Wise to shift primary stock market listing from London to New York

A prominent shareholder in Wise, the money-transfer company formerly known as TransferWise, has expressed discontent over the firm’s decision to move its primary stock market listing from London to New York. The announcement, which caused significant ripples in the City, marks a significant shift for the fintech giant, which was established in London in 2011 by Estonian entrepreneurs Kristo Käärmann and Taavet Hinrikus. The company went public on the London Stock Exchange just ten years later.

Orbis, a key shareholder with a 1.85% stake in Wise valued at approximately £230 million, criticised the decision, citing frustration over the loss of notable UK-listed firms to the United States. Alec Cutler, a manager of Orbis’s Global Balanced and Global Cautious funds, stated that while the move is likely to yield increased valuation for Wise, it was disappointing to see the company feel the need to take such a step. He voiced concerns about UK firms relocating due to valuation disadvantages and the additional costs such transitions entail.

Wise, valued at £11.7 billion, maintains that the US offers superior opportunities in terms of capital market depth and liquidity. The company also highlighted that the move would enhance its brand awareness in America, a key region for its growth ambitions. Fund manager Ben Needham of Ninety One, another major player in Wise’s investor pool, supported the decision, asserting that a stronger presence in the US market was essential for the fintech company.

Wise’s current dual-share structure gives its CEO, Kristo Käärmann, substantial control, with 18% of total shares translating to nearly 50% of voting power. This arrangement is scheduled to end next year, a change that some believe could have influenced the company’s decision to transition its primary listing outside the UK.

The fintech firm employs 6,000 individuals globally, with one-fifth of its workforce based in London, where it plans to retain its headquarters despite the listing shift. While Wise has not commented further, a shareholder circular detailing the proposal is expected to be issued by June 26, ahead of an investor vote.

The London Stock Exchange faces growing concerns over its ability to retain major firms amid increasing competition from overseas markets, particularly the United States. Wise’s decision amplifies these fears, as it joins a list of companies prioritising growth opportunities internationally over their home market.