The Exchanges

Q need great assets to invest in. How this is, um, why are so many companies not choosing to list in the UK? Well, I interviewed Nick at Ravni, I think about the fastest growing technology companies, and I asked him, are you going to list it? I want them to list it. I love London, I walk past here with my mum, and they go, no, no, America, all day.

A Yep. So, the honest answer is that the perception and the reality are not the same thing. So, in the last 10 years, only 20 UK companies have listed in the US that have raised over a hundred million. Ok. Of those, nine have already delisted, only four are trading up and the rest are trading down by over 80%. That's the data as of today. Ok. So the idea that the grass is always greener in the U.S., not true. The challenge for a company under a certain size in the U.S. is the U.S. market works incredibly well for the Mac seven. It doesn't work as well when you're smaller. The investor base is predominantly domestic. Um, they will, if you're not in a major index where 60% of the US market is now tracking a major index, then the risk is that you'll get forgotten. You'll get sold on a headline because something happens in the UK or something happens in Europe or another one of your major markets, but you won't have that indexation dragged back, which is half why we've seen the performance that we have in terms of the companies that have gone to the US. Um, I understand why that's not the perception. I understand why the media narrative is different. I understand why there's some investment banks who want People to go to the U.S. because they make double the fees. I get it. The simple reality is that the narrative that we've pushed in the media and the actual data as to what the expe…

AI assessment note: “the perception and the reality are not the same thing.”

Q How did that happen? Like, what were the core moments that that was the disconnection?

A Well, I think in, in retail, I think it's been a combination of regulatory reform. Um, we've created a challenging environment for our regulators, where if something goes wrong, they wind up in front of Parliament. Their natural instinct as a consequence is to make the things that they're responsible for harder and harder to do. They put higher and higher walls up. And so under the guise of protecting retail, we've arguably disenfranchised them a bit. We've made it harder to access advice. We've made it harder for them to access regulated markets, um, and yet our user journey in the cryptocurrency world is incredibly straightforward, you know, and actually I want people to feel that they've got a stake in their economy, in the companies that are going to create the jobs, the innovation, the growth, the productivity that pays for the NHS and pays for our defense. That's what we all, I think, care about as Brits, and yet we've sort of disconnected people from that. So that's sort of one leg. The other leg is What we did on pension reform many, many years ago. So after the mirror pension scandal, um, we basically did two things. We brought a company-defined benefit pension schemes on balance sheet. You're probably not old enough to remember when we used to refer to British Airways as a small airline with a large pension fund attached. But we did. Um, and we then put an accounting …

AI assessment note: “a combination of regulatory reform... The other leg is What we did on pension reform”

Q How did that happen? Like, what were the core moments that that was the disconnection?

A Well, I think in, in retail, I think it's been a combination of regulatory reform. Um, we've created a challenging environment for our regulators, where if something goes wrong, they wind up in front of Parliament. Their natural instinct as a consequence is to make the things that they're responsible for harder and harder to do. They put higher and higher walls up. And so under the guise of protecting retail, we've arguably disenfranchised them a bit. We've made it harder to access advice. We've made it harder for them to access regulated markets, um, and yet our user journey in the cryptocurrency world is incredibly straightforward, you know, and actually I want people to feel that they've got a stake in their economy, in the companies that are going to create the jobs, the innovation, the growth, the productivity that pays for the NHS and pays for our defense. That's what we all, I think, care about as Brits, and yet we've sort of disconnected people from that. So that's sort of one leg. The other leg is What we did on pension reform many, many years ago. So after the mirror pension scandal, um, we basically did two things. We brought a company-defined benefit pension schemes on balance sheet. You're probably not old enough to remember when we used to refer to British Airways as a small airline with a large pension fund attached. But we did. Um, and we then put an accounting …

AI assessment note: “a combination of regulatory reform... The other leg is What we did on pension reform”

Q Everyone says also the scale of the buy book here just is so immeasurably different compared to the US. Is that not true also?

A Look, 60% of the investors in the UK are international investors. So the same people who can buy you in New York can buy you in London. Um, the key issue is, do you want, ah, indexed inclusion? You're not going to get indexed inclusion in the first year in the US, and you might not get it at all. You don't get into the S&P 500 unless you've either got substantively all your revenues in the US, or you're a US-based company. And even then, it's not a direct thing. If you come in in the top 75% of the FTSE 100 in terms of what valuation you'd be when you IPO, you can go in in five days. So all of that index money would follow you on day one because they'd have to. You can also get access to all of the major institutions in the US. So it, again, the narrative and the actual reality are very, very different. And certainly what I've heard from talking to companies in the last Year or so is that increasingly if you are absolutely, if you're a 10 to twenty billion company, don't go to the U.S. because you'll get lost. Um, there have actually been, I talked about the 20 companies that have raised over a hundred million going from the U.K. to the U.S. There are six that have come the other way, actually from the U.S. to the U.K. in that time as well. In addition, um, two of the most successful IPOs in, uh, on the AIM market, so our growth market last year were North American companies, o…

AI assessment note: “the narrative and the actual reality are very, very different.”

Q need great assets to invest in. How this is, um, why are so many companies not choosing to list in the UK? Well, I interviewed Nick at Ravni, I think about the fastest growing technology companies, and I asked him, are you going to list it? I want them to list it. I love London, I walk past here with my mum, and they go, no, no, America, all day.

A Yep. So, the honest answer is that the perception and the reality are not the same thing. So, in the last 10 years, only 20 UK companies have listed in the US that have raised over a hundred million. Ok. Of those, nine have already delisted, only four are trading up and the rest are trading down by over 80%. That's the data as of today. Ok. So the idea that the grass is always greener in the U.S., not true. The challenge for a company under a certain size in the U.S. is the U.S. market works incredibly well for the Mac seven. It doesn't work as well when you're smaller. The investor base is predominantly domestic. Um, they will, if you're not in a major index where 60% of the US market is now tracking a major index, then the risk is that you'll get forgotten. You'll get sold on a headline because something happens in the UK or something happens in Europe or another one of your major markets, but you won't have that indexation dragged back, which is half why we've seen the performance that we have in terms of the companies that have gone to the US. Um, I understand why that's not the perception. I understand why the media narrative is different. I understand why there's some investment banks who want People to go to the U.S. because they make double the fees. I get it. The simple reality is that the narrative that we've pushed in the media and the actual data as to what the expe…

AI assessment note: “the honest answer is that the perception and the reality are not the same thing.”

Q Can I ask, if you have the same investor base that is kind of cross-pooling, so to speak, or accessing the UK markets as well as the US, why not, is it not just a dual listing future, where we say, hey, can we do New York and London?

A Well, look, I think in some regards, some, some of the biggest UK companies already do that. They do a primary listing here, and then they do an ADR into the US. The GSKs, et cetera, the world do all of that. Um, and that is absolutely fine. But I think we also have to think about, I mean, Arm is a really good example. When Arm came back to the market, they, what, they IPO'd about, what, fifty two billion, um, went up in the first year to a hundred and fifty billion. Now that was, that was an awful lot of the Um, AI trade, which I'm utterly convinced would have happened in London as much as it happened anywhere else. I don't think, I think it's a, you can't prove a negative, but I think it's a falsity to say a London market wouldn't have valued that the same way. In the first period of time after they listed only one percent of the investor base in Arm, which is a great British company based in Cambridge, coming out of our ecosystem, was owned by UK investors. Not one of our major pension funds had them as one of their major investments. And retail couldn't buy it because of the structure of the way it was done. Ok, so if we say we're indifferent to where a company lists, we're basically indifferent to the UK investor being exposed to the upside of the value that UK based companies can generate. That can't be right, you know. We, we, we tend to think of these things as an asset…

AI assessment note: “some of the biggest UK companies already do that. They do a primary listing here”

Q It's a beautiful view. I would love to start with a little bit of context. So how did you come to be CEO of London Stock Exchange? And take me to the moment when you accepted and took on the role.

A Oh my word. Um, by accident is the, is the honest answer to the question. So I always describe my career as a series of answering exam questions. So I'm actually a sociologist who specialised in Sub-Saharan East Africa by training. Went into the city to find out how Malawi operated in the global economy, and I've answered a series of exam questions ever since. And in the summer of 2020, Apple was worth more than the FTSE 100 for the first time. I was then at the FCA as Director of Market Oversight, and that evening I literally wrote down everything I thought that I could try and influence to change it so that that didn't happen again. The next day the phone rang, and it was a headhunter, and her first question was, why haven't you applied for the LSE job? So I was like, well, I know the exam question I want to answer. Um, should I stay at the FCA where I've got a certain amount of influence over how our markets function? Um, or should I explore coming to the LSE? And the rest is history.

AI assessment note: “by accident is the, is the honest answer to the question.”

Q Can I ask, what you wanted to change when you came in, is that very different to what you see now as the core objectives you still need to change, or have they stayed the same?

A The theme has stayed very similar. My theory was the UK has all the raw ingredients, you know, so we have world leading universities. We have some remarkable entrepreneurship going on already and startup culture in this country. Um, we create more unicorns than anywhere outside the US and China, and we're a world leading capital market by any measure. Um, we don't think of ourselves that way and we don't talk about ourselves that way as a nation, but actually we have all of those raw ingredients. The city has done a very good job over the last 30 years of driving the UK's place as a global financial center. It's done a less good job of driving the UK domestic economy. And so the key question was those things don't need to be oppositional. You can walk and chew gum at the same time. You know, you can aim to do both.

AI assessment note: “The theme has stayed very similar.”

Q Why has the city not done that for the domestic economy?

A I think in part, um, because of the strength of our role as the locus of the EU single market. You know, when you're serving everybody everywhere across the EU, um, you can get a bit disconnected from your own domestic economy. And I think some of the regulatory changes serve to do that as well. We used to have behemothic pension funds that invested a huge amount of their assets in driving risk capital into our economy, and when we did, our growth rates were as high as anywhere else in the world, and our capital markets were as vibrant as anywhere else in the world. Those two things alone we've unpacked over the last 20 or 30 years, and we've disconnected society from our capital markets.

AI assessment note: “because of the strength of our role as the locus of the EU single market.”

Q In terms of like risk on mindset within pension funds, what, what is the thing that actually really enables that? It's the saying, hey, you have to have five percent in private companies in the UK and around the world. That is the rule that will enable that.

A I think it's going to be a combination of things. I think the, the fundamental thing is returns. So if you look at, say, the performance of Canadian and Australian pension funds, they tend to pay higher fees than the fees that are being paid by UK pension funds, but they make higher real returns. You know, their net return is higher, and the compounding value of high real returns to the individual pensioner is huge. You know, one percent in real return increase every year. Just think about it. It's, it's, it's eye-watering that we weren't having this conversation as a country, and some of the things that we had done were perverse. We basically created a world where, um, cheap was good, you know, for financial services. You know, it's like, I don't know, it's a bad way of thinking about it, but if I was ever charged with a crime I didn't commit, I wouldn't want a cheap lawyer defending me, you know. It's sort of, we created this idea that for For, for retail consumers of financial services, you, you wanted a cheap, cheap product, and, and that's not the right way to think about it. In a value added industry, you want to incentivize people to continue to add value, and that, that produces the best possible product. And that's the model that's used around the world. You know, the Canadian pension funds or the Australian pension funds employ very good fund managers, do so on a big …

AI assessment note: “I think the, the fundamental thing is returns.”

Q Do you think it's a good marketing message to say to CEOs, hey, be a big fish in a small pond?

A I think it's a big fish in a big pond. Look, I mean, we are the second largest equity capital market in the world in a free market economy. Okay. And I think that's the thing that gets lost. Now, If you want to, um, essentially be able to only guarantee your indexation, and, and therefore your support from 60% of the investor base, if you decide to redomicile or relocate to the US, then, and, and substantially all your operations are there, then the US market may be right for you. The UK allows you to have all the indexation, all the access to the investors, um, a higher liquidity, actually turnover rate for your shares available, um, And you can stay in the UK if that's where you come from, or if you're an international company, you can get access to those things without having to re-domicile. The US market basically has some pretty strict demands on companies and increasingly incentivizes them to, to move into the, to become a US company if they want to get the true benefit being in the US market.

AI assessment note: “I think it's a big fish in a big pond.”

Q Can I ask, what you wanted to change when you came in, is that very different to what you see now as the core objectives you still need to change, or have they stayed the same?

A The theme has stayed very similar. My theory was the UK has all the raw ingredients, you know, so we have world leading universities. We have some remarkable entrepreneurship going on already and startup culture in this country. Um, we create more unicorns than anywhere outside the US and China, and we're a world leading capital market by any measure. Um, we don't think of ourselves that way and we don't talk about ourselves that way as a nation, but actually we have all of those raw ingredients. The city has done a very good job over the last 30 years of driving the UK's place as a global financial center. It's done a less good job of driving the UK domestic economy. And so the key question was those things don't need to be oppositional. You can walk and chew gum at the same time. You know, you can aim to do both.

AI assessment note: “The theme has stayed very similar. My theory was the UK has all the raw”

Q What is the outcome we want to achieve?

A We basically need to be able to use our own resources and our own capacity to invest to back ourselves as a nation. It's, it's very simple, but to do so in a way that means that we actually do it for the way companies are formed today. If you look at quite a lot of the large private companies today, the next ticket they need, their VCs and PEs aren't necessarily in a position to write, you know, because actually they're now so big that they need the public markets as a takeout because that's where the true scale is in the capital. If you want to start having pension funds invest in you at an earlier stage as a private company, you need to be able to operate in a way that they can operate to as well within the regulatory constraints that they operate in.

AI assessment note: “use our own resources and our own capacity to invest to back ourselves as a nation”

Q If you could do anything without fear of repercussion or structure or decision making from teams or anyone else, What would you do to enable progress, growth, innovation?

A If I had a magic one, I, I would describe this as sort of the DeLorean package without, without the bankrupt Northern Irish car company. In other words, it's back to the future. Um, we used to back ourselves as a nation. You know, we used to have, um, structures and tax incentives to invest in the UK. At that point, we had some of the highest investment rates, highest growth rates, largest capital market in the world. We gradually took those incentives away. Um, and then assumed everybody else would invest in us if we weren't investing in ourselves. So to me, it's about a proper conversation as a country about how we take these enormous pools of capital that we actually have, and we are re-incentivized to invest in ourselves. Now, I think that becomes a virtuous circle very quickly. Once you start getting into the habit of it, it, it will be maintained. So I think that's one thing. It's basically making sure that we incentivize domestic flows of capital. But the other thing is the culture, and that's the glove in the five fingers in a glove. It's how we talk about it round here. It's how we celebrate entrepreneurship, how we recognize people like you and what you've done and what you've built, and that actually, um, there is something remarkable about a founder's journey that we should be really proud of how many of them we have in this country. I always jokingly say, um, that …

AI assessment note: “making sure that we incentivize domestic flows of capital. But the other thing is the culture”

Q What concerns you most in the world today?

A This conversation alone illustrates that things aren't binary, things are complicated, there's lots of shades of grey. We don't create much space to have those truly fundamental conversations about those shades of grey. We create a lot of space to say, well, I'm on this side of the argument, and you're on that side of the argument, and I'm going to shoot my metaphorical arrows at you. Um, how we find the space to actually have the nuanced understanding about how you balance, for example, um, the cost of transition to Um, the cost of transition to net zero, and the consequences of doing so, and the demands it's going to place on people, um, recognizing that actually it's not all binary, but it's been constructed as such, and there are trade-offs, and society needs to agree those. We need to find spaces to have those conversations. Algorithms that...

AI assessment note: “We don't create much space to have those truly fundamental conversations”

Q Why has the city not done that for the domestic economy?

A I think in part, um, because of the strength of our role as the locus of the EU single market. You know, when you're serving everybody everywhere across the EU, um, you can get a bit disconnected from your own domestic economy. And I think some of the regulatory changes serve to do that as well. We used to have behemothic pension funds that invested a huge amount of their assets in driving risk capital into our economy, and when we did, our growth rates were as high as anywhere else in the world, and our capital markets were as vibrant as anywhere else in the world. Those two things alone we've unpacked over the last 20 or 30 years, and we've disconnected society from our capital markets.

AI assessment note: “because of the strength of our role as the locus of the EU single market.”

Q If we think about that then, number one, you said about the regulatory, um, enhancements or additions, which have made it harder to access different products. Um, do we need to deregulate then? And if so, what do we need to do to deregulate effectively?

A Deregulation, I think is the wrong word, because I think that, that sends people sort of running for the hills as a sort of fear. Um, and this isn't a bonfire of regulation or any of the things that sort of people have accused it of. I think it is about getting back to what do we regulate for? You know, what are the outcomes we want to achieve? And I was saying this to someone the other day that, that very often when you write regulation, you've got a very well-intentioned thing that you want to achieve. And then your regulation creates a policy for how you achieve it. But then nobody checks, and then everybody fixates on following the policy and forgets to check whether the policy produced the outcome that they wanted in the first place. If we want financially literate, properly enfranchised retail investors who have a stake in society, have a good savings rate, and that we reinvest in our own economy, that should be the objective. You know, if, if when we had done our pension reforms in the, whenever we did the nineties, we'd had, okay, 54% of all the investment in our capital market is, uh, UK pension funds and insurance. That's the investment in domestic risk capital that we want as a nation. Let's monitor it and make sure that we don't have a deleterious effect on that investment when we make these changes. We'd have had a conversation about pension reform 20 years ago, no…

AI assessment note: “Deregulation, I think is the wrong word, because I think that, that sends people”

Q Do you not think if a delivery was in the US it would be valued differently? Um, that feels like a business that is hit hard by a UK mindset around the type of business that it is, the low margin nature of it, and it's just too difficult for us to wrap our heads around.

A I think that's a company that's also had other challenges and other transactions that have, have had an impact on the valuation. But so I, I look, I'll give you an example. When I'm listed here, traded at a higher valuation multiple than any of its peers anywhere in the world. So it's, again, the right company with the right story is going to get access to exactly the same investors. They're going to do it more cheaply and less cost, less costly than they would in the US. They're going to get indexation immediately if they're a UK company. They're going to get the same liquidity they would in the US. They're not going to pay fees anything like the same amount. Um, and they can do a, an ADR in the US and get exposure to the incremental investor base you might not buy in London, but that isn't all the major funds that would, would buy them in London.

AI assessment note: “the right company with the right story is going to get access to exactly the same investors.”

Q Do you think it's a good marketing message to say to CEOs, hey, be a big fish in a small pond?

A I think it's a big fish in a big pond. Look, I mean, we are the second largest equity capital market in the world in a free market economy. Okay. And I think that's the thing that gets lost. Now, If you want to, um, essentially be able to only guarantee your indexation, and, and therefore your support from 60% of the investor base, if you decide to redomicile or relocate to the US, then, and, and substantially all your operations are there, then the US market may be right for you. The UK allows you to have all the indexation, all the access to the investors, um, a higher liquidity, actually turnover rate for your shares available, um, And you can stay in the UK if that's where you come from, or if you're an international company, you can get access to those things without having to re-domicile. The US market basically has some pretty strict demands on companies and increasingly incentivizes them to, to move into the, to become a US company if they want to get the true benefit being in the US market.

AI assessment note: “I think it's a big fish in a big pond.”

Q How do we get rid of stamp duty?

A I'm working on it. I think you start tapering it. So, so one of the things that we've been looking at is, um, If, if the UK can encourage and provide incentives, and that's a lot of discussion at the moment, to make sure that our, uh, pension funds are incentivized to invest in the UK, which is what we used to do when we had dividend tax credits. Um, we, we give people tax breaks to keep their money in cash in the UK in form of a hundred percent cash ices. Now, cash ices are very, very important for people who need a safety net and to be encouraged to save, but it doesn't need to be a hundred percent of everybody's total lifetime allowance. So, If you did those two things, you'd see a potentially pretty significant increase in the amount of flows already into UK equities, which would increase the government's revenue on stamp. That would then mean that you could start tapering it around, for example, retail tickets and under a certain size, to, to just re-incentivize retail participation in our market and get rid of the friction associated with it, and then start tapering it from there. You're not going to be able to go, please, can I just take Four billion out of the exchequer. You know, in, in a world where the chancellor has got the disciplines that she's got around the OBR, you can't do that. So you can't just say, get rid of it. You, you've got to come up with a mechanism …

AI assessment note: “I think you start tapering it.”

Q Can I ask, if you have the same investor base that is kind of cross-pooling, so to speak, or accessing the UK markets as well as the US, why not, is it not just a dual listing future, where we say, hey, can we do New York and London?

A Well, look, I think in some regards, some, some of the biggest UK companies already do that. They do a primary listing here, and then they do an ADR into the US. The GSKs, et cetera, the world do all of that. Um, and that is absolutely fine. But I think we also have to think about, I mean, Arm is a really good example. When Arm came back to the market, they, what, they IPO'd about, what, fifty two billion, um, went up in the first year to a hundred and fifty billion. Now that was, that was an awful lot of the Um, AI trade, which I'm utterly convinced would have happened in London as much as it happened anywhere else. I don't think, I think it's a, you can't prove a negative, but I think it's a falsity to say a London market wouldn't have valued that the same way. In the first period of time after they listed only one percent of the investor base in Arm, which is a great British company based in Cambridge, coming out of our ecosystem, was owned by UK investors. Not one of our major pension funds had them as one of their major investments. And retail couldn't buy it because of the structure of the way it was done. Ok, so if we say we're indifferent to where a company lists, we're basically indifferent to the UK investor being exposed to the upside of the value that UK based companies can generate. That can't be right, you know. We, we, we tend to think of these things as an asset…

AI assessment note: “some of the biggest UK companies already do that... and that is absolutely fine.”

Q If we think about that then, number one, you said about the regulatory, um, enhancements or additions, which have made it harder to access different products. Um, do we need to deregulate then? And if so, what do we need to do to deregulate effectively?

A Deregulation, I think is the wrong word, because I think that, that sends people sort of running for the hills as a sort of fear. Um, and this isn't a bonfire of regulation or any of the things that sort of people have accused it of. I think it is about getting back to what do we regulate for? You know, what are the outcomes we want to achieve? And I was saying this to someone the other day that, that very often when you write regulation, you've got a very well-intentioned thing that you want to achieve. And then your regulation creates a policy for how you achieve it. But then nobody checks, and then everybody fixates on following the policy and forgets to check whether the policy produced the outcome that they wanted in the first place. If we want financially literate, properly enfranchised retail investors who have a stake in society, have a good savings rate, and that we reinvest in our own economy, that should be the objective. You know, if, if when we had done our pension reforms in the, whenever we did the nineties, we'd had, okay, 54% of all the investment in our capital market is, uh, UK pension funds and insurance. That's the investment in domestic risk capital that we want as a nation. Let's monitor it and make sure that we don't have a deleterious effect on that investment when we make these changes. We'd have had a conversation about pension reform 20 years ago, no…

AI assessment note: “Deregulation, I think is the wrong word, because I think that, that sends people”

Q How do we get rid of stamp duty?

A I'm working on it. I think you start tapering it. So, so one of the things that we've been looking at is, um, If, if the UK can encourage and provide incentives, and that's a lot of discussion at the moment, to make sure that our, uh, pension funds are incentivized to invest in the UK, which is what we used to do when we had dividend tax credits. Um, we, we give people tax breaks to keep their money in cash in the UK in form of a hundred percent cash ices. Now, cash ices are very, very important for people who need a safety net and to be encouraged to save, but it doesn't need to be a hundred percent of everybody's total lifetime allowance. So, If you did those two things, you'd see a potentially pretty significant increase in the amount of flows already into UK equities, which would increase the government's revenue on stamp. That would then mean that you could start tapering it around, for example, retail tickets and under a certain size, to, to just re-incentivize retail participation in our market and get rid of the friction associated with it, and then start tapering it from there. You're not going to be able to go, please, can I just take Four billion out of the exchequer. You know, in, in a world where the chancellor has got the disciplines that she's got around the OBR, you can't do that. So you can't just say, get rid of it. You, you've got to come up with a mechanism …

AI assessment note: “I think you start tapering it.”

Q What is the outcome we want to achieve?

A We basically need to be able to use our own resources and our own capacity to invest to back ourselves as a nation. It's, it's very simple, but to do so in a way that means that we actually do it for the way companies are formed today. If you look at quite a lot of the large private companies today, the next ticket they need, their VCs and PEs aren't necessarily in a position to write, you know, because actually they're now so big that they need the public markets as a takeout because that's where the true scale is in the capital. If you want to start having pension funds invest in you at an earlier stage as a private company, you need to be able to operate in a way that they can operate to as well within the regulatory constraints that they operate in.

AI assessment note: “use our own resources and our own capacity to invest to back ourselves”

Q Everyone says also the scale of the buy book here just is so immeasurably different compared to the US. Is that not true also?

A Look, 60% of the investors in the UK are international investors. So the same people who can buy you in New York can buy you in London. Um, the key issue is, do you want, ah, indexed inclusion? You're not going to get indexed inclusion in the first year in the US, and you might not get it at all. You don't get into the S&P 500 unless you've either got substantively all your revenues in the US, or you're a US-based company. And even then, it's not a direct thing. If you come in in the top 75% of the FTSE 100 in terms of what valuation you'd be when you IPO, you can go in in five days. So all of that index money would follow you on day one because they'd have to. You can also get access to all of the major institutions in the US. So it, again, the narrative and the actual reality are very, very different. And certainly what I've heard from talking to companies in the last Year or so is that increasingly if you are absolutely, if you're a 10 to twenty billion company, don't go to the U.S. because you'll get lost. Um, there have actually been, I talked about the 20 companies that have raised over a hundred million going from the U.K. to the U.S. There are six that have come the other way, actually from the U.S. to the U.K. in that time as well. In addition, um, two of the most successful IPOs in, uh, on the AIM market, so our growth market last year were North American companies, o…

AI assessment note: “the same people who can buy you in New York can buy you in London”

Q In terms of like risk on mindset within pension funds, what, what is the thing that actually really enables that? It's the saying, hey, you have to have five percent in private companies in the UK and around the world. That is the rule that will enable that.

A I think it's going to be a combination of things. I think the, the fundamental thing is returns. So if you look at, say, the performance of Canadian and Australian pension funds, they tend to pay higher fees than the fees that are being paid by UK pension funds, but they make higher real returns. You know, their net return is higher, and the compounding value of high real returns to the individual pensioner is huge. You know, one percent in real return increase every year. Just think about it. It's, it's, it's eye-watering that we weren't having this conversation as a country, and some of the things that we had done were perverse. We basically created a world where, um, cheap was good, you know, for financial services. You know, it's like, I don't know, it's a bad way of thinking about it, but if I was ever charged with a crime I didn't commit, I wouldn't want a cheap lawyer defending me, you know. It's sort of, we created this idea that for For, for retail consumers of financial services, you, you wanted a cheap, cheap product, and, and that's not the right way to think about it. In a value added industry, you want to incentivize people to continue to add value, and that, that produces the best possible product. And that's the model that's used around the world. You know, the Canadian pension funds or the Australian pension funds employ very good fund managers, do so on a big …

AI assessment note: “I think it's going to be a combination of things. I think the, the fundamental thing is returns.”

Q Do you think we will be able to move the investor mindset within those pension funds to invest in higher risk growth assets in the UK?

A Well, this is partly where Pisces, the crossover market, comes in. Because the logic is that those pension funds at the moment, we have had a mindset of regulating our pension funds on cost, um, and therefore cheap is good, and private companies are not cheap to originate. You know, the ability to actually understand them and track, and then you have to start with a small ticket, all that kind of stuff, is not straightforward to do. This is partly about connecting these dots. So if you, if you look at, in the third finger of the third finger of the glove, which is the Pension and retail reform. Um, then we've also had a thing called the Mansion House Compact, which is, so our 11 largest defined, default defined contribution schemes have committed to committing five percent of their total assets to private companies by 20 30. And they are now-

AI assessment note: “11 largest defined, default defined contribution schemes have committed to committing five percent”

Q If you could do anything without fear of repercussion or structure or decision making from teams or anyone else, What would you do to enable progress, growth, innovation?

A If I had a magic one, I, I would describe this as sort of the DeLorean package without, without the bankrupt Northern Irish car company. In other words, it's back to the future. Um, we used to back ourselves as a nation. You know, we used to have, um, structures and tax incentives to invest in the UK. At that point, we had some of the highest investment rates, highest growth rates, largest capital market in the world. We gradually took those incentives away. Um, and then assumed everybody else would invest in us if we weren't investing in ourselves. So to me, it's about a proper conversation as a country about how we take these enormous pools of capital that we actually have, and we are re-incentivized to invest in ourselves. Now, I think that becomes a virtuous circle very quickly. Once you start getting into the habit of it, it, it will be maintained. So I think that's one thing. It's basically making sure that we incentivize domestic flows of capital. But the other thing is the culture, and that's the glove in the five fingers in a glove. It's how we talk about it round here. It's how we celebrate entrepreneurship, how we recognize people like you and what you've done and what you've built, and that actually, um, there is something remarkable about a founder's journey that we should be really proud of how many of them we have in this country. I always jokingly say, um, that …

AI assessment note: “making sure that we incentivize domestic flows of capital.”

Q Do you think we will be able to move the investor mindset within those pension funds to invest in higher risk growth assets in the UK?

A Well, this is partly where Pisces, the crossover market, comes in. Because the logic is that those pension funds at the moment, we have had a mindset of regulating our pension funds on cost, um, and therefore cheap is good, and private companies are not cheap to originate. You know, the ability to actually understand them and track, and then you have to start with a small ticket, all that kind of stuff, is not straightforward to do. This is partly about connecting these dots. So if you, if you look at, in the third finger of the third finger of the glove, which is the Pension and retail reform. Um, then we've also had a thing called the Mansion House Compact, which is, so our 11 largest defined, default defined contribution schemes have committed to committing five percent of their total assets to private companies by 20 30. And they are now-

AI assessment note: “our 11 largest defined, default defined contribution schemes have committed to committing five percent”

Q Do you think Brexit hurt or helped the UK markets in the long term?

A I think making sure that when you have to rely on your own recognizance, as it were, because the city got bigger every year because the single market got bigger, you know, but actually going, okay, what is our job both to drive our place as a global financial center and to drive the UK economy? And are we properly structured to do that? I think it forced us to have that conversation in a way that we might not have had as thoroughly otherwise. Um, and we have always had a globally significant Capital market, you know, and this is the thing that is sort of forgotten in, for most of the first few weeks of January, we were the largest equity capital market in the world by capital raised, ahead of NASDAQ. Um, we are the, I mean, as of today, if you take the 20, 24, 25 numbers by total capital raised, the only equity capital market countries in the world that are bigger than us are the US and India. Everywhere else is behind us. We're the only European market in the top 10, and we raised more equity capital last year than the next three European venues combined. We forget that as a nation. We fixate constantly on the US. Um, yes, the US is a huge capital market, um, but if you want great companies to be able to start here, grow here, scale here, and stay here, if you want UK investors to have access to the best possible fast-growing assets that give them the right returns that mean t…

AI assessment note: “I think it forced us to have that conversation in a way that we might not”