Dual class share structures could help lure Europe’s best founder-driven businesses to the London market, but challenges remain.

By Sarah Axtell, Tad Freese, Chris Horton, Rick Kline, Anna Ngo, Koushik Prasad, David Walker, Tom Evans, and Catherine Campbell

Listing of dual class share structures, which give certain owners (usually founders, employees, and pre-IPO investors) enhanced voting rights over other public shareholders, are increasingly common in the US markets as a strong pipeline of founder-driven tech companies goes public. The UK has now seen several dual class share structures, including most recently the £5.4 billion IPO of The Hut Group, which had a “special” share for the founder. With the UK government keen to increase the marketability of UK listings following Brexit, we anticipate that US dual class deal architecture is likely to be featured on a growing number of London listings — a development that could benefit PE firms and founder managers seeking to retain a greater governance role post-IPO.