(Bloomberg) -- Rebooting the UK’s languishing capital markets will be a key priority for the new Lord Mayor of the City of London, who’s set his sights on attracting further investment from fast-growing regions such as the Gulf.
Alastair King, who became London’s 696th lord mayor last weekend, said regulatory certainty is a “prerequisite” to attract capital to the city, yet its sluggish markets are acting as a drag.
“In my career, I have scaled two businesses through the public markets,” he said in an interview with Bloomberg News. “There’s no way I could do that now because of, you know, the liquidity isn’t there, the demand isn’t there.”
King ran Galahad Capital and Eredene Capital while they were listed on London’s Alternative Investment Market, and said there’s a need to “recreate” the path for scale-up companies raising money.
Last year, initial public offerings on UK markets hit the lowest level since the 2008 financial crisis. While share sales and trading volumes have struggled across the region, London has felt the pain acutely in the eight years since the UK voted to leave the European Union.
“But Brexit is only one of those challenges,” King said. “Covid is another, political uncertainties is another, and fallout from the global financial crisis.”
King will make his arguments in a speech to politicians, regulators and city grandees at his Mansion House residence on Thursday evening. Other speakers include Chancellor Rachel Reeves, who has vowed to boost capital flowing into the UK with policies such teaming pension pots with private finance.
A succession of previous changes to London’s investing rules have done little to stoke demand for shares in the city, highlighted by Cambridge-based chipmaker ARM Holdings Plc choosing to go public in New York rather than its home market last year. Consumer credit firm Klarna, which was at one stage Europe’s biggest startup, said Wednesday it has also filed for an IPO in the US.
Across the UK economy, an extra £100 billion ($130 billion) of fresh investment every year would be needed to put the country on track to achieve 3% annual growth, according to a recent report from the Capital Markets Industry Taskforce — a committee of sector leaders set up by the previous government two years ago to examine the problem.
King, a 56-year-old asset manager and former corporate lawyer, has been appointed for a one-year term as lord mayor. He will serve as a figurehead for the City of London, combining ceremonial duties with a global tour showcasing the capital’s financial industry. His first overseas trip in office will take him to the Gulf states next week, where he hopes to make as many as four visits during his tenure.
He will also be welcoming the Emir of Qatar, Sheikh Tamim bin Hamad Al-Thani, to the Square Mile during the leader’s state visit to the UK next month.
King is also planning China, India and Japan, where he will make the case for primary and secondary listing on the London Stock Exchange. He’ll also travel to Australia, whose pension funds could have lessons for their British counterparts.
“I’m very happy to get on planes myself to go off and tackle new markets because that’s what we need to do,” King said.
The lord mayor said he was likely to travel to the US after the inauguration of president-elect Donald Trump. “We are trying to be one of the real great global financial centres,” he said. “We cannot have a bad relationship with the largest economy in the world. So therefore we will be going there.”
--With assistance from Rob Dawson.
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