Corporate Finance soundbite: Mergerspresso

Lucy Robson

Welcome to Mergerspresso. I'm Lucy Robson and I'm absolutely delighted to be joined by Michael Moore, Chief Executive of UK Private Capital, for a rapid-fire tour of what's shaping the UK's investment landscape. Well, in five minutes or so, caffeine strength. Michael, it's absolutely great to have you. Thank you for coming, what are you drinking today?

Michael Moore

I have been enjoying a range of caffeine, but I'm now at that point in the day where sparkling water is probably the safest thing.

Lucy Robson

Fair enough. Well let's get into it. Michael, you've talked very persuasively about private capital's role in making the UK competitive and what role should private capital play, do you think, to help the UK sharpen its competitive edge globally?

Michael Moore

This is a fast-changing world, where lots of traditional economies are under stress and strain and where policymakers in government and elsewhere need help to deliver economic growth. In our industry we have a forty, fifty-year track record of finding the businesses with the most potential and then really backing them to deliver that growth. Whether you're looking at venture capital, which is looking at everything from the spin outs or startups through to big globally significant tech businesses on the one hand, or in private equity, small or medium sized or huge businesses that are given the capital, given the know-how, active ownership for seven years or longer, and they are rewired and with it the rest of the economy. If ever we need that kind of approach, it is now. And what's great is that private capital is delivering hugely on all of that.

Lucy Robson

Yeah, it's amazing, it really is, and I know you've just returned from a trip to the US meeting investors, policymakers – what were your biggest takeaways on how the UK was perceived and what do you hear from that that you think we should be focusing on?

Michael Moore

Private equity venture capital, of course, are most synonymous with the United States of America. What we're delighted about is that here in the UK, not just in London, across the whole country, we have the largest ecosystem of private capital anywhere in the world outside the USA. Now, to keep that going, we need capital from international sources, not least of which the USA. What was encouraging on the visit was the continued interest in what's going on. Dare I say it, there's an interesting political backdrop to what is going on and the chance to diversify where people are invested is one small part of it. But for the UK, what is absolutely critical is that we have a globally significant regulatory system that gives allocators a capital confidence to put their money to work here. And that there's then an opportunity set which will give them the returns. And in our ecosystem, whether it's the professional services that you represent or the investors themselves, we have something rather special. It gives the UK a competitive advantage and I think the Americans, those from Asia, those from the Middle East are very much signed up for this.

Lucy Robson

Yeah and it’s interesting, we're kind of seeing that carry through in the sustained interest in UK assets from overseas buyers. Do you think we should be celebrating that, or do you think that's something we should be concerned about?

Michael Moore

When we look at what's happening on the stock exchange and the public markets, I understand the frustration when some valuation makes UK assets look more attractive and they may go. You might expect me to say this, but where they're taken into private hands, the intention is to maintain them and invest further in them and make them even more competitive than they were. The broader ecosystem has to remain competitive, however. That's where we focus our attention because unless the allocators of capital are confident that the UK is regulated to global standards and that it has an investment environment that will continue to attract individuals with firms, that what they then invest in is almost irrelevant unless all of that is in place first. I'm pleased that we are well engaged with all the different stakeholders, it's a shared agenda and while it is frustrating when UK assets appear to go into foreign ownership, the reality is that there are others that will come through and will continue to make the UK a really strong place, both in private markets and public markets.

Lucy Robson

I think that's an interesting take on things and, you know, on the subject of the public markets in particular, there's been a lot of discussion about the need for a clearer narrative around London, both privately and publicly, and what that stands for. I mean, how do you see the narrative around London? What, you know, what do you think London should stand for in the next chapter?

Michael Moore

London, whether we're talking specifically about the stock exchange or more broadly about this globally significant financial sector, I mean, in all the surveys and the assessments, London sits first or second globally. That is an amazing thing. Of course, the activity is dispersed across lots of different parts of financial services, capital markets, professional services, but it's all there for the greater good. We need to make sure we don't talk ourselves down. That is always a great British trait, and we need to make sure that all parts of the UK value and appreciate what London brings to the UK as a whole. I think it's obvious to people like you and me, sometimes not so to others. Equally, we need to accept that there will be tensions between public markets and private markets, but ultimately it cannot, we cannot let it be a zero-sum game - it's much greater than that. And if everybody's thriving, that's for the greater good over the whole country.

Lucy Robson

That's very fair. And just to end quickly, we're starting to see IPO's re-emerging as a viable exit route after a fairly long lull, let's say. What signals are you seeing for IPOs in the market?

Michael Moore

When we survey industry leaders to take the temperature on this, which we do pretty regularly, it's not a surprise that for the last couple of years it's been fairly muted about what those IPO prospects look like. I have to say in our more recent surveys, the confidence and expectation, perhaps more importantly, is growing that there will be IPO's. Of course it's competitive, doesn't need to be here in London or the UK, but I'm confident that London has a competitive offer and as a result of that there should be a nice return to IPO and using the public markets to their fullest extent.

Lucy Robson 

That feels like the perfect note to end on. That's your shot of Deal Insight for today, Michael, thank you so much for joining us and thank you for your sharp takeaways. Catch us again next time. and thanks, Michael. 

Michael Moore

Thank you.