I spent 15 years at IG Group as part of the senior leadership team, overseeing the technology function from a team of 4 to over 250 engineers. During that time, I watched the company's market capitalisation grow from roughly 300 million pounds to 2.7 billion pounds. The overwhelming majority of that value creation came from intangible assets — the technology platform, regulatory licences, customer relationships, brand trust, and proprietary data — none of which appeared on the balance sheet at anything close to their true worth.
The journey from management buyout through private equity ownership to public refloat taught me more about how equity structures interact with intangible asset value than any textbook ever could.
The equity structure you choose at each stage of your company's life determines who captures the intangible value you create. Get this wrong and you build enormous value that accrues to someone else. Get it right and you create alignment between the people building intangible assets and the people who benefit from them.
Before examining the equity journey, it is worth understanding what actually drove the value creation. IG Group's competitive advantage was built on five interlocking intangible assets.
Technology platform. We built the first online trading platform in 2003, the first mobile trading platform in 2004 — before smartphones existed — and later the world's first Apple Watch trading app. Each of these was a multi-year engineering investment that created massive competitive moats. The platform delivered real-time streaming prices that were honoured upon receipt, with sub-one-second execution on large orders. That capability took years to build and was extraordinarily difficult to replicate.
Regulatory licences. IG held licences across multiple jurisdictions. Each licence represented years of regulatory engagement, compliance infrastructure, and institutional trust. The replacement cost was enormous — not just the application fees, but the years of operational track record required to earn regulator confidence.
Customer relationships. A trading platform's customer base is not easily replicated. Clients developed trust through years of reliable execution, and the switching costs were significant. The data we held on customer behaviour, trading patterns, and risk profiles was itself an intangible asset of considerable value.
When a management buyout occurs, the negotiation forces both sides to put a price on intangible assets — even if neither party uses that language. The PE investors buying into IG were pricing the technology platform, the regulatory permissions, the customer base, and the management team's ability to compound those assets.
During MBO negotiations, the technology platform was not valued as a line item. It showed up as engineering cost on the P&L. But the revenue it enabled — the trading volumes, the customer acquisition, the international expansion capability — was the primary driver of the price PE was willing to pay. The lesson is clear: intangible assets are priced implicitly through their revenue contribution, not explicitly through their balance sheet treatment.
What PE paid for, in reality, was the right to benefit from the continued compounding of those intangible assets. The management team's equity participation ensured alignment — the people building the intangible assets had a direct stake in the value they created.
| What PE Valued Correctly | What PE Initially Underweighted |
|---|---|
| Revenue growth trajectory | Replacement cost of the technology platform |
| Customer acquisition metrics | Value of regulatory licences across jurisdictions |
| Market position and brand | Engineering culture as a compounding asset |
| Management team capability | Data assets and proprietary analytics |
| Scalability of the model | Network effects between product lines |
The gap between what PE initially modelled and what ultimately drove value creation was almost entirely explained by intangible assets that compounded faster than anyone projected.
The equity structure at each stage of IG's journey served a different purpose in relation to intangible asset value.
Pre-MBO (public company). The public market valued IG based on earnings multiples and growth rates. The intangible assets were priced implicitly through revenue and margin expectations. The market regularly questioned why the technology cost base was so high — a tension I experienced directly. The CEO and CFO spent considerable effort explaining to the City why engineering investment was justified.
During PE ownership. The equity structure shifted to concentrate ownership among those who could directly influence intangible asset creation. Management equity participation was structured with ratchets and milestones that rewarded the compounding of specific value drivers — revenue growth, margin expansion, international footprint. This alignment was powerful: the people building the technology platform, nurturing customer relationships, and securing regulatory approvals had direct financial incentives tied to the outcomes of those activities.
PE ownership structures are, in effect, intangible asset incentive schemes. They reward the creation and compounding of the very assets that traditional accounting fails to recognise. Founders should study PE equity structures not as financial engineering, but as templates for aligning human capital with intangible value creation.
Post-refloat (public again). When IG returned to the public markets, the same intangible assets were valued through a different lens. Public market investors applied revenue multiples, compared IG to peers, and assessed growth sustainability. The refloat pricing reflected a premium for the intangible assets that had been built during PE ownership — but it also revealed the structural limitation of public market valuation: the market valued the earnings stream, not the underlying intangible assets producing it.
The refloat was instructive. The same company, with the same intangible assets, was valued differently by public markets than it had been by PE. This is not a market inefficiency — it reflects genuinely different valuation methodologies.
For founders considering a public listing, this distinction matters enormously. The intangible assets you have spent years building will be valued through the lens of the financial metrics they produce, not through their replacement cost or strategic importance. This means you need to build a narrative bridge — connecting the intangible assets to the financial outcomes — before the IPO, not after.
The IG Group journey distilled several principles that apply directly to founders at any stage.
First, ensure the people building intangible assets have equity. This sounds obvious, but many startups concentrate equity in founders and early investors while the engineers, designers, and customer success teams who build the actual intangible assets hold little or no equity. This misalignment compounds over time. At IG, the management equity structure during PE ownership was a significant factor in retaining the engineering talent that built the platform.
Second, understand which intangible assets your equity structure rewards. Revenue-based milestones reward customer relationship building. Margin-based milestones reward technology efficiency. International expansion milestones reward regulatory and operational capability. Structure your equity incentives to reward the specific intangible assets that drive your value creation.
If you are a startup founder preparing for a funding round, take time to catalogue your intangible assets before negotiating equity terms. Understanding what you have built — in intangible asset terms — gives you a stronger negotiating position. Use a tool like the Opagio Valuator to quantify your intangible asset base before entering discussions.
Third, prepare for valuation methodology shifts. Your intangible assets will be valued differently by angels, VCs, PE, and public markets. Each audience uses different frameworks and weights different factors. Building a robust intangible asset register early means you can adapt your valuation narrative for each audience without starting from scratch.
IG Group's MBO-to-refloat journey is not unique. The same pattern plays out across technology companies that transition between ownership structures. The intangible assets remain constant — the technology, the customers, the brand, the team — but the equity structure determines who captures the value those assets create.
For founders building companies today, the lesson is this: your equity structure is not just a financial instrument. It is an intangible asset strategy. The way you allocate ownership, structure incentives, and align stakeholders will determine whether the intangible value you create accrues to the people who built it or to those who simply held paper at the right time.
Understanding intangible asset categories and how they interact with equity structures is not academic. It is the difference between building a company worth 300 million pounds and building one worth 2.7 billion.
Ivan Gowan is CEO of Opagio. He spent 15 years at IG Group (LSE: IGG) as part of the senior leadership team, growing the engineering function from 4 to 250 people during the company's rise from a 300 million to a 2.7 billion pound market capitalisation. He built IG's first online and mobile trading platforms and the world's first Apple Watch trading app. Learn more about our team.
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