1 00:00:07,510 --> 00:00:09,370 Welcome to this episode of Oxford+. 2 00:00:10,130 --> 00:00:11,950 My guest today is Nick Lyons. 3 00:00:12,050 --> 00:00:15,790 Nick started his career in political research in London and then Brussels 4 00:00:15,849 --> 00:00:19,720 before moving into investment banking with a career spanning 21 years. 5 00:00:20,189 --> 00:00:24,559 From his executive roles in banking, he then moved into the non-executive phase 6 00:00:24,559 --> 00:00:29,369 of his career, focusing predominantly on insurance companies, most recently 7 00:00:29,389 --> 00:00:32,930 as chair of the Phoenix Group, the UK's largest pension provider. 8 00:00:33,600 --> 00:00:37,800 Nick took a year out from Phoenix to become Lord Mayor of the City of London, 9 00:00:37,980 --> 00:00:39,650 a role which he has just finished. 10 00:00:40,140 --> 00:00:44,470 Of particular interest to this discussion is his involvement in the Mansion House 11 00:00:44,470 --> 00:00:48,839 Compact which, together with Jeremy Hunt, he promoted during his mayoral year. 12 00:00:49,500 --> 00:00:53,150 The Mansion House Compact committed insurance companies and pension funds 13 00:00:53,150 --> 00:00:57,979 to a framework promising to invest 5 percent of their capital into UK unlisted 14 00:00:57,980 --> 00:01:00,580 companies and infrastructure by 2030. 15 00:01:01,560 --> 00:01:04,569 I'm especially interested to hear how Nick hopes the Mansion House 16 00:01:04,569 --> 00:01:08,909 Compact will impact the UK investing landscape, having myself been focused 17 00:01:08,910 --> 00:01:12,400 on this subject for the last two years, as a consultant to the BOOST 18 00:01:12,410 --> 00:01:14,420 project, chaired by Sir Peter Gershon. 19 00:01:15,000 --> 00:01:18,470 BOOST standing for Best Out of Science and Technology. 20 00:01:19,340 --> 00:01:23,820 Our primary focus was on DB money, where the Mansion House Compact is focused on 21 00:01:23,820 --> 00:01:28,179 defined contribution side of the equation, but nonetheless, many of the goals and 22 00:01:28,180 --> 00:01:30,050 potential outputs are very similar. 23 00:01:30,840 --> 00:01:32,620 Nick, thank you for joining me today. 24 00:01:32,960 --> 00:01:33,590 Great pleasure. 25 00:01:33,650 --> 00:01:34,420 Lovely to see you. 26 00:01:34,560 --> 00:01:35,100 And you. 27 00:01:35,370 --> 00:01:40,449 I wanted to go straight into asking you about the theme that you chose in your 28 00:01:40,559 --> 00:01:45,009 mayoral year, that you've obviously just finished and understand a little 29 00:01:45,009 --> 00:01:48,839 bit of the thought process of how you selected growth as your particular focus. 30 00:01:49,929 --> 00:01:54,329 Well, the mayoral theme for the year was financing our future and 31 00:01:54,399 --> 00:01:56,119 that had various components to it. 32 00:01:56,229 --> 00:02:00,959 One was to do with the need for us to allocate more investment to 33 00:02:01,009 --> 00:02:02,749 infrastructure in this country. 34 00:02:02,749 --> 00:02:06,319 We've been significantly under invested in infrastructure for decades. 35 00:02:06,989 --> 00:02:11,159 Another was around the, what I would describe broadly as the growth 36 00:02:11,169 --> 00:02:13,989 economy, what you've referred to as sort of science and technology. 37 00:02:14,399 --> 00:02:18,689 The third is, of course, pensions, because we need to make sure that people have 38 00:02:18,869 --> 00:02:23,659 pensions that are sufficient to help them through their retirement and we 39 00:02:23,659 --> 00:02:29,619 know that we are very under contributed for our pension systems and the fourth 40 00:02:29,619 --> 00:02:31,819 area was around financial literacy. 41 00:02:32,039 --> 00:02:35,089 Again, you're thinking about financing your future, you need 42 00:02:35,109 --> 00:02:36,429 to understand what you're doing. 43 00:02:36,429 --> 00:02:39,064 So those are the sort of four prongs to it. 44 00:02:39,064 --> 00:02:43,774 It felt to me as if these were the things which the city of London 45 00:02:43,804 --> 00:02:48,974 could be absolutely central at finding solutions for, which would 46 00:02:48,974 --> 00:02:52,994 not require the government to fund through issuing more debt. 47 00:02:53,369 --> 00:02:57,789 So coming back to the growth and the pensions, clearly the Mansion House 48 00:02:57,839 --> 00:03:03,279 Compact focuses or potentially has outputs that affect a number of those 49 00:03:03,299 --> 00:03:06,999 in that it can help pension growth to your point of funding people's 50 00:03:07,429 --> 00:03:11,719 pensions and their retirement, but it also can make a lot more of that 51 00:03:11,719 --> 00:03:17,564 capital, which is vast, productive for the goals of the country itself. 52 00:03:18,014 --> 00:03:21,524 I'm intrigued that in your answer, you made a point of saying where the 53 00:03:21,524 --> 00:03:26,764 government doesn't have to fund it, because in conversations I've had, 54 00:03:27,214 --> 00:03:31,204 I've been struck by how much the government sees a lot of this as a 55 00:03:31,334 --> 00:03:37,214 private sector problem, where many other governments appear to see it as a problem 56 00:03:37,384 --> 00:03:39,404 that they are integral to solving. 57 00:03:40,174 --> 00:03:44,704 Where do you see the current government's involvement on that spectrum? 58 00:03:45,659 --> 00:03:48,599 And from your perspective, is it where it should be? 59 00:03:48,744 --> 00:03:52,944 Well, there's a lot to unpack in that question, but I'm a great believer 60 00:03:53,004 --> 00:03:57,024 in the private sector getting on its front foot and taking the initiative. 61 00:03:57,534 --> 00:04:01,749 We've got government debt in this country at roughly a hundred percent of GDP and 62 00:04:01,749 --> 00:04:06,619 we've got the tax take approaching thirty seven and a half percent of GDP, the 63 00:04:06,619 --> 00:04:09,909 highest level it's been for seventy years. 64 00:04:10,599 --> 00:04:14,609 So, on that basis, there is not a lot of scope for the government to 65 00:04:14,609 --> 00:04:18,529 sort of pull on the normal levers of borrowing and spending, or taxing 66 00:04:18,540 --> 00:04:22,409 and spending and therefore, you know, you have to then say, well how 67 00:04:22,419 --> 00:04:24,679 do we get growth into the economy? 68 00:04:25,119 --> 00:04:28,589 How do we stimulate investment if we're not going to be able 69 00:04:28,589 --> 00:04:32,594 to rely on the government borrowing and, priming the pump. 70 00:04:33,074 --> 00:04:37,724 So for me, of course, you know, the natural place to think about is pensions. 71 00:04:37,724 --> 00:04:42,554 We've got in a rather complicated, overly complicated pension structure 72 00:04:42,794 --> 00:04:46,704 that's still in transition, we've got about five trillion pounds. 73 00:04:47,059 --> 00:04:49,669 You know, that's twice the amount of government borrowings 74 00:04:49,729 --> 00:04:51,089 that we've got in this country. 75 00:04:51,679 --> 00:04:55,969 So, you know, when you look at the pension system, you would say, you know, let's 76 00:04:56,009 --> 00:05:00,529 make sure that we are investing that primarily in a way that will deliver 77 00:05:00,949 --> 00:05:04,879 the best returns for savers and when you start looking at that and you look 78 00:05:04,879 --> 00:05:07,429 around the world and say, well, what are the systems that are delivering 79 00:05:07,429 --> 00:05:09,239 the best returns for pension savers? 80 00:05:09,899 --> 00:05:14,564 You will gravitate quite quickly to Canada and to Australia and when you look at the, 81 00:05:14,984 --> 00:05:19,704 what those pension systems are invested in, one is a DB, predominantly a DB 82 00:05:19,704 --> 00:05:21,794 system, one is predominantly a DC system. 83 00:05:22,524 --> 00:05:25,934 They both invest a lot in unlisted assets, i.e. 84 00:05:25,984 --> 00:05:29,664 assets that don't have a disclosable market price that 85 00:05:29,674 --> 00:05:30,765 you can look at every day. 86 00:05:31,459 --> 00:05:34,749 So they're invested in, there are four real asset classes that fit into that. 87 00:05:34,759 --> 00:05:39,299 One is infrastructure, secondly real estate, private credit, private 88 00:05:39,299 --> 00:05:46,509 equity and unlisted equities and so for me, it's really important 89 00:05:46,509 --> 00:05:51,359 that we have a proper conversation about how our pensions are invested. 90 00:05:52,369 --> 00:05:56,429 There are two things that can deliver the sort of pensions that we need and 91 00:05:56,479 --> 00:06:00,259 when I'm talking about the pensions that we need, I'm talking about the sort of 92 00:06:00,464 --> 00:06:03,624 customers that Phoenix looks after. 93 00:06:03,624 --> 00:06:07,474 We've got 12 million customers, but the average pension pot is about 94 00:06:07,474 --> 00:06:11,524 £30,000, you know, it's woefully inadequate for what they're going to 95 00:06:11,524 --> 00:06:14,384 need in, you know, 30, 40 years time. 96 00:06:14,934 --> 00:06:16,534 So there are two things that have to happen. 97 00:06:16,534 --> 00:06:20,644 One is you need to encourage people to put more money, make larger contributions 98 00:06:20,644 --> 00:06:25,569 into their pensions in the first place, both employees and then you want to make 99 00:06:25,569 --> 00:06:30,149 sure that you're going to be driving the best possible returns and for me, 100 00:06:30,659 --> 00:06:35,259 one of the really exciting areas about the UK is our science and technology. 101 00:06:35,289 --> 00:06:39,069 We've got four of the best 10 universities in the world, seven of the best 20 102 00:06:39,079 --> 00:06:40,989 universities in the world, as an example. 103 00:06:40,999 --> 00:06:45,209 We've got lots of Fin Tech startups, we've got more unicorns than 104 00:06:45,219 --> 00:06:46,729 France and Germany put together. 105 00:06:47,359 --> 00:06:52,259 So, we've got great talent, we've got great businesses, but there 106 00:06:52,259 --> 00:06:55,449 is actually a shortage of capital that's going into those businesses. 107 00:06:55,459 --> 00:06:58,299 So there's certainly a shortage of UK capital that's going to those businesses. 108 00:06:58,409 --> 00:07:04,969 Yeah and it's an interesting point about how well positioned we are, to the point 109 00:07:04,969 --> 00:07:09,809 of where we find ourselves in terms of tax take, debt and conversations I've 110 00:07:09,809 --> 00:07:14,709 already had recording for the podcast, it does seem to me that there's been 111 00:07:15,194 --> 00:07:20,534 perhaps a path that we've trodden, where we've dampened our own outcomes. 112 00:07:21,004 --> 00:07:26,734 So for instance, sort of the regulation within pension reform has led to a place 113 00:07:26,734 --> 00:07:31,344 where people took it so literally that we haven't had very productive outputs 114 00:07:31,344 --> 00:07:35,574 and you've alluded to the structural constraints too, which are real. 115 00:07:35,634 --> 00:07:42,914 But to a question around that, how do you see the Mansion House Compact outcomes and 116 00:07:43,044 --> 00:07:46,474 the money it will produce being invested? 117 00:07:46,759 --> 00:07:50,919 Yeah, well I think that's an important question because this is not simply a 118 00:07:50,919 --> 00:07:55,699 question of finding the capital and then everything sort of falls into place. 119 00:07:56,049 --> 00:08:00,319 I think there are three particular areas that we have to be very thoughtful 120 00:08:00,319 --> 00:08:02,559 of and we need to tackle all three. 121 00:08:02,909 --> 00:08:09,314 So one is not just having that capital pledged, which hopefully 5 percent of 122 00:08:09,354 --> 00:08:14,694 money that sits in the DC system and we've got 550 billion in the DC system 123 00:08:14,694 --> 00:08:19,464 right now, it'll be a trillion by 2030, just from contributions alone, if 124 00:08:19,464 --> 00:08:20,785 there's decent performance it could be 1. 125 00:08:20,785 --> 00:08:21,674 3 trillion. 126 00:08:22,214 --> 00:08:26,654 So 5 percent by 2030 is sort of 50 to 60 billion pounds. 127 00:08:26,734 --> 00:08:30,524 But if it was 50 to 60 billion pounds in lots of little 250 128 00:08:31,474 --> 00:08:38,054 million pound funds, we would be not really changing the dial on this. 129 00:08:38,574 --> 00:08:41,984 You have to look across the world, where are the most successful 130 00:08:42,374 --> 00:08:46,864 creators of investment capital in early stage companies? 131 00:08:47,304 --> 00:08:52,089 It's definitely the United States, West Coast United States, you look at it's 132 00:08:52,089 --> 00:08:56,029 Sequoia Capital or Andreessen Horowitz, Salesforce, you know, these are big 133 00:08:56,059 --> 00:09:00,219 companies with a lot of very skilled investors who have got a lot of track 134 00:09:00,219 --> 00:09:04,599 record of taking early stage companies through Series A, Series B, Series 135 00:09:04,819 --> 00:09:10,859 C through to listing or sale and we lack those skills in scale in the UK. 136 00:09:11,429 --> 00:09:16,739 So for me, of course it's about scale and that's why the sort of 50 billion, 50 to 137 00:09:16,739 --> 00:09:18,789 60 billion is the right sort of number. 138 00:09:19,739 --> 00:09:25,009 But I would like to see a collective investment fund that can accumulate 139 00:09:25,049 --> 00:09:29,919 a significant amount of that money so that it can compete with the Sequoia 140 00:09:29,919 --> 00:09:34,269 Capitals and the Andreessen Horowitz's of this world who have got sort of 40 141 00:09:34,269 --> 00:09:38,079 to 50 billion dollars of VC money there. 142 00:09:38,939 --> 00:09:42,669 So the scale of what we're trying to do could put us in that position, but we 143 00:09:42,669 --> 00:09:47,564 don't want to have it with, you know, too diffuse with lots and lots of little pop. 144 00:09:48,014 --> 00:09:50,864 That ultimately is one of the reasons why we've got the problem with the pension 145 00:09:50,864 --> 00:09:55,434 system that we have, we've got 27, 000 different pension, DC pension schemes. 146 00:09:56,024 --> 00:10:00,524 That's why I was pushing, throughout my mayoralty for us to create a collective 147 00:10:00,524 --> 00:10:04,689 investment fund, which I call the Future Growth Fund and it can be called 148 00:10:04,689 --> 00:10:07,269 anything you like, but I call it the Future Growth Fund, that's a sort of 149 00:10:07,269 --> 00:10:11,159 shorthand for what I'm talking about as a collective investment fund, which 150 00:10:11,169 --> 00:10:15,649 hopefully will accumulate fifteen to twenty billion of that money and will 151 00:10:15,659 --> 00:10:20,239 gather into it therefore, some of the most skilled venture capitalists that 152 00:10:20,239 --> 00:10:23,419 we have, who can then allocate money. 153 00:10:23,864 --> 00:10:26,104 In many cases, it will be through funds. 154 00:10:26,104 --> 00:10:29,384 This will effectively be a fund of funds in the first instance, but as 155 00:10:29,384 --> 00:10:35,024 that expertise develops, we'll be doing sort of direct investment as well and 156 00:10:35,034 --> 00:10:40,184 I think if we can create a fund like that, we will be able to see lots of 157 00:10:40,184 --> 00:10:43,754 opportunities to co-invest with some of the other very big international 158 00:10:43,754 --> 00:10:48,504 investors around the world and these early stage companies and just to be 159 00:10:48,504 --> 00:10:52,184 clear, this is not just about the UK. 160 00:10:52,584 --> 00:10:57,114 If you were talking to the government, the government, would say, this is 161 00:10:57,114 --> 00:11:01,444 a way to allocate huge amounts of capital to the UK growth industry. 162 00:11:02,434 --> 00:11:06,744 The industry, the people who signed the compact are focused on pension 163 00:11:06,744 --> 00:11:11,389 savers returns and with that in mind, we need the flexibility to be able 164 00:11:11,389 --> 00:11:16,299 to allocate that capital to the best possible returns and that means there'll 165 00:11:16,309 --> 00:11:19,719 be international diversification, it's not going to be exclusively UK. 166 00:11:20,319 --> 00:11:23,419 When people ask me, well, why isn't it just UK? 167 00:11:23,829 --> 00:11:26,439 Well, I say, well, don't worry about that. 168 00:11:26,439 --> 00:11:30,129 I don't want to see us having to mandate things where it's 169 00:11:30,179 --> 00:11:31,579 a private sector initiative. 170 00:11:31,579 --> 00:11:35,129 I want to make sure that our very bright asset managers and venture 171 00:11:35,129 --> 00:11:36,939 capitalists can do their job. 172 00:11:37,939 --> 00:11:41,069 But, you know, the most sophisticated investors in the world. 173 00:11:41,289 --> 00:11:45,699 are taking a big equity stakes in these VC companies and as you 174 00:11:45,699 --> 00:11:49,899 go through series A, series B, series C, series D, the percentage 175 00:11:49,899 --> 00:11:53,389 that's provided by international investors gets larger and larger. 176 00:11:53,389 --> 00:11:54,069 I mean, it's into the 90%. 177 00:11:54,069 --> 00:11:57,499 No, its 87% at megaround plus, I believe. 178 00:11:57,499 --> 00:11:59,384 We've really dropped off the curve at that point. 179 00:11:59,504 --> 00:12:04,209 So we had dropped off the curve and of course it's not just therefore about 180 00:12:04,539 --> 00:12:08,539 trying to make sure that we're getting a piece of the pie for UK pension savers, 181 00:12:08,539 --> 00:12:12,959 which is really the prime motivation here, it's that if we can create the 182 00:12:12,959 --> 00:12:18,929 capital market in the UK, then these companies can say, well, we may choose 183 00:12:18,949 --> 00:12:24,769 to move to the US or to some other part of the world, but we don't have to. 184 00:12:25,469 --> 00:12:30,539 We actually could stay here in the UK, we'll have access to capital, because if 185 00:12:30,539 --> 00:12:34,519 you've got a future growth fund that's punching its weight with alongside the 186 00:12:34,520 --> 00:12:39,144 employers and the Andreessen Horowitz's, et cetera of this world, we are going 187 00:12:39,144 --> 00:12:43,804 to see more international capital coming into the UK to find those companies. 188 00:12:44,404 --> 00:12:49,424 A case in point is that Andreessen Horowitz have just set up an office in 189 00:12:49,424 --> 00:12:53,974 London and Mark Andreessen came to see me in the Mansion House a couple of 190 00:12:53,974 --> 00:12:58,914 months ago with Sriram Krishnan, who is the partner who's heading up that office 191 00:12:59,624 --> 00:13:04,844 and they said, look this mansion has compact, this commitment to put 50 billion 192 00:13:04,864 --> 00:13:09,924 to work in the UK, UK and elsewhere, but primarily it's going to be in the 193 00:13:09,924 --> 00:13:13,274 UK, is a really strong message to us. 194 00:13:13,354 --> 00:13:17,304 We know that we're going to have to work harder to find the investment 195 00:13:17,304 --> 00:13:18,994 opportunities that we can invest in. 196 00:13:18,994 --> 00:13:22,584 So we're coming over to London, we want to be part of this 197 00:13:22,654 --> 00:13:25,619 exciting UK and it's terrific! 198 00:13:25,619 --> 00:13:29,489 That's really interesting because I heard the exact same kind of example 199 00:13:29,499 --> 00:13:32,859 being used but with a slightly different perspective this morning, funny enough 200 00:13:32,859 --> 00:13:37,749 in a coffee, where somebody was saying that those GPs used to come and raise 201 00:13:37,749 --> 00:13:41,769 money from family offices often in London and that now that pool is running 202 00:13:41,769 --> 00:13:46,559 slightly thinner, that they are not just seeing the competition for ideas, 203 00:13:46,829 --> 00:13:50,309 that they are seeing the opportunity to be the managers of that money. 204 00:13:50,589 --> 00:13:56,884 So potentially, not mutually exclusive, but another agenda on that kind of 205 00:13:56,984 --> 00:14:00,904 movement is here is a pool of capital that's going to be looking for an 206 00:14:00,904 --> 00:14:07,574 experienced VC firm to invest on their behalf and so I think that I would agree 207 00:14:07,574 --> 00:14:12,604 with you, a large at scale fund, and you know, as you know, you and I have 208 00:14:12,604 --> 00:14:16,594 discussed this before, would be fabulous and it solves a lot of the problems that 209 00:14:16,604 --> 00:14:19,484 the UK pension funds have currently. 210 00:14:20,034 --> 00:14:26,514 But I also think there's a huge, both potential and something that we need to be 211 00:14:26,514 --> 00:14:31,924 very mindful to avoid, and when I say we, it's the sort of collective pension fund 212 00:14:31,934 --> 00:14:39,434 holders and those that advise them, is that we don't end up either investing at 213 00:14:39,434 --> 00:14:44,264 all in the best VCs from America, wouldn't necessarily be a bad outcome for pension 214 00:14:44,264 --> 00:14:50,794 holders, wouldn't necessarily be a great outcome for the UK, arguably tax breaks 215 00:14:50,794 --> 00:14:52,604 would be a good way to deal with that. 216 00:14:53,024 --> 00:14:58,464 But also that we don't just end up duplicating fees because my fear 217 00:14:59,144 --> 00:15:04,514 about this is that this extraordinary opportunity is created and that too many 218 00:15:04,514 --> 00:15:10,244 fees get spent and that the dilution of that capital, the diluting effect of that 219 00:15:10,244 --> 00:15:14,374 capital means that returns get pushed down and that in five or ten years people 220 00:15:14,374 --> 00:15:18,074 turn around and say the experiment didn't work, but a lot of people got rich off it. 221 00:15:18,204 --> 00:15:21,894 No I can see that concern, I look at it in a different way though. 222 00:15:22,494 --> 00:15:26,144 One of the things that I did as Lord Mayor was, as I went around the world, 223 00:15:26,144 --> 00:15:30,244 is we have something called the Global Investment Futures Campaign, where when 224 00:15:30,244 --> 00:15:33,794 you're, in all of these countries around the world, you talk to the big sovereign 225 00:15:33,794 --> 00:15:38,604 wealth funds, the big asset pension funds, what have you, Aussie supers, 226 00:15:39,344 --> 00:15:43,314 to get them to put more of their money into the UK and more of their people 227 00:15:43,314 --> 00:15:47,424 into the UK, because this is about, you know, the role of the Lord Mayor 228 00:15:47,424 --> 00:15:51,224 is as an ambassador for UK financial and professional services, but also for 229 00:15:51,224 --> 00:15:52,954 London as a global financial center. 230 00:15:53,924 --> 00:15:58,764 So I'm very much of the view that if we can continue to make London as strong as 231 00:15:58,764 --> 00:16:03,474 possible as a global financial center, the whole country will benefit from 232 00:16:03,474 --> 00:16:09,514 that and so for me, having Andreessen Horowitz come to London is terrific, 233 00:16:09,554 --> 00:16:15,669 having CPBIB here, having CDPQ, I opened an office for them in Mayfair, they 234 00:16:15,669 --> 00:16:20,129 have 75 people, they're going to grow that to 250, Aware Super in Australia 235 00:16:20,439 --> 00:16:23,049 just opened their office in November. 236 00:16:23,509 --> 00:16:28,359 You know, when I was over in Australia back in February, we had a lot of 237 00:16:28,409 --> 00:16:32,174 conversations then, I've been very much involved in ongoing discussions 238 00:16:32,174 --> 00:16:35,724 with them and you know, they all came and had a lunch at Mansion House to 239 00:16:35,724 --> 00:16:36,884 celebrate the opening of the office. 240 00:16:36,884 --> 00:16:41,144 This is all great stuff because you're bringing expertise, you're 241 00:16:41,144 --> 00:16:43,444 bringing capital into London. 242 00:16:43,894 --> 00:16:49,429 These guys are recruiting and they're recruiting and training, you know, 243 00:16:49,429 --> 00:16:54,039 they're recruiting UK people and training them and that's good because I want 244 00:16:54,039 --> 00:16:59,479 the Future Growth Fund to be able to draw in extremely good people who can 245 00:16:59,479 --> 00:17:03,479 really deliver for our pension savers and make sure that this business is 246 00:17:03,479 --> 00:17:05,859 allocated to the best possible ends. 247 00:17:05,879 --> 00:17:08,679 And I think you make a really good point there about training the talent and 248 00:17:08,689 --> 00:17:13,689 interestingly, you know, conversations about the depth of the research side 249 00:17:13,689 --> 00:17:17,139 of the marketplace here and that people go and listen on the NASDAQ because 250 00:17:17,139 --> 00:17:21,239 they're effectively worried often that there just isn't the expertise or the 251 00:17:21,239 --> 00:17:26,189 liquidity to support them and so I think all of what you say really corresponds 252 00:17:26,189 --> 00:17:30,809 and answers some of those justified, but perhaps not as extreme as people 253 00:17:30,829 --> 00:17:32,709 sometimes cast them to be, fears. 254 00:17:32,979 --> 00:17:39,139 So I'm so supportive of that and I think that we do need to be mindful that this 255 00:17:39,139 --> 00:17:43,489 money that you have untapped and I'm so excited about this, you know, I sound 256 00:17:43,529 --> 00:17:47,229 like I'm being a bit negative perhaps, but I think it's excellent, I think it's 257 00:17:47,229 --> 00:17:52,014 going to do brilliant things for the UK, I think that my natural cynicism just 258 00:17:52,104 --> 00:17:56,304 wants to make sure that it does as good of things as it can for the UK with as 259 00:17:56,314 --> 00:18:02,094 few hurdles and I spoke to the Wellcome Trust about a year and a half ago and 260 00:18:02,094 --> 00:18:06,104 they were saying, and they're probably one of our most evolved venture investors 261 00:18:06,124 --> 00:18:10,904 in the UK and they were saying, It took us ten years to get a seat at the table 262 00:18:10,914 --> 00:18:15,414 of the best deals where people wanted us to sit on them and so I suppose what 263 00:18:15,414 --> 00:18:19,334 I'm observing, and you've answered it in fairness, is that the gap between 264 00:18:19,334 --> 00:18:24,524 setting something up afresh and it having access to the best deals because of the 265 00:18:24,524 --> 00:18:28,164 signaling power is just there to be noted. 266 00:18:28,169 --> 00:18:32,999 Yeah, but you know, what I would say is that, although this is, and the Future 267 00:18:32,999 --> 00:18:36,479 Growth Fund that I've been talking about would be a private sector initiative 268 00:18:36,479 --> 00:18:42,309 and you know, conversations with the government and the suggestions that maybe 269 00:18:42,309 --> 00:18:46,619 the government should get involved or maybe, as they think about what they do 270 00:18:46,619 --> 00:18:51,049 with British Business Bank and British Capital within it, the UK Infrastructure 271 00:18:51,049 --> 00:18:55,309 Bank, British Growth Fund, you know, other ways in which you could combine 272 00:18:55,309 --> 00:19:02,809 these government sponsored or underwritten or guaranteed entities to again create 273 00:19:02,829 --> 00:19:08,839 scale and, you know, could we potentially crowd in private capital behind it? 274 00:19:09,169 --> 00:19:13,579 My personal view is no, you can't, I think you need to keep government sponsored 275 00:19:13,689 --> 00:19:18,979 initiatives and private market initiatives separate because I don't think the 276 00:19:18,979 --> 00:19:23,999 private market is interested in having a particular exposure to a fund that is 277 00:19:23,999 --> 00:19:27,199 controlled in some way or another by the government because different governments 278 00:19:27,199 --> 00:19:28,739 can move it in different directions. 279 00:19:29,039 --> 00:19:34,949 However, let's not underestimate the value that the government can bring in 280 00:19:34,949 --> 00:19:40,089 changing the culture and in convening meetings and you know, it's really 281 00:19:40,089 --> 00:19:44,869 important that we have, whether it's the Conservatives or whether it's Labour, we 282 00:19:44,869 --> 00:19:50,729 have a government that is really motivated to try and build Britain's capabilities, 283 00:19:50,749 --> 00:19:55,269 particularly in the growth economy and to do that, they need to be engaging 284 00:19:55,269 --> 00:19:56,689 all the time with the private sector. 285 00:19:56,689 --> 00:20:01,899 So I think there is a natural and symbiotic relationship here between 286 00:20:01,919 --> 00:20:05,929 the government on the one hand and the private sector on the other, to create 287 00:20:05,939 --> 00:20:08,799 the right environment, whether there's legislative change that needs to be 288 00:20:08,799 --> 00:20:12,529 looked at, whether there's some fiscal incentives, whether some regulatory 289 00:20:12,529 --> 00:20:14,249 shift, we've already seen some of that. 290 00:20:14,709 --> 00:20:18,199 I think we're actually in a much, much stronger position now than we 291 00:20:18,199 --> 00:20:23,609 were eighteen months ago, because we have better dialogue between private 292 00:20:23,609 --> 00:20:28,549 sector and public sector and a better alignment of interest and intention 293 00:20:29,069 --> 00:20:30,589 and that I think, is very positive. 294 00:20:30,589 --> 00:20:35,019 So, I completely understand Wellcome Trust's view that it took them ten years. 295 00:20:35,019 --> 00:20:39,569 I remember I was talking to Joe Taylor at Ontario Teachers, congratulating 296 00:20:39,569 --> 00:20:44,294 him on delivering a 9.6% compound annual growth rate for 32 years. 297 00:20:44,484 --> 00:20:45,394 That's unbelievable. 298 00:20:45,924 --> 00:20:49,534 And he said, Nick, he said we made every mistake in the book. 299 00:20:50,034 --> 00:20:52,554 He said, we'd love to talk to you about what you're trying to 300 00:20:52,554 --> 00:20:56,434 do, because we can help you avoid making some of those same mistakes. 301 00:20:56,434 --> 00:21:01,314 Look, I think there are a lot of very, good organisations around the world who 302 00:21:01,314 --> 00:21:08,834 have a strong desire to see the market in the UK really succeed because it'll 303 00:21:08,834 --> 00:21:13,384 create great opportunities and you know, one of the other things that we have 304 00:21:13,404 --> 00:21:18,254 worked hard on is to make sure that we've got some changes to insurance capital 305 00:21:18,254 --> 00:21:20,484 legislation, Solvency 2, European... 306 00:21:20,554 --> 00:21:21,974 All that really sexy stuff. 307 00:21:21,974 --> 00:21:24,724 That really gets dinner parties humming that one. 308 00:21:25,274 --> 00:21:28,414 But, you know, the changes that are being proposed that should come in 2024 309 00:21:29,574 --> 00:21:33,954 should mean that insurance companies can invest in unlisted asset classes 310 00:21:33,964 --> 00:21:39,909 without punitive capital charges, sort of listed bonds and things. 311 00:21:40,439 --> 00:21:45,169 What I'd like to see is companies, you know, having access to plenty of capital. 312 00:21:45,169 --> 00:21:47,629 I mean, the difference that we've always said in the in between the US and the 313 00:21:47,629 --> 00:21:52,079 UK is that an early stage company over here goes sort of cap in hand to raise 314 00:21:52,079 --> 00:21:56,349 ten million and sort of scratches around and get seven or eight, and then they're 315 00:21:56,359 --> 00:21:58,019 back at the door in a year's time. 316 00:21:58,029 --> 00:22:00,569 Whereas in States, they'll say, well have fifty. 317 00:22:00,599 --> 00:22:01,899 Yeah, what can you do with this? 318 00:22:01,939 --> 00:22:03,304 And accelerate your plans. 319 00:22:03,304 --> 00:22:05,254 We want to see whether or not you can succeed or not. 320 00:22:05,904 --> 00:22:09,724 Going with that is a different mentality as well and again this is something 321 00:22:09,724 --> 00:22:14,034 that we often talk about differentiating the US and the UK, which is if in 322 00:22:14,034 --> 00:22:19,034 the US you fail, you're eminently investable, because you're deemed to 323 00:22:19,034 --> 00:22:20,804 have learned some very important lessons. 324 00:22:21,414 --> 00:22:25,484 Too often in this country, because capital has been scarce, if 325 00:22:25,484 --> 00:22:27,244 you fail, you become a pariah. 326 00:22:27,914 --> 00:22:30,524 That's not right, we need to have the surplus capital going. 327 00:22:30,724 --> 00:22:34,554 Now, to your point, I think the Future Growth Fund, I would anticipate the 328 00:22:34,554 --> 00:22:39,404 Future Growth Fund would be able to have massive diversification, this 329 00:22:39,414 --> 00:22:41,134 is really what the key thing here is. 330 00:22:41,444 --> 00:22:46,144 In an asset class that is naturally a higher risk asset class than listed 331 00:22:46,144 --> 00:22:50,764 equities or listed bonds, you need to have a lot of diversification. 332 00:22:50,764 --> 00:22:54,654 So you need to have a lot of different investments, but you also have to have 333 00:22:54,764 --> 00:22:58,214 a different sort of duration investments or different, if you like, different 334 00:22:58,224 --> 00:23:02,409 timings of series A, series C, series B and again, for the future growth 335 00:23:02,409 --> 00:23:06,989 fund, I'm not talking about incubator here, I'm talking about taking it on 336 00:23:06,989 --> 00:23:08,779 from incubator and accelerating it. 337 00:23:09,319 --> 00:23:13,399 But some of these companies will be cash generative and those that are should be 338 00:23:13,399 --> 00:23:16,239 able to fund themselves with venture debt. 339 00:23:16,650 --> 00:23:21,020 Again, I think it's a very specific skill, and we need to make 340 00:23:21,020 --> 00:23:24,390 sure that our financial service providers have those skills. 341 00:23:24,820 --> 00:23:29,000 Regulators will be anxious if they don't, you know, but it is a skill, there will 342 00:23:29,000 --> 00:23:34,880 be, you know, good returns and obviously preferential returns over equity holders. 343 00:23:35,483 --> 00:23:35,543 Yeah. 344 00:23:35,543 --> 00:23:41,613 How do you see this money, very specifically, we've spoken about some of 345 00:23:41,643 --> 00:23:48,053 the mechanisms, but filtering into places like Oxford, and I suppose flipping it 346 00:23:48,063 --> 00:23:53,263 the other way, in your role as mayor, what do you see the gaps that are needed 347 00:23:53,263 --> 00:23:55,993 within the kind of university ecosystems? 348 00:23:56,833 --> 00:24:01,413 I don't know whether this statistic is right, but I think I saw that only sort 349 00:24:01,413 --> 00:24:07,333 of eight or nine percent of capital going into early stage companies is actually 350 00:24:07,333 --> 00:24:09,463 rooted through the university system. 351 00:24:10,353 --> 00:24:14,983 So it's not exclusively a university issue, but there's no doubt that the 352 00:24:14,983 --> 00:24:19,083 sort of golden triangle of Oxford, Cambridge, and London have been 353 00:24:19,093 --> 00:24:23,828 the main recipients of a lot of the venture capital that has been raised. 354 00:24:24,568 --> 00:24:27,728 As Lord Mayor, I travel around the country. 355 00:24:27,868 --> 00:24:30,278 I travel extensively internationally. 356 00:24:30,468 --> 00:24:35,278 I did about 75 days internationally, but I did 25 days around the UK and Ireland. 357 00:24:35,298 --> 00:24:39,708 I was in Dublin, London, Derry, Belfast, Cardiff, Edinburgh, Glasgow, Sheffield, 358 00:24:39,708 --> 00:24:43,998 Leeds, Manchester, Birmingham, Cambridge, didn't get to Oxford unfortunately. 359 00:24:44,468 --> 00:24:51,828 But in every one of those cities, I saw lots of tremendous early stage companies 360 00:24:51,878 --> 00:24:59,828 doing terrific things, all of them baying for more capital, more attention, more 361 00:24:59,828 --> 00:25:05,873 focus and so I very much see, again, the benefit of something like the Future 362 00:25:05,873 --> 00:25:11,373 Growth Fund, with the scale that it's got, of being able to have coverage that 363 00:25:11,373 --> 00:25:15,573 is fully around the UK and one of the ideas that this government had, whether 364 00:25:15,573 --> 00:25:20,313 or not it will materialise or not, I'm not quite sure, was to have hubs in different 365 00:25:20,323 --> 00:25:25,603 parts of the country, sort of a biotech hub or a cyber hub or whatever it might 366 00:25:25,603 --> 00:25:31,753 be, or a space hub so that you encourage companies with the same sort of interests 367 00:25:32,003 --> 00:25:38,073 to congregate and there is some real value in that because then you'll get 368 00:25:38,093 --> 00:25:43,163 investors who want an exposure in one of those particular areas to go there and you 369 00:25:43,163 --> 00:25:50,233 know, meet 50 companies, but you'll also get expertise in helping those companies 370 00:25:50,313 --> 00:25:55,293 to navigate their way through growth with the sort of lowest risk profile 371 00:25:55,943 --> 00:26:01,273 and you'll get mentors, you will get non-executive directors that can sit on 372 00:26:01,273 --> 00:26:03,113 boards and help people with their journey. 373 00:26:03,233 --> 00:26:08,683 Interestingly, we just had a guest, Mark Preston, who is Formula One, Formula E, 374 00:26:09,003 --> 00:26:13,063 and was talking about the motorsports cluster in the UK, which I didn't really 375 00:26:13,063 --> 00:26:17,133 understand the scale, but employs 40, 000 people and I think brings in more than 10 376 00:26:17,133 --> 00:26:20,853 billion a year and he was talking about all of those things you've identified, 377 00:26:21,113 --> 00:26:27,053 but actually an additional one that he noted and said was especially useful was 378 00:26:27,053 --> 00:26:30,773 when you're wanting to attract just the fundamental talent to build the business, 379 00:26:31,253 --> 00:26:35,193 that sense that they're not sort of moving their whole family to a location where 380 00:26:35,193 --> 00:26:38,253 if that doesn't work, if that startup doesn't work, or if they don't enjoy 381 00:26:38,253 --> 00:26:42,293 that role that they've sort of hemmed themselves in geographically, is just 382 00:26:42,293 --> 00:26:47,293 not a risk and how important that is if you want to be able to attract really 383 00:26:47,293 --> 00:26:52,573 great academic commercial talent to an area and so it makes a lot of sense. 384 00:26:52,573 --> 00:26:57,898 It's a great point and you know, we know that the, you know, we've got a massive 385 00:26:57,898 --> 00:27:02,078 societal problem in this country about housing and lack of housing, expensive 386 00:27:02,078 --> 00:27:06,518 housing, but, you know, the most expensive housing tends to be in the Southeast. 387 00:27:07,798 --> 00:27:13,068 So why on earth aren't we helping to drive the sort of leveling up agenda and 388 00:27:13,118 --> 00:27:18,658 really, you know, locating real expertise in green and renewable technology or 389 00:27:18,728 --> 00:27:23,428 clean technology or what have you in the Northeast or cyber down in Cardiff, 390 00:27:23,448 --> 00:27:26,758 there's a lot of good cyber companies down there, you know, same with AI. 391 00:27:26,998 --> 00:27:32,228 Again, I think we ought to be able to do this and we've got, you know, 392 00:27:32,228 --> 00:27:37,008 venture capital investors, mostly at the seed level, need a Northern 393 00:27:37,008 --> 00:27:41,038 gritstone operating with a number of the universities in the Northeast. 394 00:27:42,098 --> 00:27:47,283 Pete Davis at Lansdowne has done a lot in Oxford, but he's also 395 00:27:47,313 --> 00:27:48,593 with other universities too. 396 00:27:48,813 --> 00:27:53,423 There are more of these initiatives going on and they're much to be encouraged and 397 00:27:53,433 --> 00:27:57,603 those are the areas where I think the government can play an important role 398 00:27:58,033 --> 00:28:02,213 in creating the, you know, either sort of tax free zones, whether it's sort 399 00:28:02,213 --> 00:28:05,763 of free ports, you know, as one of the initiatives that this government had. 400 00:28:06,393 --> 00:28:09,173 I think there are some fiscal incentives that can be produced to 401 00:28:09,183 --> 00:28:14,603 help encourage people to gather in certain areas and stay in certain areas. 402 00:28:14,923 --> 00:28:17,413 Yeah and I think that's exceptionally important. 403 00:28:17,433 --> 00:28:22,573 I mean, I spoke earlier in sort of broad, not very helpful terms perhaps, but again, 404 00:28:22,583 --> 00:28:27,053 in the conversation with Mark, but also with others, he was specifically talking 405 00:28:27,053 --> 00:28:32,633 about the costs around Brexit for the motorsports industry and how obstructive 406 00:28:32,793 --> 00:28:38,553 they are and that there haven't been many wins seen from that and it does seem that 407 00:28:38,563 --> 00:28:43,003 the government needs to make sure that both to retain really good clusters but 408 00:28:43,003 --> 00:28:47,913 also to encourage new ones to form that there are really great incentives and 409 00:28:47,913 --> 00:28:52,453 ways that business can be made more easy and on another practical note, one has 410 00:28:52,453 --> 00:28:57,213 heard a lot about just getting really great talent visas and that is something 411 00:28:57,213 --> 00:29:03,293 that can be just hugely time consuming and one understands some of the reasons 412 00:29:03,293 --> 00:29:06,853 behind that, but when you're talking about top tier talent for science and 413 00:29:06,853 --> 00:29:10,553 technology companies, it does seem we're somewhat shooting ourselves in the foot 414 00:29:10,553 --> 00:29:12,813 not to ease that as much as possible. 415 00:29:12,883 --> 00:29:16,883 Yeah, I mean, I think there are schemes that are in place already where people 416 00:29:16,883 --> 00:29:21,753 can expedite, companies can expedite the sort of visa process and we are, if you 417 00:29:21,753 --> 00:29:25,743 talk to the government, they will talk about the fact that they want to make 418 00:29:25,743 --> 00:29:30,253 sure that we don't have barriers to, you know, the brightest and the best coming. 419 00:29:30,613 --> 00:29:35,093 Bearing in mind, you know, again looking at from my perspective, from a 420 00:29:35,093 --> 00:29:39,893 sort of a London point of view, London has always been a trading entrepôt. 421 00:29:39,913 --> 00:29:44,003 It's always had people coming from all around the world for centuries and 422 00:29:44,003 --> 00:29:50,003 centuries and that sort of pervasive multicultural frame of mind and from 423 00:29:50,013 --> 00:29:53,733 the financial services point of view, we always, the investment banks, US 424 00:29:53,733 --> 00:29:57,273 investment banks, British investment banks, always attracted great, you 425 00:29:57,273 --> 00:30:00,913 know, Europeans, Asians, Americans always love to come over here as well. 426 00:30:01,433 --> 00:30:06,708 That is a really important ingredient of what makes the UK so tremendous. 427 00:30:06,718 --> 00:30:10,238 It's because we've got a system of parliamentary democracy that people trust, 428 00:30:10,578 --> 00:30:15,378 an independent judiciary and a great sort of legal profession and regulators that 429 00:30:15,378 --> 00:30:17,078 are very well respected around the world. 430 00:30:17,088 --> 00:30:22,488 These are three fundamental platforms on which international investors base 431 00:30:22,518 --> 00:30:26,288 their investment decisions, and we need to make sure that we get people here. 432 00:30:26,318 --> 00:30:30,808 Again, it's the breadth and depth of talent that people talk about when 433 00:30:30,808 --> 00:30:35,218 they, international companies, banks, insurance companies, asset managers, 434 00:30:35,218 --> 00:30:39,198 talk about London as such an important place for them, because they can 435 00:30:39,198 --> 00:30:41,028 recruit some of the best talent here. 436 00:30:41,448 --> 00:30:45,328 So we need to make sure that we are always a marketplace for talent. 437 00:30:46,048 --> 00:30:51,923 So I think that's exactly right, I have spent a year avoiding saying anything 438 00:30:51,953 --> 00:30:57,203 negative or positive about Brexit because frankly, you know, it's just not 439 00:30:57,203 --> 00:30:59,503 a lens that is worth looking through. 440 00:30:59,648 --> 00:31:04,278 No, it's true, although it's amazing how, you know, MiFID II is being repealed and 441 00:31:04,278 --> 00:31:07,388 so, for anyone listening that doesn't know what that means, that's about how 442 00:31:07,638 --> 00:31:11,968 brokerage costs are bundled up or, in this case, were unbundled and therefore, 443 00:31:11,988 --> 00:31:13,458 in theory, made more transparent. 444 00:31:13,858 --> 00:31:17,368 But in truth, the net effect appears to have been that people just paid for less 445 00:31:17,368 --> 00:31:21,488 research and therefore we have fewer researchers in London and it affects the 446 00:31:21,538 --> 00:31:26,228 perceived and real depth of analytical research, which obviously then has 447 00:31:26,258 --> 00:31:30,568 ongoing effects that were in fairness, unforeseen, but if you had listened to 448 00:31:30,608 --> 00:31:33,223 people, they were seen by some people. 449 00:31:33,823 --> 00:31:37,063 So we are now looking, so I don't particularly want to go into whether 450 00:31:37,063 --> 00:31:39,913 Brexit should or shouldn't happen, but I think that we need to discuss 451 00:31:39,913 --> 00:31:44,563 it to the extent that there are things that we can change now that we're 452 00:31:44,563 --> 00:31:48,963 out and we should be looking for some benefits, but we also should be just 453 00:31:48,993 --> 00:31:52,103 looking at history for the sake of being able to look forward and say, 454 00:31:52,743 --> 00:31:54,943 you know, was the information correct? 455 00:31:54,963 --> 00:31:59,083 Was it measured in the ways that we now are looking at it with hindsight? 456 00:31:59,153 --> 00:32:01,443 And how might we improve things? 457 00:32:01,543 --> 00:32:04,193 Yeah, I think I'm not somebody who, looks back. 458 00:32:04,273 --> 00:32:08,893 I mean, I'm a historian, so I should do, but I do really, genuinely want 459 00:32:08,893 --> 00:32:10,353 to always try and look forward. 460 00:32:10,833 --> 00:32:14,553 I think you need to look around the world always and say, where are the good 461 00:32:14,553 --> 00:32:16,823 examples of what we want to accomplish? 462 00:32:17,213 --> 00:32:24,463 Whether it's education in Finland or pension management in Canada, you know, 463 00:32:24,493 --> 00:32:28,283 whatever these issues are, find the examples of where it's worked well, 464 00:32:28,313 --> 00:32:34,563 understand them, don't sort of allow yourself too focused on trying to 465 00:32:34,563 --> 00:32:39,223 justify something or other historically, but just say what do we need to do? 466 00:32:39,483 --> 00:32:40,653 How can we get there? 467 00:32:41,203 --> 00:32:42,803 Is there a legislative change required? 468 00:32:42,803 --> 00:32:44,353 Is there regulatory change required? 469 00:32:44,403 --> 00:32:46,403 Is there fiscal incentive required? 470 00:32:46,893 --> 00:32:49,313 And what's the best way to accomplish that? 471 00:32:49,723 --> 00:32:54,923 One thing that does irritate me is when, you know, we find ourselves in a situation 472 00:32:54,923 --> 00:32:59,088 where something good happens and somebody says, well that's a benefit of Brexit. 473 00:32:59,898 --> 00:33:04,978 Well it's not actually, it's a direct result of somebody working incredibly 474 00:33:04,978 --> 00:33:10,168 hard to turn something that potentially was a problem into a solution. 475 00:33:10,498 --> 00:33:13,018 We can always do that and that's what the city of London has always done, 476 00:33:13,068 --> 00:33:16,633 we've turned problems into solutions and it doesn't matter, you know, 477 00:33:16,643 --> 00:33:21,273 whether or not there's a sort of political kerfuffle or a, you know, an 478 00:33:21,273 --> 00:33:27,093 external issue or a plague or famine or fire or pestilence, whatever it is. 479 00:33:27,433 --> 00:33:31,313 Over the centuries, the City of London has always found ways forward and that's 480 00:33:31,313 --> 00:33:37,003 why, for me, it was absolutely central to try and get the narrative around the city 481 00:33:37,003 --> 00:33:41,423 changed during my mayoralty, so that we were absolutely part of the discussion, 482 00:33:41,893 --> 00:33:47,713 so that we could use our expertise, not in an arrogant way, we don't have 483 00:33:47,713 --> 00:33:51,523 all the answers, but we do have some of the answers, and we absolutely have 484 00:33:51,523 --> 00:33:56,758 organisations that can be mobilised to do things that are going to be really good 485 00:33:56,758 --> 00:34:01,948 for the economy and that's probably been the most satisfying thing of the last year 486 00:34:01,948 --> 00:34:07,848 for me was to see these great British and international companies coming together 487 00:34:08,568 --> 00:34:12,058 and saying, if we put our heads together on this, we can come up with solutions 488 00:34:12,798 --> 00:34:16,958 and that's really been a competitive advantage and we must always, when we 489 00:34:16,958 --> 00:34:22,638 think about MiFID or Solvency 2, these European pieces of legislation, which now 490 00:34:22,658 --> 00:34:28,553 can be unraveled, the motivation should always be, how do we break down barriers? 491 00:34:29,143 --> 00:34:31,183 How do we make ourselves more competitive? 492 00:34:31,663 --> 00:34:36,573 You know, this is what's really important because it's a very competitive world 493 00:34:36,573 --> 00:34:40,793 out there and we, you know, we see this particularly in the listing environment 494 00:34:40,803 --> 00:34:44,778 with all of the challenges that, that we've got on that one and again, when it 495 00:34:44,778 --> 00:34:49,188 comes to that, that's a really important part of what we've been talking about 496 00:34:49,198 --> 00:34:50,798 for the last 45 minutes, Susannah. 497 00:34:51,158 --> 00:34:55,568 There's no point in fostering these early stage companies, in funding 498 00:34:55,568 --> 00:35:00,168 them, in creating the academic support, the mentoring, the non-executive 499 00:35:00,188 --> 00:35:04,028 directors with experience that can help guide them, changing the legislation 500 00:35:04,088 --> 00:35:07,758 around research so that we've got good research analysts that can tell 501 00:35:07,758 --> 00:35:09,898 the story about these companies. 502 00:35:10,378 --> 00:35:16,023 If we don't then have a listed equity market that can actually take these 503 00:35:16,023 --> 00:35:22,353 companies and give them a really good birth here and now we do have 504 00:35:22,423 --> 00:35:27,663 that capability, I think a lot of the criticism that's come out about London 505 00:35:27,663 --> 00:35:29,673 as a listing market is misplaced. 506 00:35:30,988 --> 00:35:34,148 But the fact of it is, there are a lot of companies who are listing 507 00:35:34,148 --> 00:35:37,698 elsewhere, who could be listing here, and we want to create that. 508 00:35:38,018 --> 00:35:43,658 If the Mansion House Compact is to be deemed successful, then in 10 509 00:35:43,658 --> 00:35:49,478 years time, we'll have 3, 4, 5, fifty billion pound companies in the FTSE 510 00:35:49,668 --> 00:35:53,378 100 that weren't even thought of today. 511 00:35:53,773 --> 00:35:59,543 Whether they're biotech or AI or tech or fintech, whatever it may be and 512 00:35:59,543 --> 00:36:03,253 that will be the acid test, but we can only accomplish that if at the 513 00:36:03,253 --> 00:36:08,523 same time as all we're doing around the VC market is also reflected in 514 00:36:08,523 --> 00:36:10,633 changes around the listed environment. 515 00:36:10,658 --> 00:36:15,853 Yeah and one hears a lot about that and you know, I know that you've done a lot 516 00:36:15,853 --> 00:36:19,693 of work with Julia Hoggett and her team and the capital markets industry task 517 00:36:19,693 --> 00:36:24,813 force, focused on not just this side of it but absolutely that side of it and 518 00:36:24,993 --> 00:36:28,303 I am encouraged by the fact that MiFID II is going to be unbundled because I 519 00:36:28,333 --> 00:36:33,173 think that's a part of the puzzle but I think the point you made is very well 520 00:36:33,173 --> 00:36:38,033 put about your role and the convening power of the City of London and the role 521 00:36:38,033 --> 00:36:43,258 of Lord Mayor because I so often say the same thing, you know, you are not 522 00:36:43,258 --> 00:36:46,908 often the person that knows, in fact you're rarely the person that knows 523 00:36:46,908 --> 00:36:48,688 the most about anything in any room. 524 00:36:49,138 --> 00:36:55,078 But if you can be a conduit for conversations and for sort of assimilating 525 00:36:55,118 --> 00:36:59,548 and diffusing down what other people who know their own respective areas much 526 00:36:59,568 --> 00:37:04,378 better are saying, the answer is normally in the room and the City of London, the 527 00:37:04,418 --> 00:37:09,888 answer really is in the room and I think that you have been hugely successful at 528 00:37:09,888 --> 00:37:15,808 getting all of those people to sit down in rooms and in tables and focus and 529 00:37:15,808 --> 00:37:20,918 so, for my part I'd like to congratulate you on a very successful mayoral year. 530 00:37:21,448 --> 00:37:25,038 But for the purposes of this conversation, is there anything else 531 00:37:25,078 --> 00:37:28,368 you particularly wanted to talk about? 532 00:37:28,483 --> 00:37:33,143 Well, look, I think one of the things that I felt was very important, which I sort of 533 00:37:33,143 --> 00:37:36,578 kicked off at the beginning of my mayoral year and actually I had to twist a few 534 00:37:36,578 --> 00:37:42,408 arms to get people to agree to it, I feel it's really important as you think about 535 00:37:42,418 --> 00:37:47,488 London as a global financial center to think of it in the same way you would as 536 00:37:47,488 --> 00:37:53,233 a business and I chair a FTSE 100 company called Phoenix Group and you want to 537 00:37:53,263 --> 00:37:55,363 think about, you know, long term strategy. 538 00:37:56,263 --> 00:38:00,643 So for me and you know, we're seeing countries like Saudi Arabia with 539 00:38:00,643 --> 00:38:05,353 their Vision 2030, that's what I feel the City of London needed. 540 00:38:05,353 --> 00:38:09,343 So we actually commissioned some work, which we did with Oliver Wyman, who were 541 00:38:09,393 --> 00:38:15,483 brilliant actually, and we got eight very senior city figures to lead four work 542 00:38:15,483 --> 00:38:19,273 streams looking at a variety of areas. 543 00:38:19,553 --> 00:38:24,728 But basically the question we asked was, What does the City of London need to do 544 00:38:25,118 --> 00:38:30,578 to make sure it is as preeminent in 2030 and beyond as it has been historically? 545 00:38:30,738 --> 00:38:34,768 And as a result of that, over 300 different private sector organisations 546 00:38:34,788 --> 00:38:39,458 were consulted and we came up with a 50 page report, a vision for 547 00:38:39,458 --> 00:38:44,448 economic growth, which is a living document, it's got nine big moves. 548 00:38:44,888 --> 00:38:49,613 There are five main areas that we're focusing on, one is growth, one is 549 00:38:49,713 --> 00:38:55,763 a sort of a digital first, one is investment, one is green and sustainable 550 00:38:55,773 --> 00:38:57,863 finance and the fifth is connectivity. 551 00:38:58,523 --> 00:39:03,103 Those are the sort of five big buckets where we need to make sure that we've got 552 00:39:03,123 --> 00:39:07,163 some really good ideas and the purpose of doing this wasn't just to have something 553 00:39:07,608 --> 00:39:09,438 you know, a report to stick on the shelf. 554 00:39:09,898 --> 00:39:13,158 It was to have a report that came out in September that could be taken to the 555 00:39:13,158 --> 00:39:17,278 different parliamentary parties at the party conference season to say, this is 556 00:39:17,278 --> 00:39:22,208 what the private sector feels the City of London can accomplish and here's 557 00:39:22,208 --> 00:39:23,178 the way that we're going to do it. 558 00:39:23,588 --> 00:39:27,618 Very few things needed significant government intervention. 559 00:39:28,258 --> 00:39:31,488 Most of it could be done by just sort of changing the culture, changing the 560 00:39:31,488 --> 00:39:35,693 language, talking about, you know, the sort of risk aversion that's become 561 00:39:35,693 --> 00:39:39,473 a sort of form of paralysis that's inhibited our financial services 562 00:39:40,093 --> 00:39:41,453 from doing their job properly. 563 00:39:42,023 --> 00:39:48,573 But what it does is it basically gives us a strategy to keep Britain where it 564 00:39:48,573 --> 00:39:54,203 belongs in financial and professional services, and that aligns governments, 565 00:39:54,683 --> 00:39:58,383 regulators, because they've been heavily consulted in this, private sector. 566 00:39:58,783 --> 00:40:03,793 So that we can say this is the way the UK is presenting itself, this is what we 567 00:40:03,793 --> 00:40:08,833 think we can accomplish, and this is how we're going to do it and so, the idea 568 00:40:08,853 --> 00:40:14,813 being that we create a structure which enables a very regular rhythm of meetings 569 00:40:14,813 --> 00:40:20,493 between the government of whatever hue and the City of London, chaired by the 570 00:40:20,493 --> 00:40:24,973 Chancellor of the Exchequer of the day, meeting every quarter with the senior 571 00:40:24,973 --> 00:40:28,793 leaders from financial professional service to say, here are the priorities 572 00:40:28,843 --> 00:40:32,683 to make sure that we're continuing to do what we can do to support the 573 00:40:32,683 --> 00:40:34,523 government's growth investment ambitions. 574 00:40:35,063 --> 00:40:39,583 So that I think is an important point just to add, which is that, you know, you don't 575 00:40:39,583 --> 00:40:43,553 just have sort of a one off mayoralty where a Lord Mayor goes sort of flying off 576 00:40:43,553 --> 00:40:46,593 in one direction and the next Lord Mayor goes flying off in another direction. 577 00:40:46,593 --> 00:40:47,843 Consistency of communication. 578 00:40:47,893 --> 00:40:51,553 Yeah so this just sort of sets the tramlines as to what we're going to 579 00:40:51,553 --> 00:40:55,833 be accomplishing over the next sort of seven to ten years and there is, 580 00:40:56,048 --> 00:40:58,198 you know, real alignment around this. 581 00:40:58,208 --> 00:41:02,168 So I'm very optimistic, I think we've got a huge amount to look 582 00:41:02,168 --> 00:41:03,388 forward to in this country. 583 00:41:03,868 --> 00:41:06,958 We've got to be a little bit more optimistic about what we've got here. 584 00:41:07,038 --> 00:41:10,798 I get very frustrated by, you know, journalists and politicians who are 585 00:41:10,798 --> 00:41:12,468 endlessly talking this country down. 586 00:41:12,858 --> 00:41:19,068 We have so much that other countries admire hugely and I suppose my one 587 00:41:19,078 --> 00:41:22,548 takeaway from my year as Lord Mayor, traveling around the world to so many 588 00:41:22,548 --> 00:41:28,258 different countries is the extraordinarily high esteem in which this country is 589 00:41:28,258 --> 00:41:34,768 held for its role, the role that it has always played in geopolitics, in being a 590 00:41:34,773 --> 00:41:42,398 source of wisdom, integrity, good moral judgment, a great force of good in the 591 00:41:42,398 --> 00:41:46,478 world and gracious me with all of the challenges that there are around us in 592 00:41:46,478 --> 00:41:51,548 this world today, you know, the UK really has a need to step up and perform that 593 00:41:51,548 --> 00:41:57,618 role and right at the heart of it is what the City of London can do and I'm very 594 00:41:57,618 --> 00:42:02,808 proud to have been Lord Mayor, it was a huge privilege and you know, I think 595 00:42:02,808 --> 00:42:05,138 we've got everything to look forward to. 596 00:42:05,298 --> 00:42:06,838 Well, thank you very much, Nick. 597 00:42:06,898 --> 00:42:08,928 I've really enjoyed talking to you about it. 598 00:42:09,058 --> 00:42:10,148 Thank you very much indeed. 599 00:42:10,598 --> 00:42:13,328 Thanks for listening to this episode of Oxford+, presented 600 00:42:13,348 --> 00:42:14,768 by me, Susannah de Jager. 601 00:42:15,238 --> 00:42:18,658 If you want to stay up to date with all things Oxford+, please visit our website, 602 00:42:18,708 --> 00:42:23,518 OxfordPlus.co.uk and sign up to our newsletter so you never miss an update. 603 00:42:24,098 --> 00:42:27,258 Oxford+ was made in partnership with Mishcon de Reya and is produced 604 00:42:27,258 --> 00:42:28,908 and edited by Story Ninety Four.