City expects flotations of private equity-backed firms early next year

City investors expect the UK flotation market to return in earnest in the first few months of next year as private equity firms look to flip their investments back into the public arena, a survey from Royal Bank of Scotland says.

The poll of major UK institutional investors reveals that 52 per cent of those asked think the listings market will crank into life in the first quarter of 2010, while 15 per cent believe that a flotation revival could begin in the final few months of this year.

Nicholas Haag, head of UK equity capital markets at RBS, said: "We firmly believe the UK flotation market is set for a comeback. However, changing investor expectations mean it will not be the same as it was in the boom times."

However, the survey has a warning for private equity houses looking to make a fast buck, with a quarter of institutions saying they believe valuation expectations will be too great. Nearly a third said they believe excess leverage in some private equity-backed firms will also hamper listing aspirations.