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According to a top UK fund manager, the “serious illness” in the UK capital market has inhibited the growth of local tech entrepreneurs and made London’s blue-chip FTSE 100 index look like a 19th century index.
James Anderson, who made early bets on Facebook, Amazon and Tesla to make him one of the most successful investors in the world, said in harsh criticism that too many British asset managers are obsessed with short-term performance rankings. , Afraid of taking risks.
“Why haven’t we developed any big companies? I certainly don’t want everyone to be like [Amazon founder] Jeff Bezos. But in my opinion, there is a real problem here,” Anderson, co-manager of Bailey Gifford Scotland Mortgage Investment Trust, told the Financial Times.
“The FTSE 100 Index is actually a 19th century index, not even a 20th century index,” he added, noting the lack of innovative and fast-growing companies in the UK.
Through bold bets on American and Chinese entrepreneurs, including Amazon’s Bezos, Tesla’s Elon Musk and Tencent’s Ma Huateng, Anderson has turned the Scottish mortgage company into a company in the past two decades. The unlikely tech investment star.
Since Anderson began operations in 2000, the approximately £18 billion trust has provided shareholders with a return of 1,500%, compared with 277% of the FTSE Global Benchmark Index. Anderson will retire from Edinburgh-based Baillie Gifford in April, when he will hand over the Scottish mortgage to Tom Slater, who has been co-manager since 2015.
Anderson’s criticism is in Government-supported city review In March, it called for a comprehensive reform of the listing rules, including the introduction of dual equity favored by entrepreneurs, so that London can pull more technology companies away from Wall Street.
“Why are people willing to get high salaries for relatively undemanding things, but don’t have the dream of creating these truly great companies?” Anderson said, pointing out that the UK lacks an entrepreneurial culture.
“I think that kind of frustration, there must be many different reasons. Many of them are on the fence on my side. But in my opinion, something is wrong.”
Anderson added that the UK needs “one or two people” to open up a path to entrepreneurship. “When will these people suddenly appear?”
He pointed out the different entrepreneurial cultures in other European countries—”[Dutch chipmaker] ASML is different [Swedish streaming company] Spotify”-“But it doesn’t exist in the UK. I do think that there are not enough people to support it. ”
In an extensive interview, Anderson also stated that domestic shareholders in the UK failed to support local companies in the acquisition process, on the grounds that SoftBank of Japan acquired Arm Holdings, a smartphone chip designer, for £23.4 billion in 2016.
Although some shareholders, including Baillie Gifford, opposed the transaction, “we couldn’t find enough shareholders to support serious efforts to keep Arm independent,” he said.
Anderson compared the fate of Arm with the fate of the American biotech company Illumina, which is currently the second largest holding company of the Scottish Mortgage Company. In 2012, Baillie Gifford and other shareholders helped Illumina withstand Roche Holdings’ $6.8 billion hostile acquisition attempt.
He also warned that too many investment companies “operate as enterprises, for the enterprises and themselves, not investment institutions. The amount involved is so large that this may be a huge temptation.”
Anderson will retire from Baillie Gifford because environmental, social, and governance issues are accelerating the agenda of companies and the fund management industry. He warned against the dangers of ticking ESG.
“The life of bad managers is much easier, because if they just abide by the combination of bonus system and ESG, they can survive… and get very good pay. It is increasingly difficult for companies to really consider building competitive The task of the moat.”
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