Mike McCudden: passionate about firms accessing capital markets (pic: Terry Murden)
Mike McCudden is behind a revived brand with a new mission in the capital markets, writes TERRY MURDEN
Scottish private companies may have a lukewarm relationship with the stock market but trading in their shares is being opened up as part of moves to increase liquidity and offer new investors an opportunity to back growth firms.
In 2023, former Scottish market maker Mike McCudden acquired trading platform JP Jenkins, founded in 1991 but which had become largely inactive. It now has 57 intermediaries trading shares in private companies. All but two of them can provide real time prices.
It enables those who have bought equity in private companies to sell when it suits them, rather than having to wait for the usual exit process, normally a sale of the business, or an auction date.
JP Jenkins expects to be among the first operators on the new PISCES regulatory framework being developed by the Financial Conduct Authority and the Treasury and due to launch in the autumn. Some companies will see it as a stepping stone to seeking a public listing.
Based in Glasgow and London, JP Jenkins is now the largest private market in the UK, possibly in Europe.
Historically, it was behind the Ofex market, whose members once included Rangers FC, but many of them made the transition to the Alternative Investment Market when it launched in 1995.
McCudden and his partners acquired the brand in an all-share deal and matched it with their CrowdX technology platform under a newly-named holding company, InfinitX, which is chaired by the Par Equity investor Paul Atkinson.
Paul Atkinson, chair(pic: Terry Murden)
“Our aim is to make the private market more accessible,” says McCudden. “There are billions of pounds tied up in illiquid assets and this opens up the market to allow investors to recycle shares.
“Our trading venue is specifically for trading in existing shares and not for raising new capital. If a client wants to raise capital, we introduce them to a suitable partner agent to support an investment round. We will support them through the process.”
The company is due to announce a £1.2m funding round involving Kelvin Capital and Scottish Enterprise which will support its clients who have a collective value of £3.5bn. The main trading business takes place in London while the Glasgow office at the corner of Wellington Street and West Regent Street provides the technology and administrative support.
It is seeking Financial Conduct Authority and Treasury approval ahead of its becoming part of the new PISCES (Private Intermittent Securities and Capital Exchange System). This will open the gates to more intermediaries and provides vital tax benefits for clients, including no stamp duty.
McCudden sees his platform as part of a wider mission to open up capital markets for growth firms. “Hopefully, we will become the first PISCES operator in the UK,” he says.
David Schwimmer, chief executive of the London Stock Exchange, last week described PISCES as an “innovative exercise” and said the likely launch would be “before the end of the year. We are optimistic about it and about what it will bring.”
McCudden, 49, began his career at one of the last market makers in Scotland, Aitken Campbell, and in recent years learned a few harsh lessons during a brief association with Tomas Carruthers and the Project Heather plan to launch a Scottish Stock Exchange.
Carruthers enlisted support from within capital raising sector, companies and politicians, including a presentation at the Scottish Parliament. But the initiative collapsed in 2020 under a mountain of unpaid bills and questions about its viability.
These days McCudden describes himself as a “capital markets expert” who just wants to see the Scottish eco-system fulfil its potential.
“I am passionate about making sure Scottish companies have access to a bigger capital market,” he says.
Asked about the likelihood of there ever being a full-blooded Scottish Stock Exchange, he says the centralising of the regional stock markets in the 1970s was inevitable because of technological advances and the benefits of scale and cost.
“Companies want to raise their capital locally,” he says. “But would an exchange in Scotland be big enough?
“It made sense to centralise because it made markets more efficient. So do we need a separate stock exchange in Scotland, or just something to help them access a bigger market?”
PERSONAL CHECKLIST
Birthplace: Glasgow
Education: Caledonian University – Risk Management
Who has been your biggest inspiration?
Has to be my dad…was a terrific guy.
What did you want to be when you were at school?
I wanted to be an airline pilot, but the closest I get is an early morning flight to London every few weeks.
What is your main interest outside work?
Family, Munro bagging, a good novel and I’ve recently taken up golf
What annoys you?
Poor manners
You’ve been involved in capital markets in Scotland for decades – what has been your key learning?
There’s an immense pool of talent in the country and that’s respected worldwide – but those resources are best deployed by integrating into the global financial ecosystem.
Which three people would you invite to a fantasy meeting, lunch, dinner party?
Anthony Bourdain, David Bowie and Nelson Mandela
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