be done to change this.

Sure enough, Ferguson said last month that it would spin off the British part of the business to focus on its American operations. It also said it was considering moving its stockmarket listing. Should the firm leave, it will be part of a broader trend in Britain: the shrinking supply of equity capital.