Jonathan Dann

#Hargreaves_Lansdown Hargreaves Lansdown backed the £5.4 billion bid for the FTSE 100 fund manager today from a private equity consortium, a deal that will end its time as a listed company. The Bristol-based finance firm has been listed in London since 2007. It said today that the final offer valued its shares at 1140p in cash and would include a 30p per share dividend for the financial year which ended on 30 June. Compared to the Hargreaves Lansdown share price before the approach was first made in April, the price is at a premium of over 54%. The consortium is made up of CVC, Nordic Capital and ADIA. Hargreaves Lansdown is named after its founders – Peter Hargreaves and Stephen Lansdown – who set it up as an investment tip sheet. It now runs a state-of-the-art trading platform from which clients can run their own portfolios and pensions. https://lnkd.in/dKpizupy

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The British Business Bank produced a great report last week on the performance of UK VC funds (link in comments) over the last 20+ years. As with all reports like this, it's really important to dig into the detail and not just rely on the headlines. In particular, I was keen to compare the performance of the best UK funds to those in the US. While accepting the limitations of the data (all performance data on VC is based on a very low sample size), it's still interesting to see how the UK funds in the BBB report compare to the Cambridge Associates US VC benchmarks. As you can see from the chart below, the top quartile benchmark for UK funds exceeded the US funds for the period 2002-2007. But the sample size for UK funds in this period is particularly low (eg just five funds for the 2004/05 period). Since 2008, the top quartile UK funds have underperformed the US benchmark, and since 2010 are much closer to the US median return than the upper quartile. There are some outstanding founders and companies in the UK and some strong-performing VC funds. But the reality of VC is that performance is driven by a small number of outlier investments. Without these, it's almost impossible to deliver 3x net returns to LPs. For the UK to really become competitive with the US, we need to see more UK-based companies able to scale and exit at valuations in excess of $5bn. Unfortunately, there are no easy solutions to achieving this. We consistently hear from our VC managers that there is no shortage of capital for the best UK companies. Where there is a shortage is in the number of world-class founders looking to build in the UK. Get this right and the capital (and returns) will follow.

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Great webinar with FT Live on the Global M&A Outlook in the EMEA Region. There is a feel of the optimism in EMEA’s M&A landscape, with private equity leading the charge and valuations on the rise. Geopolitical certaintly, growth agenda, and interest rates certainly will provide confidence in the market, therefore, the future is looking really good. #wheredealsaremade #privateequity #mergers

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There has been lots written about the impact of the budget, and some names are dominating the headlines. At the smaller end of the market where YFM Equity Partners invests we can already see Entrepreneurs and Business Leaders adapting to the new normal, and most positively where there will be opportunities to grow faster. One of the things we did not expect to see so quickly is a surge in Entrepreneurs looking to do some sort of ownership change transaction, The Business Magazine - South West & West Midlands / The Business Magazine - South East covers the 300% increase in enquiries below. These enquiries are Management Teams looking to buy the businesses they run from their owners, or owners looking to de-risk themselves with some cash out now and support from a Private Equity investor.

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Another important milestone on the Hyperoptic journey with this commitment from UK Infrastructure Bank, which gets us very close to completing our current round of fundraising for the business. UK #fibre is an interesting one. At a macro level, the UK is - together with Germany - one of the two major European markets with significant potential left when it comes to fibre roll-out. Unsurprisingly, and as a consequence, that market has attracted a lot of #privatecapital. The micro though, as always, is more nuanced, and successful ventures in the sector require sound strategies focused on market segments where your business has a right to win, and strong management teams. We are blessed with both at Hyperoptic. Since establishing the business in 2011, CEO Dana Tobak and her team have gone from strength to strength and never lost sight of the fact that the whole exercise is about creating value: building high quality infrastructure as well as monetising that #infrastructure by offering a top-quality product and service to the company's customers. This has resulted in the company displaying best-in-class customer take-up and winning the trust of multiple investors and lenders along the way, as displayed by the current successful funding round in what is undoubtedly a challenged sector. We are thrilled to continue supporting the growth of the company in the years ahead and to contribute building a first-class #digitalinfrastructure supporting the UK economy and society.

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It was a pleasure to once again join Ali Miraj on LBC last Sunday to discuss the UK’s pressing energy efficiency problem – a recording of which can be found here: https://lnkd.in/etCT6Eby (Time stamp: 1:03:00)   The UK’s centralised grid is ageing, expensive and inefficient. Decentralised energy, or bringing energy closer to the point of use, would make a huge difference to not only minimising energy losses, but also questioning the controversial need for building more transmission lines across the countryside.   The UK government’s commitment to addressing the grid’s connection issues is commendable but, as the debate around constructing pylons continues, a key question the government should be asking itself is: what should we be prioritising? Frankly, as least as much attention needs to be paid to the fact that the UK wastes about 2/3 of its energy, with around 55% of the energy used to make electricity lost in the current generation, transmission and distribution system.   I also wrote a Substack on the issue of centralised energy in the UK here: https://lnkd.in/eDeG8j73

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Good to see our comments picked up regarding the confirmed cash bid for Keywords Studios today by EQT for £24.50 per share or just under 16x trailing Adjusted EBITDA; a large premium to the May 17th closing. This is a major deal that could kick start significant follow-on M&A activity and drive the KWS market leadership position through selective M&A and technology investment. The Bidco comprises EQT (51%) and is also flanked by heavy hitters including CPP Investments (24.5%) and Rosa Investments, subsidiary of Singaporean based Temasek who collectively manage north of $1 trillion in assets globally. “We see clear angles to create a services powerhouse of scale over the next five years and drive global integration around the service lines, in particular engineering, to make KWS the go-to shop for services globally,” Goodbody analyst Patrick O’Donnell wrote in a note. "There is also a clear angle on M&A with companies like Virtuos, an engineering/Art AAA service company in which EQT has a minority position,” he added. #videogaming #Consolidation #growth #gameservices

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A very interesting but substantial opinion piece from Bloomberg on Starmer’s government and its apparently vindictive approach to policy and delight in paying off its union support. They are indulging their core support from deeply vested interests while not seeking improved productivity and modern work practices. This is bold when the landslide vote result obscures the meagre 34% share of vote. “A deeper reason is that needlessly antagonizing Middle England will do nothing to address the country’s underlying problem, its dismal growth rate. Labour’s central promise was to improve productivity. Yet it failed to use pay rises as a way of pushing through productivity improvements — and now risks setting off a competitive round of wage inflation. It was all quid and no quo. Giving productivity-free pay rises to strike-prone workers while claiming that there’s a financial crisis is not a good way of building sustainable support for your policies”.

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Head of Equity Trading, Jeffrey Collins joined Joe Lynam on Newstalk’s Breakfast Business this morning to share his insights on semiconductor manufacturer and stock market giant NVIDIA, he also reflected on equity market performance for the first half of the year, highlighting the AI boom that we’ve seen dominate so far. Jeff and Joe also discussed the premise of the European Commission investigation into Apple based on the newly created Digital Markets Act (DMA). Listen below. #NVIDA #equitytrading #stockmarket #marketdip #shares #europeancommission #regulations #apple #digitalmarketsact #gatekeeping #interoperability #AI #semiconductors #tech #H1

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Investment announcement: Fractory Our latest investment from SmartCap Green Fund in Fractory brings us forward on the way of transition to circular economy in industrial production. Glad to give a push to the green transition of industry as industrial activity accounts for 1/3 of the global energy demand and increasing production volumes lead to growing demand for materials. Fractory is a digital manufacturing tech platform to streamline metal fabrication services from cutting & bending to CNC machining and enables: - enhancing production machinery utilization rates in factories across the supplier network from industry average of 26% up to 80%. So, fewer machines are needed for the same production volumes. - reducing waste of materials by pooling orders and optimizing the use of existing resources.

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Few would disagree that our NHS is on its knees and needs fundamental reform.   What’s important now, is how we get to the crux of the challenge and identify potential solutions. As Rt Hon Wes Streeting MP eloquently puts it – diagnosing the problem before we write the prescription. Lord Darzi's 2018 report, "Better Health and Care for All: A 10-Point Plan for the 2020s", highlights his expertise and visionary approach to healthcare reform. Known for his impactful 2008 report, Lord Darzi demonstrates his ability to address the critical challenges facing the NHS. His emphasis on radical simplification, a shift from a "diagnose and treat" model to a "predict and prevent" one, increased funding, and adopting technological innovation, resonates with Evergreen Life's mission to empower individuals with their health data to live healthy happy lives. By collaborating, we can drive the transformation necessary to secure a sustainable and person-centric future for the NHS. #Healthcare #NHS #Innovation #DigitalHealth #EvergreenLife #LordDarz https://lnkd.in/egjaA_nJ

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The Liontrust Economic Advantage team was delighted to support the IPO of Raspberry Pi earlier this week, buying a position for the Liontrust UK Smaller Companies Fund. We are very pleased that such a high-quality tech company has chosen the UK to list. The team first engaged with the company in October 2021 and were attracted to the strength of the intellectual property, brand and cash flow return on capital profile, allied with insider ownership. Victoria Stevens Matthew Tonge Alexander Game, CFA Liontrust Asset Management PLC Raspberry Pi #ukequities #economicadvantage Capital at risk. This should not be construed as investment advice.   https://lnkd.in/e5kq-JUR

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It was fantastic to have been a panellist at today’s EntreConf and EntreConf Awards, a vibrant two-day conference for entrepreneurs and advisers. I was joined on the ‘Funding Routes’ panel by Richard Spilsbury of Link Stone Advisory, David Goodall of FW Capital and Paul Duggan of Blake Morgan LLP. Key takeaways from our discussion, which was moderated by Greg Ingham, formerly of Future Publishing LLC, included: 💰 The market is much more positive than headline figures suggest. There are lots of options out there for those seeking funding. 💰From VC and CVC (Corporate Venture Capital), to off balance sheet investments by the big strategics, as well as family offices, HNWs, debt, grants and invoice discounting, there are plenty of routes depending on what stage you are at. 💰A VC will look at your business differently to a CVC. A VC will be assessing your business plan, the expertise of the team and whether they can deliver and scale the business, as well as whether the problem/solution you are addressing is big enough to lead to scalability. They will also look at your routes to market, financial performance and quality of earnings, with recurring revenue being the nirvana. 💰 A CVC wants to see all of the above - but also where your business fits within their strategic roadmap to use their investment to accelerate their innovation. 💰Although there is a cost of raising capital to a business, the benefits of having the right investors on board is vast and a driver for turbo-charging growth. 💰When you're looking to create your target list from the universe of investors, ensure you include sector focus funds who will be targeting businesses within your industry to find the best fit. #fundingroutes #entreconf #investment #capitalraise

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DULL = EXCITING Putting aside politics, the widely expected UK election result and the dull, respectful and seamless power transition is a welcome relief from the constant political/geopolitical turmoil of recent years, which still continues across many Western capitals. Being negative on the UK has become very fashionable, but it remains the global gold standard in terms of a functional democratic system and the rule of law, things which are very important to investors and business alike. A new administration with a strong public mandate and long-term horizon has the right platform to deliver economic growth and unlock the significant investment into UK assets (both financial and real) which has been sitting on the sidelines since the Brexit vote. Economic growth and investment is ultimately the only way to fix the UK's challenges. The mechanics of the UK economy haven't changed just because of an election, but at least some risks have been retired for the medium-term.

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Are you interested in #AI? It's worth taking a look at the Disruption Index launched today by Institute for the Future of Work and Imperial College London. This thought provoking and future focussed policy work will play a key role in ensuring AI is embedded in a responsible way - unlocking good work and growth across all corners of the UK. More below.... #responsibleAI #futureofwork #impactinvesting #worldchangingreturns

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Scottish broadcaster #STV - which owns the #ITV1 franchise in Scotland - gave a Q3 trading update this morning. Some brief points and interesting read-across for ITV: 1. The language makes it clear both the mainly UK #advertising and commissioning environments are tough at the market (the two of course are linked). That will not come as a surprise to anyone but, given it is now near the end of November and there will be visibility on December, it is clear there is no end of year positive bounce. The obvious question now is whether this feeds into 2025; 2. STV stated that Q4 Total Advertising Revenues are expected to be down 10%. That compares with ITV which stated that Q4 should be down 6-7%. I do not think that necessarily means the environment has worsened for ITV - there has been more divergence between the two broadcasters which have historically been linked when it comes to advertising performance (in Q3, STV saw +5% TAR and ITV was flat) - but it is worth keeping an eye out for; 3. STV's production arm continues to grow in importance for the business. One question is, if ITV is the subject of a bid as Sky News has suggested, whether any acquirers look to buy STV as well in order to both consolidate the network and grow the production side of the business. As usual, this is not investment advice.

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Whoever wins the General Election, capital markets and investment are going to be key to delivering their priorities given little capacity in the public purse. Investment companies are the proven bridge between investors and assets such as infrastructure and renewable energy and they can play a critical role in helping the next government achieve its ambitions for economic growth. Beyond that, as a nation, we need to save and invest more, drive better returns in our pension funds and direct more of that capital towards our domestic markets (the UK ISA was one such initiative). Investment companies are a ready made, proven (over 150 years!) solution to these challenges.

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What does Zonal Pricing achieve, with all its associated risks and costs for existing and potential investors, that far outweighs a sleeved PPA? Why must purchasers physically relocate to benefit from more affordable power in a small, single, integrated electricity market such as the UK? Other countries may have zonal pricing but to use that as the argument for says nothing at all - in fact it ignores all the key differences between countries in terms of land availability, regulations, operations, systems…. How will this benefit consumers in the South of England where costs are prohibitively high as alternative land use value is huge. This seems like a classic example of comparative advantage being turned on its head, due to inadequacy of grid infrastructure, which is being rectified (too slowly). What am I missing here?

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