Pension Investment and the Mansion House Compact with Nicholas Lyons

In this episode of Oxford+, host Susannah de Jager is joined by Nicholas Lyons, former Lord Mayor of the City of London and chair of the Phoenix Group, the UK's largest pension provider. The discussion revolves around the Mansion House Compact, a commitment by insurance companies and pension funds to invest 5% of their capital into UK unlisted companies and infrastructure by 2030. Nicholas shares his insights on the importance of infrastructure investment, the growth economy, pensions, and financial literacy.

(0:12) Introduction
(2:53) The private sector and economic growth
(7:38) The Mansion House Compact outcomes
(18:28) How governmental input can stimulate investment
(23:35) Gaps in the university ecosystem
(37:28) Looking to the future

About the guest:
Nicholas Lyons is the former Lord Mayor of the City of London, a position he held following a 21-year career in executive roles in investment banking. In his current role, as the Chair of the Phoenix Group, the UK's largest pension provider, Nicholas' leadership has left an enduring mark on the financial landscape, highlighted by his advocacy for the Mansion House Compact, through which insurance companies and pension funds committed to invest 5% of their capital into UK-listed companies and infrastructure by 2030.

Connect with Nicholas on LinkedIn

About the host:
Susannah de Jager is a seasoned professional with over 15 years of experience in UK asset management. She has worked closely with industry experts, entrepreneurs, and government officials to shape the conversation around domestic scale-up capital.

Connect with Susannah on LinkedIn

Visit our website to learn more and subscribe to our newsletter - oxfordplus.co.uk
If you have a question for Susannah, please get in touch - oxfordplus.co.uk/contact

Oxford+ is hosted by Susannah de Jager, supported by Mischon de Reya and produced and edited by Story Ninety-Four in Oxford.

Creators & Guests

Host

Susannah de Jager

Founder & Host of Oxford+

Producer

Matt Eastland-Jones

Founder & Producer at Story Ninety-Four

Editor

Nick Short

Podcast Producer & Audio Technician at Story Ninety-Four

What is Oxford+?

Welcome to Oxford+, the podcast series that explores the myths and truths of the Oxford investing landscape hosted by Susannah de Jager. Since moving to Oxford, Susannah has collaborated with experts, entrepreneurs, and government to shape the conversation around domestic scale-up capital. Oxford+ aims to inform, inspire, and connect. We'll talk to Founders, investors, academics, politicians, and facilitators and explore how Oxford is open for business.

Welcome to this episode of Oxford+.

My guest today is Nick Lyons.

Nick started his career in political
research in London and then Brussels

before moving into investment banking
with a career spanning 21 years.

From his executive roles in banking, he
then moved into the non-executive phase

of his career, focusing predominantly
on insurance companies, most recently

as chair of the Phoenix Group,
the UK's largest pension provider.

Nick took a year out from Phoenix to
become Lord Mayor of the City of London,

a role which he has just finished.

Of particular interest to this discussion
is his involvement in the Mansion House

Compact which, together with Jeremy Hunt,
he promoted during his mayoral year.

The Mansion House Compact committed
insurance companies and pension funds

to a framework promising to invest 5
percent of their capital into UK unlisted

companies and infrastructure by 2030.

I'm especially interested to hear
how Nick hopes the Mansion House

Compact will impact the UK investing
landscape, having myself been focused

on this subject for the last two
years, as a consultant to the BOOST

project, chaired by Sir Peter Gershon.

BOOST standing for Best Out
of Science and Technology.

Our primary focus was on DB money, where
the Mansion House Compact is focused on

defined contribution side of the equation,
but nonetheless, many of the goals and

potential outputs are very similar.

Nick, thank you for joining me today.

Great pleasure.

Lovely to see you.

And you.

I wanted to go straight into asking you
about the theme that you chose in your

mayoral year, that you've obviously
just finished and understand a little

bit of the thought process of how you
selected growth as your particular focus.

Well, the mayoral theme for the
year was financing our future and

that had various components to it.

One was to do with the need for
us to allocate more investment to

infrastructure in this country.

We've been significantly under
invested in infrastructure for decades.

Another was around the, what I
would describe broadly as the growth

economy, what you've referred to
as sort of science and technology.

The third is, of course, pensions, because
we need to make sure that people have

pensions that are sufficient to help
them through their retirement and we

know that we are very under contributed
for our pension systems and the fourth

area was around financial literacy.

Again, you're thinking about
financing your future, you need

to understand what you're doing.

So those are the sort
of four prongs to it.

It felt to me as if these were the
things which the city of London

could be absolutely central at
finding solutions for, which would

not require the government to
fund through issuing more debt.

So coming back to the growth and the
pensions, clearly the Mansion House

Compact focuses or potentially has
outputs that affect a number of those

in that it can help pension growth
to your point of funding people's

pensions and their retirement, but
it also can make a lot more of that

capital, which is vast, productive
for the goals of the country itself.

I'm intrigued that in your answer,
you made a point of saying where the

government doesn't have to fund it,
because in conversations I've had,

I've been struck by how much the
government sees a lot of this as a

private sector problem, where many other
governments appear to see it as a problem

that they are integral to solving.

Where do you see the current government's
involvement on that spectrum?

And from your perspective,
is it where it should be?

Well, there's a lot to unpack in that
question, but I'm a great believer

in the private sector getting on its
front foot and taking the initiative.

We've got government debt in this country
at roughly a hundred percent of GDP and

we've got the tax take approaching thirty
seven and a half percent of GDP, the

highest level it's been for seventy years.

So, on that basis, there is not a
lot of scope for the government to

sort of pull on the normal levers
of borrowing and spending, or taxing

and spending and therefore, you
know, you have to then say, well how

do we get growth into the economy?

How do we stimulate investment
if we're not going to be able

to rely on the government
borrowing and, priming the pump.

So for me, of course, you know, the
natural place to think about is pensions.

We've got in a rather complicated,
overly complicated pension structure

that's still in transition, we've
got about five trillion pounds.

You know, that's twice the
amount of government borrowings

that we've got in this country.

So, you know, when you look at the pension
system, you would say, you know, let's

make sure that we are investing that
primarily in a way that will deliver

the best returns for savers and when
you start looking at that and you look

around the world and say, well, what
are the systems that are delivering

the best returns for pension savers?

You will gravitate quite quickly to Canada
and to Australia and when you look at the,

what those pension systems are invested
in, one is a DB, predominantly a DB

system, one is predominantly a DC system.

They both invest a lot
in unlisted assets, i.e.

assets that don't have a
disclosable market price that

you can look at every day.

So they're invested in, there are four
real asset classes that fit into that.

One is infrastructure, secondly
real estate, private credit, private

equity and unlisted equities and
so for me, it's really important

that we have a proper conversation
about how our pensions are invested.

There are two things that can deliver
the sort of pensions that we need and

when I'm talking about the pensions that
we need, I'm talking about the sort of

customers that Phoenix looks after.

We've got 12 million customers, but
the average pension pot is about

£30,000, you know, it's woefully
inadequate for what they're going to

need in, you know, 30, 40 years time.

So there are two things
that have to happen.

One is you need to encourage people to
put more money, make larger contributions

into their pensions in the first place,
both employees and then you want to make

sure that you're going to be driving
the best possible returns and for me,

one of the really exciting areas about
the UK is our science and technology.

We've got four of the best 10 universities
in the world, seven of the best 20

universities in the world, as an example.

We've got lots of Fin Tech startups,
we've got more unicorns than

France and Germany put together.

So, we've got great talent, we've
got great businesses, but there

is actually a shortage of capital
that's going into those businesses.

So there's certainly a shortage of UK
capital that's going to those businesses.

Yeah and it's an interesting point about
how well positioned we are, to the point

of where we find ourselves in terms of
tax take, debt and conversations I've

already had recording for the podcast,
it does seem to me that there's been

perhaps a path that we've trodden,
where we've dampened our own outcomes.

So for instance, sort of the regulation
within pension reform has led to a place

where people took it so literally that
we haven't had very productive outputs

and you've alluded to the structural
constraints too, which are real.

But to a question around that, how do you
see the Mansion House Compact outcomes and

the money it will produce being invested?

Yeah, well I think that's an important
question because this is not simply a

question of finding the capital and then
everything sort of falls into place.

I think there are three particular
areas that we have to be very thoughtful

of and we need to tackle all three.

So one is not just having that capital
pledged, which hopefully 5 percent of

money that sits in the DC system and
we've got 550 billion in the DC system

right now, it'll be a trillion by
2030, just from contributions alone, if

there's decent performance it could be 1.

3 trillion.

So 5 percent by 2030 is sort
of 50 to 60 billion pounds.

But if it was 50 to 60 billion
pounds in lots of little 250

million pound funds, we would be not
really changing the dial on this.

You have to look across the world,
where are the most successful

creators of investment capital
in early stage companies?

It's definitely the United States, West
Coast United States, you look at it's

Sequoia Capital or Andreessen Horowitz,
Salesforce, you know, these are big

companies with a lot of very skilled
investors who have got a lot of track

record of taking early stage companies
through Series A, Series B, Series

C through to listing or sale and we
lack those skills in scale in the UK.

So for me, of course it's about scale and
that's why the sort of 50 billion, 50 to

60 billion is the right sort of number.

But I would like to see a collective
investment fund that can accumulate

a significant amount of that money so
that it can compete with the Sequoia

Capitals and the Andreessen Horowitz's
of this world who have got sort of 40

to 50 billion dollars of VC money there.

So the scale of what we're trying to do
could put us in that position, but we

don't want to have it with, you know, too
diffuse with lots and lots of little pop.

That ultimately is one of the reasons why
we've got the problem with the pension

system that we have, we've got 27, 000
different pension, DC pension schemes.

That's why I was pushing, throughout my
mayoralty for us to create a collective

investment fund, which I call the
Future Growth Fund and it can be called

anything you like, but I call it the
Future Growth Fund, that's a sort of

shorthand for what I'm talking about
as a collective investment fund, which

hopefully will accumulate fifteen to
twenty billion of that money and will

gather into it therefore, some of the
most skilled venture capitalists that

we have, who can then allocate money.

In many cases, it will be through funds.

This will effectively be a fund of
funds in the first instance, but as

that expertise develops, we'll be doing
sort of direct investment as well and

I think if we can create a fund like
that, we will be able to see lots of

opportunities to co-invest with some
of the other very big international

investors around the world and these
early stage companies and just to be

clear, this is not just about the UK.

If you were talking to the government,
the government, would say, this is

a way to allocate huge amounts of
capital to the UK growth industry.

The industry, the people who signed
the compact are focused on pension

savers returns and with that in mind,
we need the flexibility to be able

to allocate that capital to the best
possible returns and that means there'll

be international diversification,
it's not going to be exclusively UK.

When people ask me, well,
why isn't it just UK?

Well, I say, well, don't worry about that.

I don't want to see us having
to mandate things where it's

a private sector initiative.

I want to make sure that our very
bright asset managers and venture

capitalists can do their job.

But, you know, the most
sophisticated investors in the world.

are taking a big equity stakes
in these VC companies and as you

go through series A, series B,
series C, series D, the percentage

that's provided by international
investors gets larger and larger.

I mean, it's into the 90%.

No, its 87% at megaround plus, I believe.

We've really dropped off
the curve at that point.

So we had dropped off the curve and of
course it's not just therefore about

trying to make sure that we're getting a
piece of the pie for UK pension savers,

which is really the prime motivation
here, it's that if we can create the

capital market in the UK, then these
companies can say, well, we may choose

to move to the US or to some other part
of the world, but we don't have to.

We actually could stay here in the UK,
we'll have access to capital, because if

you've got a future growth fund that's
punching its weight with alongside the

employers and the Andreessen Horowitz's,
et cetera of this world, we are going

to see more international capital coming
into the UK to find those companies.

A case in point is that Andreessen
Horowitz have just set up an office in

London and Mark Andreessen came to see
me in the Mansion House a couple of

months ago with Sriram Krishnan, who is
the partner who's heading up that office

and they said, look this mansion has
compact, this commitment to put 50 billion

to work in the UK, UK and elsewhere,
but primarily it's going to be in the

UK, is a really strong message to us.

We know that we're going to have to
work harder to find the investment

opportunities that we can invest in.

So we're coming over to London,
we want to be part of this

exciting UK and it's terrific!

That's really interesting because I
heard the exact same kind of example

being used but with a slightly different
perspective this morning, funny enough

in a coffee, where somebody was saying
that those GPs used to come and raise

money from family offices often in
London and that now that pool is running

slightly thinner, that they are not
just seeing the competition for ideas,

that they are seeing the opportunity
to be the managers of that money.

So potentially, not mutually exclusive,
but another agenda on that kind of

movement is here is a pool of capital
that's going to be looking for an

experienced VC firm to invest on their
behalf and so I think that I would agree

with you, a large at scale fund, and
you know, as you know, you and I have

discussed this before, would be fabulous
and it solves a lot of the problems that

the UK pension funds have currently.

But I also think there's a huge, both
potential and something that we need to be

very mindful to avoid, and when I say we,
it's the sort of collective pension fund

holders and those that advise them, is
that we don't end up either investing at

all in the best VCs from America, wouldn't
necessarily be a bad outcome for pension

holders, wouldn't necessarily be a great
outcome for the UK, arguably tax breaks

would be a good way to deal with that.

But also that we don't just end up
duplicating fees because my fear

about this is that this extraordinary
opportunity is created and that too many

fees get spent and that the dilution of
that capital, the diluting effect of that

capital means that returns get pushed
down and that in five or ten years people

turn around and say the experiment didn't
work, but a lot of people got rich off it.

No I can see that concern, I look
at it in a different way though.

One of the things that I did as Lord
Mayor was, as I went around the world,

is we have something called the Global
Investment Futures Campaign, where when

you're, in all of these countries around
the world, you talk to the big sovereign

wealth funds, the big asset pension
funds, what have you, Aussie supers,

to get them to put more of their money
into the UK and more of their people

into the UK, because this is about,
you know, the role of the Lord Mayor

is as an ambassador for UK financial
and professional services, but also for

London as a global financial center.

So I'm very much of the view that if we
can continue to make London as strong as

possible as a global financial center,
the whole country will benefit from

that and so for me, having Andreessen
Horowitz come to London is terrific,

having CPBIB here, having CDPQ, I opened
an office for them in Mayfair, they

have 75 people, they're going to grow
that to 250, Aware Super in Australia

just opened their office in November.

You know, when I was over in Australia
back in February, we had a lot of

conversations then, I've been very
much involved in ongoing discussions

with them and you know, they all came
and had a lunch at Mansion House to

celebrate the opening of the office.

This is all great stuff because
you're bringing expertise, you're

bringing capital into London.

These guys are recruiting and they're
recruiting and training, you know,

they're recruiting UK people and training
them and that's good because I want

the Future Growth Fund to be able to
draw in extremely good people who can

really deliver for our pension savers
and make sure that this business is

allocated to the best possible ends.

And I think you make a really good point
there about training the talent and

interestingly, you know, conversations
about the depth of the research side

of the marketplace here and that people
go and listen on the NASDAQ because

they're effectively worried often that
there just isn't the expertise or the

liquidity to support them and so I think
all of what you say really corresponds

and answers some of those justified,
but perhaps not as extreme as people

sometimes cast them to be, fears.

So I'm so supportive of that and I think
that we do need to be mindful that this

money that you have untapped and I'm so
excited about this, you know, I sound

like I'm being a bit negative perhaps,
but I think it's excellent, I think it's

going to do brilliant things for the UK,
I think that my natural cynicism just

wants to make sure that it does as good
of things as it can for the UK with as

few hurdles and I spoke to the Wellcome
Trust about a year and a half ago and

they were saying, and they're probably
one of our most evolved venture investors

in the UK and they were saying, It took
us ten years to get a seat at the table

of the best deals where people wanted
us to sit on them and so I suppose what

I'm observing, and you've answered it
in fairness, is that the gap between

setting something up afresh and it having
access to the best deals because of the

signaling power is just there to be noted.

Yeah, but you know, what I would say is
that, although this is, and the Future

Growth Fund that I've been talking about
would be a private sector initiative

and you know, conversations with the
government and the suggestions that maybe

the government should get involved or
maybe, as they think about what they do

with British Business Bank and British
Capital within it, the UK Infrastructure

Bank, British Growth Fund, you know,
other ways in which you could combine

these government sponsored or underwritten
or guaranteed entities to again create

scale and, you know, could we potentially
crowd in private capital behind it?

My personal view is no, you can't, I think
you need to keep government sponsored

initiatives and private market initiatives
separate because I don't think the

private market is interested in having
a particular exposure to a fund that is

controlled in some way or another by the
government because different governments

can move it in different directions.

However, let's not underestimate the
value that the government can bring in

changing the culture and in convening
meetings and you know, it's really

important that we have, whether it's the
Conservatives or whether it's Labour, we

have a government that is really motivated
to try and build Britain's capabilities,

particularly in the growth economy and
to do that, they need to be engaging

all the time with the private sector.

So I think there is a natural and
symbiotic relationship here between

the government on the one hand and the
private sector on the other, to create

the right environment, whether there's
legislative change that needs to be

looked at, whether there's some fiscal
incentives, whether some regulatory

shift, we've already seen some of that.

I think we're actually in a much,
much stronger position now than we

were eighteen months ago, because we
have better dialogue between private

sector and public sector and a better
alignment of interest and intention

and that I think, is very positive.

So, I completely understand Wellcome
Trust's view that it took them ten years.

I remember I was talking to Joe Taylor
at Ontario Teachers, congratulating

him on delivering a 9.6% compound
annual growth rate for 32 years.

That's unbelievable.

And he said, Nick, he said we
made every mistake in the book.

He said, we'd love to talk to
you about what you're trying to

do, because we can help you avoid
making some of those same mistakes.

Look, I think there are a lot of very,
good organisations around the world who

have a strong desire to see the market
in the UK really succeed because it'll

create great opportunities and you know,
one of the other things that we have

worked hard on is to make sure that we've
got some changes to insurance capital

legislation, Solvency 2, European...

All that really sexy stuff.

That really gets dinner
parties humming that one.

But, you know, the changes that are
being proposed that should come in 2024

should mean that insurance companies
can invest in unlisted asset classes

without punitive capital charges,
sort of listed bonds and things.

What I'd like to see is companies, you
know, having access to plenty of capital.

I mean, the difference that we've always
said in the in between the US and the

UK is that an early stage company over
here goes sort of cap in hand to raise

ten million and sort of scratches around
and get seven or eight, and then they're

back at the door in a year's time.

Whereas in States, they'll
say, well have fifty.

Yeah, what can you do with this?

And accelerate your plans.

We want to see whether or
not you can succeed or not.

Going with that is a different mentality
as well and again this is something

that we often talk about differentiating
the US and the UK, which is if in

the US you fail, you're eminently
investable, because you're deemed to

have learned some very important lessons.

Too often in this country, because
capital has been scarce, if

you fail, you become a pariah.

That's not right, we need to
have the surplus capital going.

Now, to your point, I think the Future
Growth Fund, I would anticipate the

Future Growth Fund would be able to
have massive diversification, this

is really what the key thing here is.

In an asset class that is naturally
a higher risk asset class than listed

equities or listed bonds, you need
to have a lot of diversification.

So you need to have a lot of different
investments, but you also have to have

a different sort of duration investments
or different, if you like, different

timings of series A, series C, series
B and again, for the future growth

fund, I'm not talking about incubator
here, I'm talking about taking it on

from incubator and accelerating it.

But some of these companies will be cash
generative and those that are should be

able to fund themselves with venture debt.

Again, I think it's a very
specific skill, and we need to make

sure that our financial service
providers have those skills.

Regulators will be anxious if they don't,
you know, but it is a skill, there will

be, you know, good returns and obviously
preferential returns over equity holders.

Yeah.

How do you see this money, very
specifically, we've spoken about some of

the mechanisms, but filtering into places
like Oxford, and I suppose flipping it

the other way, in your role as mayor,
what do you see the gaps that are needed

within the kind of university ecosystems?

I don't know whether this statistic is
right, but I think I saw that only sort

of eight or nine percent of capital going
into early stage companies is actually

rooted through the university system.

So it's not exclusively a university
issue, but there's no doubt that the

sort of golden triangle of Oxford,
Cambridge, and London have been

the main recipients of a lot of the
venture capital that has been raised.

As Lord Mayor, I travel
around the country.

I travel extensively internationally.

I did about 75 days internationally, but
I did 25 days around the UK and Ireland.

I was in Dublin, London, Derry, Belfast,
Cardiff, Edinburgh, Glasgow, Sheffield,

Leeds, Manchester, Birmingham, Cambridge,
didn't get to Oxford unfortunately.

But in every one of those cities, I saw
lots of tremendous early stage companies

doing terrific things, all of them baying
for more capital, more attention, more

focus and so I very much see, again,
the benefit of something like the Future

Growth Fund, with the scale that it's
got, of being able to have coverage that

is fully around the UK and one of the
ideas that this government had, whether

or not it will materialise or not, I'm not
quite sure, was to have hubs in different

parts of the country, sort of a biotech
hub or a cyber hub or whatever it might

be, or a space hub so that you encourage
companies with the same sort of interests

to congregate and there is some real
value in that because then you'll get

investors who want an exposure in one of
those particular areas to go there and you

know, meet 50 companies, but you'll also
get expertise in helping those companies

to navigate their way through growth
with the sort of lowest risk profile

and you'll get mentors, you will get
non-executive directors that can sit on

boards and help people with their journey.

Interestingly, we just had a guest, Mark
Preston, who is Formula One, Formula E,

and was talking about the motorsports
cluster in the UK, which I didn't really

understand the scale, but employs 40, 000
people and I think brings in more than 10

billion a year and he was talking about
all of those things you've identified,

but actually an additional one that he
noted and said was especially useful was

when you're wanting to attract just the
fundamental talent to build the business,

that sense that they're not sort of moving
their whole family to a location where

if that doesn't work, if that startup
doesn't work, or if they don't enjoy

that role that they've sort of hemmed
themselves in geographically, is just

not a risk and how important that is if
you want to be able to attract really

great academic commercial talent to an
area and so it makes a lot of sense.

It's a great point and you know, we know
that the, you know, we've got a massive

societal problem in this country about
housing and lack of housing, expensive

housing, but, you know, the most expensive
housing tends to be in the Southeast.

So why on earth aren't we helping to
drive the sort of leveling up agenda and

really, you know, locating real expertise
in green and renewable technology or

clean technology or what have you in
the Northeast or cyber down in Cardiff,

there's a lot of good cyber companies
down there, you know, same with AI.

Again, I think we ought to be able
to do this and we've got, you know,

venture capital investors, mostly
at the seed level, need a Northern

gritstone operating with a number of
the universities in the Northeast.

Pete Davis at Lansdowne has done
a lot in Oxford, but he's also

with other universities too.

There are more of these initiatives going
on and they're much to be encouraged and

those are the areas where I think the
government can play an important role

in creating the, you know, either sort
of tax free zones, whether it's sort

of free ports, you know, as one of the
initiatives that this government had.

I think there are some fiscal
incentives that can be produced to

help encourage people to gather in
certain areas and stay in certain areas.

Yeah and I think that's
exceptionally important.

I mean, I spoke earlier in sort of broad,
not very helpful terms perhaps, but again,

in the conversation with Mark, but also
with others, he was specifically talking

about the costs around Brexit for the
motorsports industry and how obstructive

they are and that there haven't been many
wins seen from that and it does seem that

the government needs to make sure that
both to retain really good clusters but

also to encourage new ones to form that
there are really great incentives and

ways that business can be made more easy
and on another practical note, one has

heard a lot about just getting really
great talent visas and that is something

that can be just hugely time consuming
and one understands some of the reasons

behind that, but when you're talking
about top tier talent for science and

technology companies, it does seem we're
somewhat shooting ourselves in the foot

not to ease that as much as possible.

Yeah, I mean, I think there are schemes
that are in place already where people

can expedite, companies can expedite the
sort of visa process and we are, if you

talk to the government, they will talk
about the fact that they want to make

sure that we don't have barriers to, you
know, the brightest and the best coming.

Bearing in mind, you know, again
looking at from my perspective, from a

sort of a London point of view, London
has always been a trading entrepôt.

It's always had people coming from
all around the world for centuries and

centuries and that sort of pervasive
multicultural frame of mind and from

the financial services point of view,
we always, the investment banks, US

investment banks, British investment
banks, always attracted great, you

know, Europeans, Asians, Americans
always love to come over here as well.

That is a really important ingredient
of what makes the UK so tremendous.

It's because we've got a system of
parliamentary democracy that people trust,

an independent judiciary and a great sort
of legal profession and regulators that

are very well respected around the world.

These are three fundamental platforms
on which international investors base

their investment decisions, and we need
to make sure that we get people here.

Again, it's the breadth and depth of
talent that people talk about when

they, international companies, banks,
insurance companies, asset managers,

talk about London as such an important
place for them, because they can

recruit some of the best talent here.

So we need to make sure that we are
always a marketplace for talent.

So I think that's exactly right, I have
spent a year avoiding saying anything

negative or positive about Brexit
because frankly, you know, it's just not

a lens that is worth looking through.

No, it's true, although it's amazing how,
you know, MiFID II is being repealed and

so, for anyone listening that doesn't
know what that means, that's about how

brokerage costs are bundled up or, in
this case, were unbundled and therefore,

in theory, made more transparent.

But in truth, the net effect appears to
have been that people just paid for less

research and therefore we have fewer
researchers in London and it affects the

perceived and real depth of analytical
research, which obviously then has

ongoing effects that were in fairness,
unforeseen, but if you had listened to

people, they were seen by some people.

So we are now looking, so I don't
particularly want to go into whether

Brexit should or shouldn't happen,
but I think that we need to discuss

it to the extent that there are things
that we can change now that we're

out and we should be looking for some
benefits, but we also should be just

looking at history for the sake of
being able to look forward and say,

you know, was the information correct?

Was it measured in the ways that we
now are looking at it with hindsight?

And how might we improve things?

Yeah, I think I'm not
somebody who, looks back.

I mean, I'm a historian, so I should
do, but I do really, genuinely want

to always try and look forward.

I think you need to look around the
world always and say, where are the good

examples of what we want to accomplish?

Whether it's education in Finland or
pension management in Canada, you know,

whatever these issues are, find the
examples of where it's worked well,

understand them, don't sort of allow
yourself too focused on trying to

justify something or other historically,
but just say what do we need to do?

How can we get there?

Is there a legislative change required?

Is there regulatory change required?

Is there fiscal incentive required?

And what's the best
way to accomplish that?

One thing that does irritate me is when,
you know, we find ourselves in a situation

where something good happens and somebody
says, well that's a benefit of Brexit.

Well it's not actually, it's a direct
result of somebody working incredibly

hard to turn something that potentially
was a problem into a solution.

We can always do that and that's what
the city of London has always done,

we've turned problems into solutions
and it doesn't matter, you know,

whether or not there's a sort of
political kerfuffle or a, you know, an

external issue or a plague or famine
or fire or pestilence, whatever it is.

Over the centuries, the City of London
has always found ways forward and that's

why, for me, it was absolutely central to
try and get the narrative around the city

changed during my mayoralty, so that we
were absolutely part of the discussion,

so that we could use our expertise,
not in an arrogant way, we don't have

all the answers, but we do have some
of the answers, and we absolutely have

organisations that can be mobilised to do
things that are going to be really good

for the economy and that's probably been
the most satisfying thing of the last year

for me was to see these great British and
international companies coming together

and saying, if we put our heads together
on this, we can come up with solutions

and that's really been a competitive
advantage and we must always, when we

think about MiFID or Solvency 2, these
European pieces of legislation, which now

can be unraveled, the motivation should
always be, how do we break down barriers?

How do we make ourselves more competitive?

You know, this is what's really important
because it's a very competitive world

out there and we, you know, we see this
particularly in the listing environment

with all of the challenges that, that
we've got on that one and again, when it

comes to that, that's a really important
part of what we've been talking about

for the last 45 minutes, Susannah.

There's no point in fostering these
early stage companies, in funding

them, in creating the academic support,
the mentoring, the non-executive

directors with experience that can help
guide them, changing the legislation

around research so that we've got
good research analysts that can tell

the story about these companies.

If we don't then have a listed equity
market that can actually take these

companies and give them a really
good birth here and now we do have

that capability, I think a lot of the
criticism that's come out about London

as a listing market is misplaced.

But the fact of it is, there are
a lot of companies who are listing

elsewhere, who could be listing
here, and we want to create that.

If the Mansion House Compact is to
be deemed successful, then in 10

years time, we'll have 3, 4, 5, fifty
billion pound companies in the FTSE

100 that weren't even thought of today.

Whether they're biotech or AI or tech
or fintech, whatever it may be and

that will be the acid test, but we
can only accomplish that if at the

same time as all we're doing around
the VC market is also reflected in

changes around the listed environment.

Yeah and one hears a lot about that and
you know, I know that you've done a lot

of work with Julia Hoggett and her team
and the capital markets industry task

force, focused on not just this side of
it but absolutely that side of it and

I am encouraged by the fact that MiFID
II is going to be unbundled because I

think that's a part of the puzzle but
I think the point you made is very well

put about your role and the convening
power of the City of London and the role

of Lord Mayor because I so often say
the same thing, you know, you are not

often the person that knows, in fact
you're rarely the person that knows

the most about anything in any room.

But if you can be a conduit for
conversations and for sort of assimilating

and diffusing down what other people
who know their own respective areas much

better are saying, the answer is normally
in the room and the City of London, the

answer really is in the room and I think
that you have been hugely successful at

getting all of those people to sit down
in rooms and in tables and focus and

so, for my part I'd like to congratulate
you on a very successful mayoral year.

But for the purposes of this
conversation, is there anything else

you particularly wanted to talk about?

Well, look, I think one of the things that
I felt was very important, which I sort of

kicked off at the beginning of my mayoral
year and actually I had to twist a few

arms to get people to agree to it, I feel
it's really important as you think about

London as a global financial center to
think of it in the same way you would as

a business and I chair a FTSE 100 company
called Phoenix Group and you want to

think about, you know, long term strategy.

So for me and you know, we're seeing
countries like Saudi Arabia with

their Vision 2030, that's what I
feel the City of London needed.

So we actually commissioned some work,
which we did with Oliver Wyman, who were

brilliant actually, and we got eight very
senior city figures to lead four work

streams looking at a variety of areas.

But basically the question we asked was,
What does the City of London need to do

to make sure it is as preeminent in 2030
and beyond as it has been historically?

And as a result of that, over 300
different private sector organisations

were consulted and we came up with
a 50 page report, a vision for

economic growth, which is a living
document, it's got nine big moves.

There are five main areas that we're
focusing on, one is growth, one is

a sort of a digital first, one is
investment, one is green and sustainable

finance and the fifth is connectivity.

Those are the sort of five big buckets
where we need to make sure that we've got

some really good ideas and the purpose of
doing this wasn't just to have something

you know, a report to stick on the shelf.

It was to have a report that came out
in September that could be taken to the

different parliamentary parties at the
party conference season to say, this is

what the private sector feels the City
of London can accomplish and here's

the way that we're going to do it.

Very few things needed significant
government intervention.

Most of it could be done by just sort
of changing the culture, changing the

language, talking about, you know, the
sort of risk aversion that's become

a sort of form of paralysis that's
inhibited our financial services

from doing their job properly.

But what it does is it basically gives
us a strategy to keep Britain where it

belongs in financial and professional
services, and that aligns governments,

regulators, because they've been heavily
consulted in this, private sector.

So that we can say this is the way the
UK is presenting itself, this is what we

think we can accomplish, and this is how
we're going to do it and so, the idea

being that we create a structure which
enables a very regular rhythm of meetings

between the government of whatever hue
and the City of London, chaired by the

Chancellor of the Exchequer of the day,
meeting every quarter with the senior

leaders from financial professional
service to say, here are the priorities

to make sure that we're continuing
to do what we can do to support the

government's growth investment ambitions.

So that I think is an important point just
to add, which is that, you know, you don't

just have sort of a one off mayoralty
where a Lord Mayor goes sort of flying off

in one direction and the next Lord Mayor
goes flying off in another direction.

Consistency of communication.

Yeah so this just sort of sets the
tramlines as to what we're going to

be accomplishing over the next sort
of seven to ten years and there is,

you know, real alignment around this.

So I'm very optimistic, I think
we've got a huge amount to look

forward to in this country.

We've got to be a little bit more
optimistic about what we've got here.

I get very frustrated by, you know,
journalists and politicians who are

endlessly talking this country down.

We have so much that other countries
admire hugely and I suppose my one

takeaway from my year as Lord Mayor,
traveling around the world to so many

different countries is the extraordinarily
high esteem in which this country is

held for its role, the role that it has
always played in geopolitics, in being a

source of wisdom, integrity, good moral
judgment, a great force of good in the

world and gracious me with all of the
challenges that there are around us in

this world today, you know, the UK really
has a need to step up and perform that

role and right at the heart of it is what
the City of London can do and I'm very

proud to have been Lord Mayor, it was
a huge privilege and you know, I think

we've got everything to look forward to.

Well, thank you very much, Nick.

I've really enjoyed
talking to you about it.

Thank you very much indeed.

Thanks for listening to this
episode of Oxford+, presented

by me, Susannah de Jager.

If you want to stay up to date with all
things Oxford+, please visit our website,

OxfordPlus.co.uk and sign up to our
newsletter so you never miss an update.

Oxford+ was made in partnership
with Mishcon de Reya and is produced

and edited by Story Ninety Four.