Britain fails its financial finest: It's open season for overseas predators as UK fund bosses snub the City, says ALEX BRUMMER
Britain’s capability in creating innovative financial firms is legion. It is no accident that the UK has become a fintech champion through start-ups such as Worldpay, Revolut, Monzo, Atom Bank and several more.
The UK also has been a pioneer in the alternative investment space via firms such as Preqin (now part of BlackRock) and Coller Capital.
Lloyd’s of London is a revived force because of the entrepreneurial spirit of its brokers and underwriters taking on the new lines and risks which behemoths of the sector decline to touch.
Yet with few exceptions, the UK’s financial trailblazers are a neglected species on their home turf.
The bidding war for specialist insurer Beazley is a case in point. Immediately after Swiss giant Zurich publicly showed its hand as a buyer, the shares shot up more than 40 per cent.
The lukewarm interest of UK fund managers in Britain and the City has made it open season for overseas buyers setting their sights on our trailblazers.
Going cheap: Shares in specialist insurer Beazley shot up more than 40% after Swiss giant Zurich publicly showed its hand as a buyer
Beazley’s strategic proposition of cover for cyber, marine, space, fine art and aviation is highly attractive.
The current battle appears to be focused on price, with Beazley’s boss Adrian Cox suggesting Zurich is offering a Championship price for a Premier League asset.
Zurich’s riposte is to say that it is very disciplined when it comes to deals and conserving capital. That remains to be seen.
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A bigger issue is what happens to the clever entrepreneurship and enterprise if Beazley were to become part of a £77billion Swiss colossus.
The humiliating collapse of Credit Suisse has made Switzerland’s financial groups fastidiously cautious.
The first smell of cordite at Beazley would see Zurich’s directors heading for the safe room.
Far better if shareholders backed Beazley’s independence rather than allowing investment bankers to persuade independent directors there is no choice but to take the money and disappear.
In a similar vein, the English sparkling wine will be cracked open at the offices of Coller Capital in London’s Mayfair.
Founder Jeremy Coller personally is set to join the billionaire class, collecting close to £2billion from the sale of his enterprise to Swedish competitor EQT.
As much as one may disapprove of private equity (PE), Coller has demonstrated the value of buying and selling stakes in PE funds.
If Coller wished to cash out, what about London? The City prides itself on being Europe’s, and even the world’s, financial capital. What a pity that it so often fails to find a domestic buyer or bring an impressive asset to the listed market.
Taxing times
Much excitement from analysts and the Treasury that finally Britain’s public finances may have turned the corner in December.
Pity they should not. Since taking over at No 11, Rachel Reeves has ferociously targeted enterprise and middle England with the biggest tax raise in history: some £60billion over two budgets.
The short-term dividend for the public finances is lower borrowing coming in December at £11.6billion.
That is down sharply on the same month last year. The improvement largely is the consequence of the rise in employers’ National Insurance contributions which punished jobs and inflamed the cost of living.
Needless to say, the cost of running public services, welfare bills and debt interest are showing no improvement on 2024. It simply reinforces the view that this is a tax and spend government.
Political pressure for increased spending is likely to increase as the country moves towards May local elections and beyond that a general election. It is too early to hang out the fiscal bunting.
Gift horse
Maybe the US President isn’t so bad after all. In my post this week was a letter from ‘Donald Trump’s Federal Trade Commission’ and a cheque for $51.
The US President has reached a settlement with Amazon over allegations that the online giant was in violation of the US ‘Restore Online Shoppers’ Confidence Act’ in respect of its Prime service.
Time that the UK and European governments responded to complaints from retailers. They should follow Trump’s lead by going after Amazon over the unfairness of modest tax payments.
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