Australia is experiencing a dramatic change in the investment landscape as public listings fell from 2,219 to just 2,124, reflecting a global trend where the appeal of public markets is rapidly waning.

According to the ASX Group’s latest activity report, the market operator saw just 15 new listings in the 12 months to September 30, while 46 entities delisted.

Martin Donnelly, managing director of client relations at EQT Capital Raising, noted that the declining number of public listings marks a larger shift in how companies are choosing to grow and access capital.

"For investors, this means expanding their horizons beyond traditional public markets and looking at opportunities in private markets, which are becoming a critical source of innovation and value creation," Donnelly said.

"Private markets offer access to dynamic companies that may never go public, presenting growth potential that is often overlooked in today's environment."

According to EQT, the rising costs and complexity of going public are some of the key considerations driving companies to choose the private equity route, coupled with tighter regulations, increased compliance requirements and greater stakeholder scrutiny, making the public market less attractive.

As such, many companies now see private markets as a more flexible way to continue growth and innovation without the challenges of an IPO.

It comes after the latest figures from JPMorgan showed that the number of private companies in the US backed by private equity firms has grown from 1,900 to 11,200 over the past 20 years.

"Private markets have become a vital part of modern investment strategies, not only for portfolio diversification, but also as an engine for sustainable, long-term wealth creation," said Donnelly.

“With fewer public companies to choose from, investors can no longer rely solely on the public markets for growth. By leveraging private capital, they can gain access to innovative sectors and high-growth opportunities that offer more resilience and less exposure to market volatility.”

According to the ASX, total new capital quoted in September was $6 billion, compared to $7.3 billion in the previous corresponding period (pcp).

Meanwhile, the total listed market capitalization of the delisted entities was $500 million compared to $400 million in pcp.

Across the pond, the number of publicly listed companies in the US has fallen by nearly 50 per cent over the past 25 years, underscoring that the ASX's own shrinking is not an isolated trend.

Similarly, the London Stock Exchange has seen a more than 15 percent decline in listings over the past decade, according to EQT.

A recent note from PrimaryMarkets pointed out that smaller listed companies, in particular, have to bear the brunt of rising compliance costs, challenges in raising capital and an increasing focus on short-term results.

"Companies are listed on the stock exchange primarily to raise capital and provide liquidity to their shareholders. For larger companies, these targets are often met continuously, making remaining listed a logical decision,” said Jamie Green, executive chairman of PrimaryMarkets.

“For smaller companies, however, the reality is often different. Capital can remain elusive even while listed, and shares can become highly illiquid, trading sporadically. Faced with these challenges, many smaller firms conclude that the costs and compliance obligations of remaining listed are not an efficient use of shareholder funds.

According to Green, delisting also improves the company's operational flexibility.

"Publicly listed companies face intense scrutiny from investors and analysts, creating pressure to deliver short-term results, typically reflected in quarterly earnings. This focus can sometimes undermine long-term strategic plans.”