Financial Services Industry
- 1 Financial Adviser
- 2 Financial Services + Insurance
- 3 Stock Market
- 4 Stock Brokers
- 5 Accounting Services
- 6 Banking Industry
- 7 Credit
- 8 Gambling Industry
- 9 Deregulation
- 10 Fees
- 11 Investment Firms
- 11.1 Alvarez & Marsal Holdings LLC
- 11.2 Private Equity
- 11.3 Private Equity and PFI/PPP
- 12 Articles
- 13 Regulation
- 14 Articles
Financial services > Category:Financial services in the United Kingdom > Category:Financial services companies of the United Kingdom > Category:Banks of the United Kingdom > Category:Royal Bank of Scotland Group > Royal Bank of Scotland
- Good source of info here: http://www.thisismoney.co.uk/money/index.html
- Excellent explainer re lP -vs- GP here
- Financialisation and its (bad) effects: Complexity Labs
- Watchdog: Financial Ombudsman Service
- See the IUF pages on private equity http://www.iuf.org/show.php?lang=en&tid=78 here], and their booklet A Workers' Guide to Private Equity Buyouts (2007).
- Go through RAN's report "Banking on Climate Change"
- The Industry changed (for the worse) on May.01.1975, when commissions were deregulated. As commission rates dropped, other ways to make money for the house had to be found. ref, 8:15
The Finance Curse: "Once a financial sector grows above an optimal size and beyond its useful roles, it begins to harm the country that hosts it. “People who might have become scientists, who in another age dreamt of curing cancer or flying people to Mars, today dream of becoming hedge-fund managers.” The financial sector does not support the creation of wealth - it extracts it from other parts of the economy. IOW, the Financial Industry is a leech.
Business' core purposes have been whittled down through ideological shifts, to little more than a single-minded focus on maximising the wealth of shareholders, their owners. Private Equity firms typically buy up a solid company, then financially engineer that company to squeeze all its different stakeholders, one by one. they borrow more against that company and pay themselves huge “special dividends” from the proceeds. Or consider the financial structure of Trainline - yet another tax haven company.
The competitiveness agenda, driving us into this race to the bottom, is intellectual nonsense resting on elementary fallacies, lazy assumptions and confusions. The race does not stop when tax rates reach zero; eliminate their taxes, appease them, and they will demand other subsidies - see Amazon, for starters.ref Linkback: KKR, PFI
- Types of investment adviser: https://www.fca.org.uk/consumers/types-investment-adviser
- Financial adviser, Financial adviser § United Kingdom, Independent Financial Adviser
Owned by Quilter plc. Quilter Group of companies: Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory; Old Mutual Wealth Heritage; Intrinsic; Quilter Private Client Advisers; Quilter Cheviot; and Quilter Investors. ref, ref, ref
- http://intrinsicfs.com/why-intrinsic/, https://www.intrinsicfs.com/about-intrinsic/
- Established by Lord Leitch, the former global CEO of Zurich Financial Services life businesses, in 2006. The Intrinsic Group is the largest network of advisers in the UK. Focused on tailoring advice and solutions for individuals and businesses across the entire spectrum of advice, we remain committed in maintaining a strong reputation for professionalism and integrity. In Jul.2014, the Intrinsic Group was acquired by Old Mutual Wealth, part of the Old Mutual Group.
- Intrinsic Financial Services Ltd is the parent company of: Intrinsic Wealth Ltd regno 04500273; Intrinsic Financial Planning Ltd regno 05506637; Intrinsic Mortgage Planning Ltd regno 05495327; Positive Solutions (Financial Services) Ltd regno 03276760 ref
- Nov.30.2015: Ombudsman backs Intrinsic over adviser status. An Intrinsic Financial Planning adviser has been accused by a couple of not making her tied status clear and leading them into thinking she was an IFA. The Financial Ombudsman Service has ordered Intrinsic Financial Planning to compensate a couple who complained that being encouraged to invest into two investment bonds and two Isas was unsuitable and that the investments performed poorly. The ombudsman ordered Intrinsic to refund half the commission it received... Emma Ann Hughes, FT Adviser.com.
Financial Services + Insurance
Coming to Terms with Insurance Aggregators: Global lessons for carriers, link Insurance Aggregator Market to Witness Huge Growth by 2025 | Leading Key Players: Admiral Group, Esure, Amazon, BGL Group, ref, Sept.2018
- Links to check out: Upcoming Financial Crisis That Will Dwarf That of 2008 - Expect Civil Unrest (video)
- Nicholas Hyett, Hargreaves Lansdown plc
- Jun.03.2018: I thought my cash was safe. I feel betrayed. Customers of a failed stockbroker could lose 40% of their money — funds they were told were ‘ring-fenced’. Investors often assume their money will be safe if their stockbroker runs into financial difficulties — after all, they are simply using the firm to buy into other companies. However, thousands of people have been horrified to discover this is not the case. Beaufort declared that its clients’ funds were “ring-fenced” from its own operations. However, clients’ money will be used to help pay the estimated £55m bill of the company’s administrator, PwC. PwC can do this because of a rule introduced in 2011, in the wake of the collapse of American investment bank Lehman Brothers, that allows administrators to use ring-fenced client funds to cover the costs of distributing the assets of an insolvent business if it has no money left. Investors will be able to lodge a claim with the Financial Services Compensation Scheme for losses resulting from the administration costs, though it has a £50,000 limit so some could still be left heavily out of pocket. Lord Lee of Trafford, a Liberal Democrat peer, described the £55m bill as a “grotesque amount of money [to administer the collapse of] a small to medium-sized stockbroking firm”. PwC cut its estimate from £100m after a public outcry last month, though it denied the reduction was in response to the criticism. Rachel Reeves, Labour MP who chairs the Commons business, energy and industrial strategy committee, said PwC’s fees represented “yet another example of one of the Big Four accountancy firms looking after themselves and profiting from the collapse of a company, while those who have invested money are pushed to the back of the queue”. Mark Neale, chief executive of the FSCS, the official safety net for savers and investors, said: “The more the costs are allocated on a proportionate basis — relative to the size of clients’ cash or asset holdings — the bigger the share of the cost likely to be borne by wealthy clients with cash and assets in excess of our current £50,000 limit.” ShareSoc, which represents individual investors, has urged Beaufort clients to write to their MPs about PwC’s fees. You can protect yourself by ensuring you do not hold more than £50,000 with one investment broker so you are fully covered by the FSCS. The UK Shareholders Association, another lobby group, said the Beaufort case also raised questions about investments held in nominee accounts, rather than directly by an investor. The Shareholders’ Association said investors would have been better protected if they had held shares directly — buying, say, Tesco shares from its share registrar rather than via Beaufort as nominee. Ali Hussain, The Times. See the Comments section
- Dec.18.2018: Audit overhaul threatens to split up the Big Four. The accountancy sector faces a radical overhaul after two govt-backed reviews called for companies to split their audit and advisory businesses and proposed replacing the industry regulator. The inquiries were launched in the wake of anger about the role of auditors in a series of corporate scandals, including the collapses of BHS and Carillion. Critics of the industry, including politicians, have accused the Big Four accountancy firms of Deloitte, PwC, EY and KPMG of being too dominant and of focusing on generating revenues from offering advice rather than on the quality of audits. The Competition & Markets AuthorityA parallel, government-commissioned investigation by Sir John Kingman, chairman of Legal & General, into the regulation of auditing will recommend to govt today that the Financial Reporting Council be closed and replaced by a new entity with new leaders, stronger powers and greater oversight from parliament. has recommended that the audits of companies in the FTSE 100 and FTSE 250 should be carried out by at least two firms, including one from outside the Big Four. It also said that companies should not be allowed to appoint auditors without regulatory oversight and proposed that the Big Four ringfence their audit practices with separate management, profits and remuneration from the consulting and tax divisions of the firm. The FRC is part-funded through a voluntary industry levy, which Sir John called “seriously inappropriate”. The CMA faces opposition within the industry. Tabby Kinder, The Times. See also Audit review: two inquiries, the same conclusion.
- Oct.09.2018: Consulting ban could cost audit firms £1bn. The Financial Reporting Council could force the Big Four accountants to strip out more than £1 billion in annual income, or about 10 per cent of total revenues, as it looks into banning firms from providing consulting services to the companies they audit. Regulators, politicians and some investors want the accounting industry to be overhauled because of concerns that the fees available from non-audit work could create a conflict of interest that leads to lower-quality audits. Frank Field, chairman of the Commons’ Work and Pensions Committee, said in January that poor business practices were being “waved through by a cosy club of auditors, conflicted at every turn”. Tabby Kinder, The Times.
- Aug.24.2018: Big Four in talks to head off accountancy shake‑up. Regulator under pressure to act over scandals and failures. Executives at Britain’s largest accounting firms are holding last-minute talks to try to agree proposals to reform the industry and halt a review by the competition regulator. The Competition & Markets Authority is under pressure from politicians to review the dominance of the Big Four — Deloitte, PwC, KPMG and EY. A string of corporate scandals and failures has renewed concerns about the quality of audit work and lack of choice for businesses. The Big Four firms audited all but nine of Britain’s 350 largest companies last year. The chief executives of the 9 largest firms were preparing for a conference call today to finalise a list of proposals to be sent to the watchdog. The group, which also includes BDO, Grant Thornton, Mazars, RSM and Moore Stephens, intends to hand over the proposals on Tuesday. Draft proposals ... reveal that the plans could include.. The Big Four’s international heads are putting pressure on their British counterparts to find a solution. It is understood that the international bosses, most of whom are based in the United States, are concerned that a full inquiry into how UK companies are audited could harm their businesses by forcing them to stop working for some clients globally in order to improve choice in the British market. Grant Thornton is concerned that the proposals were prepared in a series of secretive discussions. The group will submit the proposals before a Competition & Markets Authority board meeting in September when it will discuss an investigation. Tabby Kinder, The Times.
- May.28.2018: Big Four, big changes and big question marks. Each of the Big Four — Deloitte, EY, KPMG and PwC — is a case study of corporate triumph, but also of ethical compromises, professional angst, botched ventures, debauched parties, scandalous marriages, disreputable interests and arcane rites. With almost one million staff operating worldwide (not counting subcontractors), the Big Four are collectively one of the world’s top employers. The four firms dominate several key markets for accounting, tax and audit services. Nearly all the largest businesses in the United States and the United Kingdom, for example, are audited by one or more of the firms. Of the 500 companies in the S&P 500 index, 497 used a Big Four auditor in 2017. Nearly all those businesses also buy management consulting services from the Big Four. The Big Four got to where they are today through a complex process of commercial marriages in the 1980s and 1990s — a process so elaborate and repetitive it is suggestive of fractal biology. The Big Four got to where they are today through a complex process of commercial marriages in the 1980s and 1990s — a process so elaborate and repetitive it is suggestive of fractal biology. With the Big Four operating under a valuable monopoly concession in auditing, observers have noticed the commoditisation of audit services, and an erosion of their scope and reliability. The accounting and auditing industry has reached a state of cosy equilibrium. The firms collaborate in industry forums; staff move regularly between them; the firms match each other’s market presence and service lines, and copy each other’s pricing, outputs and marketing strategies. Things are about to change. ... the Big Four have been drawn into a toxic series of tax scandals, including Lux Leaks and the Paradise Papers. Ian Gow, Stuart Kells, The Times.
- Nov.08.2018: Big investors sue 16 banks in U.S. over currency market rigging/ A group of large institutional investors has sued 16 major banks, accusing them of rigging prices in the roughly $5.1 tn-a-day foreign exchange market. The banks being sued are: Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan Chase, Morgan Stanley, Japan’s MUFG Bank, Royal Bank of Canada, Royal Bank of Scotland, Societe Generale, Standard Chartered and UBS. Jonathan Stempel, Reuters.
- Jun.01.2018: Banks face curbs on overdraft charges. Banks could have to text their customers to warn them if they are about to be charged for going overdrawn, the Financial Conduct Authority has said. The regulator said yesterday that it was considering reforms that would give borrowers more information on how much they could be charged, and when. High street banks face the loss of billions of pounds after the FCA said that it could force through measures to protect borrowers from being pushed to take on unmanageable debt. It said that it was considering reforms to the consumer credit market, including a price cap on bank overdrafts and an outright ban on fixed charges for customers going into debt. Harry Wilson, The Times.
Canaccord Genuity Group Inc
The company operates through:
- Canaccord Genuity: provides investment banking, research, and sales and trading services to corporate, institutional and government clients, as well as conducting principal trading activities in Canada, the United States, the United Kingdom and Europe, and the Asia-Pacific region.
- Canaccord Genuity Wealth Management provides wealth management solutions and brokerage services to individual investors, private clients, charities and intermediaries. has offices located in Canada, the UK, Guernsey, Jersey, the Isle of Man and Australia. Webpage
- Sept.2017: Hargreave Hale Ltd acq'd by Canaccord Genuity Wealth Group Holdings (Jersey) Ltd, a UK-based wealth management business. As part of the integration process, the company commenced trading as Canaccord Genuity Wealth Management in Apr.2018, the same trading name as the wider UK group. CH, , , link, link
- Eden Financial Ltd, link
- Collins Stewart Hawkpoint plc, link, ,
- Canaccord Genuity Capital Markets, the international capital markets division, is based in Canada, with offices in the US, the UK, France, Germany, Ireland, Hong Kong, China, Singapore, Australia and Barbados. Webpage
- Corporate & Other: includes Pinnacle Correspondent Services, interest, foreign exchange revenue and expenses falling outside of the other two segments.
Robey Warshaw LLP
- Nov.17.2018: £12m banker has lean year. Top bankers at one of the City’s most successful advisory businesses have taken a pay cut of £40 million this year amid a fall in big deals. Robey Warshaw reported a £43m fall in turnover in its financial year to the end of March. This was reflected in the profits for share among its 3 partners, which fell from £63.3m to £21.3mn. Harry Wilson, The Times.
Royal Bank of Scotland (RBS)
- Jan.20.2018: "They massacred tens of thousands of UK companies through that unit." @Ian_Fraser on RBS' Global Restructuring Group. @RealMediaGB, Real Media GB.
- Jan.19.2018: MP blasts bank’s arrogance. MP Hugh Gaffney has urged Royal Bank of Scotland customers to "vote with their feet" and move their accounts. This comes after RBS's director of personal and business banking Les Matheson appeared before the Scottish Affairs Committee where he refused to give any consideration to a re-think on closing branches. RBS is to close 62 branches all over Scotland by the end of June this year which will save aorund £9.5m. Mr Matheson told the committee that the closures were "not about saving money" which led Lyn Turner from Unite Scotland to speculate that the bank is pressing ahead with branch closures to send the message it is "now ready for sell-off". (more... Motherwell Times.
- Dec.31.2013: Bank Corruption Down Under. Lawrence Tomlinson had been commissioned by the Business Minister, Vince Cable, to examine any difficulties that small business faced in escaping the debilitating aftermath of the GFC, especially in the arena of credit availability. Tomlinson’s brief report exposed a concerted strategy within the Royal Bank of Scotland to default viable business customers. Evan Jones, CounterPunch.
- High Cost Credit: https://www.thebureauinvestigates.com/projects/high-cost-credit
- Mar.27.2018: Stella Creasy to call for crackdown on high-cost credit cards. Michael Sheen's campaign End High Cost Credit Alliance was worried about the impact of high-cost credit cards for vulnerable borrowers. The efforts come after the New Economics Foundation said credit card debt was becoming as unmanageable as payday loans had been before that industry was regulated. The Money Advice Service estimates up to 8.3mn people are lumbered with problem debt, while separate research suggests 3mn households pay more than 25% of their income to creditors. Some credit card companies such as Aqua and Vanquis specialise in lending to poorer customers with weak credit scores and can set their annual interest rates in the region of 60%, which is more than triple the average quoted rate for the product, according to figures compiled by the Bank of England. The FCA has already ruled out taking such steps after a review of the market last year; instead, it introduced rules earlier this year forcing lenders to contact their customers once they have been in persistent debt for 18 months, with an option after 36 months to write-off those debts. Linkback: Stella Creasy Richard Partington, The Guardian.
- Mar.20.2018: Michael Sheen launches campaign against high-cost lenders. Actor will scale back Hollywood career to take on high-interest credit providers such as Wonga and BrightHouse. Michael Sheen says his End High Cost Credit Alliance will back fair finance providers and not-for-profit loan organisations. Campaign group of politicians, charities and tech companies he has brought together, working to promote more affordable ways of borrowing money. Sheen wants to analyse the flaws of universal credit, discuss the shortcomings of the government’s welfare reform programme and focus on ways to reduce household debt levels. He is enraged by curtailment of government crisis loans and by the spread of chronic debt but he is also exceptionally well-informed about the subject and passionate about finding ways to improve things. 3mn UK households are paying more than 25% of their income to creditors. He hopes to be able to raise awareness about not-for-profit loan organisations, like Moneyline, Scotcash, or Street UK. Tracey Crouch is one of the alliance’s members, as is Ed Miliband. Amelia Gentleman, The Guardian.
- Dec.26.2018: Wonga collapse clears decks for US payday loan firms in UK market. US lenders emerge as big players despite customer complaints and high-cost credit clampdown. QuickQuid, WageDayAdvance and Sunny – owned by American-listed firms Enova, Curo and Elevate Credit, respectively – have made strides despite a clampdown on high-cost credit by Britain’s financial regulator and a recent surge in customer complaints. The Financial Conduct Authority’s cap on payday loans charges came into force in 2015 and kept lenders from charging customers more in fees and interest than the amount borrowed. Some competitors shut shop as a result and Wonga fell into administration 3 years later. It cleared the decks for US-owned rivals. Chicago-based Enova, which also operates Pounds to Pocket and On Stride, saw UK revenue jump 20% to $36.6m (£29m). Texas-headquartered Elevate Credit operates in the UK under the Sunny loans brand, and saw its own UK revenue jump 23% to $32m, as new customer loans for Sunny rose 45% to $26,671. Curo saw UK revenue jump 27.1% to $13.5m, while underlying earnings nearly halved from $8.1m to $4.2m. It was helped by a “high percentage of new customers”. Kalyeena Makortoff, The Guardian.
- Sept.05.2013: Payday loans companies charging up to 7,000% experience huge growth. Controversial payday loans companies, some charging interest rates as high as 7,000%, have experienced phenomenal growth since the start of the recession. New research by the Bureau, which analysed dozens of company accounts and websites, found a rush of companies into the industry. At least 24 new ventures have been launched in the high cost credit sector since 2008, some operating several different trading companies and many offering short-term payday-style loans. But far from feeling squeezed by the increased competition, all but one of the ten largest lenders specifically offering payday loans saw their turnover more than double in just three years – with one lender growing 42 times. The Bureau of Investigative Journalism.
- Jun.13.2013: The money pouring into a boom for consumer loans. Britain’s high street banks have put £millions into the industry. Many US companies have bought up UK companies, paying the UK founders £millions for their shareholdings. Criticism of the industry has focused on the level of interest charged, with some loans costing up to 4,474% in interest. The govt has rejected calls to cap the interest rates the firms can charge, claiming it would force people to turn to illegal loan sharks. Instead, the Office of Fair Trading is attempting to crack down by threatening to remove firms' licences if they fail to check whether customers can afford the loans or use aggressive debt collection tactics. Investors in the industry: US venture capitalist Don Valentine; Henry Angest, Everyday Loans; Adrian Beecroft, Wonga; Barclays (at one time); HSBC (Money in Advance Ltd); RBS (Amigo Loans Ltd, Money Shop); Lloyds TSB (Instant Cash Loans Ltd). US Dollar Finance (Money Shop, Express Finance, MEM Consumer Finance aka PayDay UK); Cash Choice UK Ltd; Cash America International Inc (CashEuroNetUK aka QuickQuid, Pounds To Pocket). The Bureau of Investigative Journalism.
- Jun.13.2013: The £1 billion high cost lending industry. David Cameron rejected calls for a cap on the interest rates the firms can charge borrowers. Office of Fair Trading, Stella Creasey MP, WageDayAdvance, CFO Lending, Wonga, Lending Stream, Wage Day Advance. The Bureau of Investigative Journalism.
- Mar.24.2018: Beware hidden fees eating away at your pension. Savers are losing £000s from their pensions through exorbitant investment charges on drawdown schemes. Analysis of the fees charged by pension fund platforms found that the industry was "letting consumers down" because of the big disparity in charges. The research, carried out by Which?, the consumer watchdog, found that some savers paid £12,000 more than others over 15 years. Campaigners have demanded that the platforms and pension companies that offer drawdown investment products (used by people who have withdrawn their pension pots in order to take an income) be more transparent about their fees, which are said to be "obscure and bewildering". They say that the biggest fees are being levelled by the larger, more established pension companies, suggesting that they are taking advantage of consumers' reluctance to shop around. Under the pension freedoms introduced by George Osborne in 2015, you can access your pension savings from the age of 55. You can take 25% as a tax-free lump sum, then you can leave the rest in your pension scheme, use it to buy an annuity, or invest it in a fund to provide you with an income (known as drawdown). The freedoms have been popular, with drawdown withdrawals reaching £15.3bn in 2016-17, according to the Financial Conduct Authority (FCA). However, the scale and variety of charges being levelled on drawdown products is a cause for concern. Which? says that some companies charge 5 or 5 fees each year with different names, making comparisons incredibly difficult. Which? is calling for transparency and comparability of charges. David Byers, The Times.
- Jan.2018: Average Financial Advisor Fees & Costs 2017-2018 Report: Understanding Advisory & Investment Management Fees For the past two years, AdvisoryHQ has been publishing its top rankings of the "Best Financial Advisors and Wealth Management Firms". Understanding how financial advisors are paid is critical when looking to engage the services of a financial advisory or investment management firm. As part of our research to identify top advisors and investment managers, we observed a tremendous level of consumer interest in finding average financial advisor fees and investment fees. AdvisoryHQ News.
- Aug.21.2017: Find out the Cost of Hiring a Financial Planner. Financial advisor fees vary. Some advisors charge fees in the form of commissions; others in the form of an hourly rate, or percentage of your account value. Here are the six most common ways financial advisors charge fees. Dana Anspach, The Balance.
- Jan.23.2014: Undercover Which? probe finds financial advisers charging £1,579 for investing help - but many play cagey on fees until they get you in. New rules meant to make financial advice a more transparent process are being derailed by advisers reluctant to tell customers how much they will charge upfront. Financial advisers play coy about fees until you go along to an initial hour-long meeting. All financial advisers must now charge upfront fees for their services after a massive clean-up of the industry, which banned them taking backdoor commission for selling products from Jan.2013. They could previously accept these kickbacks instead of making customers pay for their time, which gave people the misleading impression their advice was free. Tanya Jefferies, This is Money.
Alvarez & Marsal Holdings LLC
A&M works with companies, govts and entities across the industry spectrum to improve operational and financial performance. A&M’s primary services are corporate performance improvement, private equity services, restructuring & turnaround, tax, disputes and investigations, valuation and regulatory and risk advice.ref,ref Website.arch
A&M Capital Advisors LLC
A&M Capital Advisors is a private equity arm of Alvarez & Marsal Holdings LLC. The firm seeks to invest in middle-market companies with opportunities for operational improvements, business turnarounds, shareholder liquidity in minority or majority recapitalizations and ownership transitions, distressed, buyouts, acquisitions, growth capital, special situations, and corporate divestitures or carve-outs. The firm invests in companies which are undergoing a management transition or are seeking capital for growth or acquisitions and in companies that range from true underperformers in need of operational turnarounds to stronger performing businesses pursuing carve-outs, consolidation strategies or seeking to address specific operational issues or management needs.ref Website.arch, Website
A&M Capital Partners LP
A&M Capital Partners is a private equity fund operated by A&M Capital Advisers. A&M Capital Partners focuses on middle-market companies that are undergoing a management or ownership transition, seeking capital for growth or can benefit from access to world class operational expertise in the areas of corporate carve-outs, consolidation strategies, special situations or businesses seeking to address specific operational issues or management needs.ref Portfolio
A&M Capital Opportunities
A&M Capital Opportunities specializes in distressed and turnaround investments. The fund provides growth equity, acquisition capital, shareholder liquidity in minority or majority recapitalizations and ownership transitions. It invests in founder- or management-owned high growth middle-market companies. The fund invests in consumer & retail, light industrial, business services, and healthcare services companies in North America. Website, Portfolio
Analysis by Ernst & Young and British Venture Capital Association found that > 50% of profits generated by private equity firms were made by piling debt onto the books of their portfolio companies. The higher the amount of debt used to buy a company, the better the return in a successful investment. If a private equity firm buys a company for £50m in cash and sells it for £100m, it makes a return of 100%. If it uses £10m in cash and £40m in debt, then the returns are far higher.
Managerial capitalism: In the post-war decades, ownership of most listed companies was spread across a large number of investors, mostly private individuals who had neither the power nor the incentive to influence the firm's management. Senior executives had wide discretion in deciding how to allocate their company’s resources; some built large, unwieldy empires without much regard to the interests of shareholders. By the end of the 1970s, the ownership structure had changed. Financial institutions now held a larger proportion of the shares, and some took a close interest in the management of the firms in which they invested.
The Labour govts of the 1960s and 1970s had sought to create British-owned national champions in so-called strategic industries, but that policy was firmly rejected by Margaret Thatcher and, since the 1980s, no obstacles have been put in the way of foreign acquirers. Following the conversion of the Labour Party in the early 1990s to market-based economic policies, the general view across the political spectrum has been that inward investment in whatever form brings capital, technology and management into the UK, and strengthens the British economy.ref,p.28
The 1980s saw a wave of financial "innovation", most notably the "leveraged buy-out", a technique by which private equity firms use large amounts of debt to acquire unwanted subsidiaries of diversified corporations. As private equity firms acquired greater experience, they acquired entire companies in the same way. Here's an (infamous) example of how a leveraged buy-out works:ref,ref,ref
- 1992: PE firm Bain Capital bought Ampad Corporation from struggling Mead Corporation for $undisclosed with $5m of its own money, and borrowing the rest, which was put onto Ampaid's books. 7 out of 13 manufacturing facilities were "consolidated" (closed) with hundreds of jobs lost; other workers were fired and re-hired at lower wages. Bain charged Ampad $2m a year in management fees, plus additional fees for each acquisition. Bain/Ampad bought several "add-on" companies, borrowing heavily each time.
- 1995: Ampad paid Bain ~$7m in management fees, plus $60m in annual debt interest payments.
- 1996: Ampaid went public; Bain reaped $45-$50m by selling some of its shares, charging Ampaid $2m for arranging the IPO plus another $5m in management fees.
- 1999: Ampad's debt burden was ~$400m, sucking the life out of the company.
- Outcome: Ampad went bankrupt in Jan.2000; hundreds of workers lost their jobs; stockholders were left with worthless shares; creditors and vendors got less than 50¢ on $1; but Bain Capital and its investors made > $100m on a $5m investment.
In the UK, acquisitions by foreign companies are made easier by the fact that, in contrast to Germany and some other European countries, most British companies are owned by a wide spread of investors, mostly financial institutions, which have no long-term commitment to the business; if a bidder offers a high enough price, they are generally willing to sell. This is one of the institutional factors which underlies the restructuring that has taken place in British industry over the last 30+ years.
In contrast, for example in Germany, “firms are social institutions, not just networks of private contracts or the property of their shareholders“. In the so-called Rhineland model of capitalism, companies pursue growth rather than profitability, invest steadily in the development of new products and processes, provide stable employment for their workforce, and have strong obligations to the communities where their plants are located. The system has been modified in recent years as a result of the growing presence of foreign shareholders but Germany has moved only part of the way towards the Anglo-American model.ref, p.28
- Financial services § Other financial services, Private equity, Hedge fund, Activist shareholder, Equity (finance), Asset stripping ... Need a page on the recent practice of equity investors coming in and doing whatever they need to do in order to get the share price up, then exit, leaving a social shambles in their wake + the taxpayer picking up the bills.
- What do private equity firms do? https://www.ldc.co.uk/insights/private-equity/what-do-private-equity-firms-do
- What is a private equity firm? https://www.ldc.co.uk/insights/private-equity/what-is-a-private-equity-firm
- What is the difference between private equity and venture capital funding? https://www.ldc.co.uk/insights/private-equity/what-is-the-difference-between-private-equity-and-venture-capital-funding
- Private Equity Investment - The Common Misconceptions, https://www.ldc.co.uk/insights/private-equity/private-equity-investment-the-common-misconceptions
- DDG search
- See also article in IUF A Workers' Guide to Private Equity Buyouts. And there's another interesting + helpful article here, https://www.stockopedia.com/content/what-retail-investors-need-to-know-about-private-equity-177510/
- Private Offices / Private Investment Office: see eg. Boparan Holdings. Good FT article here.
- Oct.16.2018: The 6 Things A Private Equity Firm Will Do After They Buy Your Business, And they aren't things you would necessarily do. Jim Schleckser, '.
- May.20.2018: The casual dining crunch: why are Jamie’s Italian, Strada, Byron (and the rest) all struggling? Had the restaurant industry been expanding cautiously and financing itself from existing turnover, this situation would be tough. Instead, in recent years it has fuelled its expansion by gorging on cheap debt. It has grown fat and complacent and is now suffering the stomach cramps of falling sales. Quite how the restaurant world became so bloated is a moot point. Many blame a sudden gush of private equity money into food when it seemed it would be the leisure economy of the future. Private equity backers want to expand rapidly, then sell up while a brand is still buoyant, usually in a 3-to-5-year cycle. What Beckett will not accept, however, is that private equity is the bogeyman here (the private equity firm [Graphite Capital Management LLP Tony Naylor, The Guardian.
- Feb.25.2018: The New Shadow Banks: Private Equity Becomes Private Credit. ...these sort of activities kill the real economy by emphasizing profits over jobs and actual production facilities. Sebastian Canderle, Naked Capitalism. See also Shadow banking system.
- Winter.2012: Assessing Operating Teams and Capabilities Across Different Private Equity Models. This paper explores operational value creation in today’s private equity world and provides a framework for further discussion by providing: (i) a historical context for the development of operational value creation in private equity); (ii) a brief overview of what operational value creation means; (iii) perspectives on the tactics for driving operational value creation; (iv) context on the various operational models deployed; (v) an overview of the determinants for the different operating models; and (vi) recommendations to limited partners on how to assess an operations function in a PE firm. Strategic Resource Group, Tomas H Lee Partners.
Herald Investment Management Ltd
Herald Investment Trust, website, A/cs CH, Herald Investment Fund plc Bloomberg
The Herald Investment Trust specialises in achieving capital growth through investing in companies in the areas of technology, media and communications.
The Herald Worldwide Technology Fund is an Open Ended Investment Company which seeks to achieve capital growth, in excess of the average, by investing in quoted companies in the technology, communications and multi-media sectors.
Miton Group plc
Miton Group plc CH. Miton is a trading name of Miton Asset Management Ltd (reg. no.1949322) and Miton Trust Managers Limited (reg. no.220241) incorporated and registered in England and Wales.ref, ref, website
SK Capital Partners LP
Manhattan Partners LLC
Manhattan Partners is a private equity firm specializing in growth and special situation transactions. Manhattan Partners is based in Manhattan Beach, California with an additional office in New York. The firm operates through two investment vehicles:
- Manhattan Growth Partners: a growth stage investment vehicle specializing in expansion stage investments and acquisitions. It focuses on acquiring control positions.
- Manhattan Strategic Ventures: an opportunistic private equity vehicle pursuing investments for significant value appreciation. ref Website.arch,
- Dec.2010: USTC Holdings LLC,Forte Capital Advisors LLC and Manhattan Partners, acquired Xe Services LLC and its core operating subsidiaries.ref an investor consortium led by
Private Equity and PFI/PPP
Equitix Investment Management Ltd
Equitix Investment Management operates as an investment company, typically investing in projects in the UK with long-term revenue streams across the healthcare, education, leisure, social housing, government accommodation, highways and street lighting, offshore transmission, renewable and waste, and utility infrastructure sectors.ref
- Feb.2019: The Elizabeth Line: Equitix formed a consortium with Sumitomo Mitsui Banking Corporation's subsidiary, SMBC Leasing and Finance Inc to acquire 100% of the equity. Formerly known as Crossrail, the line is a new high-frequency, high-capacity railway service for London and the South East.ref
- Dec.2018: Thameslink trains: Equitix formed a consortium with Dalmore Capital Ltd to bid for a 33.33% stake in Cross London Trains from 3i Group plc § Infrastructure. Thameslink is one of the largest PPP schemes in the UK with around £7bn of capex for train manufacturing. The Secretary of State for Transport has underwritten all cash flows until 2035 by a Section 54 (Railways Act 1993) undertaking.ref
- Feb.2019: Firmus Gas Distribution Network: This project comprises the acquisition of Firmus Energy (Distribution) Ltd in Northern Ireland, a natural gas network that facilitates distribution from Northern Ireland’s National Transmission Network to end consumers.ref
- Sept.2017: High Speed 1: Equitix acquired a 35% stake in the flagship High Speed 1 rail infrastructure project. Equitix has formed a consortium with InfraRed Capital Partners (35%) and the National Pension Service (Korea) (30%). The concession runs for 23 years from financial close, expiring in 2040. The govt underwrites 90–95% of domestic revenues.ref
- Jan.2019: Papworth Hospital: An Equitix–Skanska joint venture was selected as preferred bidder in January 2014 for the construction of a specialist cardiothoracic hospital on the Cambridge Biomedical Campus site in Papworth. The project has since reached financial close and Equitix acquired the 50% stake held by Skanska in Mar.2019 following the completion of construction.ref
- Jan.2019: Onshore Wind: comprises the acquisition of two operational onshore wind farms, located in North Wales and Suffolk.ref
- Dec.2018: Crickhowell House: acquisition of the freehold interests in Crickhowell House, a modern 25-year-old office accommodation facility located in Cardiff Bay. The project has a remaining lease period of 13.25 years from the acquisition date.ref
- Oct.2018: John Laing Infrastructure Fund: a UK-listed (but Guernsey-registered) infrastructure investment company with a portfolio of 65 largely operational PPP projects. Equitix formed a consortium with Dalmore Capital Ltd (regno. 06849002, Ws) for the transaction and agreed to break up the Fund’s portfolio.ref The Equitix portfolio contains 35 PPP projects spread across: transport, social housing, street lighting, healthcare and govt accommodation. The portfolio provides predictable, govt-backed, inflation-linked income streams.ref
- Aug.2018: Durham University Student Accommodation: the project comprises the addition of two brand-new colleges with 992 rooms to supplement the university’s existing 16 colleges.ref
- Aug.2018: Energen Biogas: anaerobic digestion plant in Scotland. The plant was acquired with the title to the land, on an all-equity basis, with Helios Investment Partners LLP (Africa) providing half of the funding. Acquired via Bio Capital Ltd.ref
- Apr.2016: Agreed to provide financing for SIMEC Atlantis Energy Ltd's Scottish projects, with the intention of acquiring at least 25% of each project vehicle at financial close of that project.
- Oct.2014: Tetragon Financial Group Ltd acquired Equitix from Cabot Square Capital, subject to regulatory approval.ref Tetragon acquired an 85% stake, with a group from Equitix management holding the remainder.ref
- Jan.2007: Cabot Square Capital LLP (CH) to take advantage of the govt's PFI policies.ref,ref Website.arch
UP = Tetragon Financial Group Ltd (regno.43321), reg. Guernsey
- Pace Cayman Holdco Ltd (regno 00291493), reg. Cayman Islands
- Pace Topco Ltd, deveops and manages infrastructure concessions on behalf of fund investors. H [AR-2017, pp.2+34 re projects; p.39 re subsids.)
- Bio Capital Ltd,
- Equitix Investment Management Ltd, 6273020
- Equitix Ltd, 6026637, acts as a primary bidder or developer of a select number of infrastructure projects that the funds will have the exclusive ability, but not the obligation, to acquire.ref,ef
- Equitix GP 2 Ltd, ...
- Nov.21.2018: Equitex to Buy 25% Stake In Simec's Coal Conversion Plant. Equitix plans to buy a 25% stake in renewable energy project developer SIMEC Atlantis Energy Ltd’s 220 megawatts Uskmouth coal-to-waste-pellets conversion project in Wales. The waste-to-energy plant, once operational, will sell some of its electricity to an adjacent energy pellet processing facility at a fixed price, while the remainder will be exported to the grid, benefiting from an indexed floor price with potential upside from higher market prices. InvestSize.
Private Equity and Care
Lending Standards Board
The LSB is a self-regulatory body in the financial services industry. It publishes the voluntary Standards of Lending Practice, which set the benchmark for good lending practice in the UK, outlining the way registered firms are expected to deal with their customers throughout the entire product life cycle. There are separate Standards for personal customers and business customers, as well as other voluntary standards such as the Banking Standard.
There are 25 firms registered with the Board, plus 7 Debt Collection Agencies and Debt Purchase Firms, as of Dec.2018.ref.
Banking Standards Board
The BSB was born out of the parliamentary commission on banking standards in 2015, and was meant to be the industry’s answer to public outrage over the Libor-rigging scandal and widespread failings that contributed to the 2008 financial crisis.
BSB membership is voluntary; major US banks Goldman Sachs and JP Morgan and UK bank TSB are not registered with the body.
- Nov.3.08: Overhaul of UK's poor banking culture is slow, admits standards chair. Banking Standards Board tells MPs care for vulnerable customers continues to fall short. Little progress has been made on fixing the UK’s poor banking culture, five years on from a major industry inquiry meant to address lender misconduct, the chair of the sector’s standards board has admitted. In the Banking Standards Board’s first appearance in front of the treasury committee, Dame Colette Bowe and CEO Alison Cottrell were pressed on whether anything had changed since a 2013 parliamentary commission condemned a culture in which poor standards were often considered normal. Bowe told MPs: “The honest thing to say is that some progress was being made, but I think we would all – as we sit here in this room today – be foolish to go any further than that." Labour MP John Mann criticised the BSB for lacking the teeth that would hold members to account. Kalyeena Makortoff, The Guardian.
- May.20.2018: Still going strong at 117 — at least my mortgage will be. Most banks and building societies require borrowers to have paid off their mortgages by the time they are 75 or 80. However, a growing number of smaller banks and building societies have become more flexible. The trend has been encouraged by rule changes made in March by the Financial Conduct Authority. In effect, these reversed curbs on making interest-only loans to retired borrowers that were introduced just four years ago. The shake-up is partly a response to the growing number of people who are nearing the end of interest-only mortgages but are unable to pay off the debt, often because an endowment policy has not generated the amount required. They could be forced to sell their homes if they cannot come up with the money. Taking out a fresh interest-only loan gives them more time to find a solution. The shake-up is partly a response to the growing number of people who are nearing the end of interest-only mortgages but are unable to pay off the debt, often because an endowment policy has not generated the amount required. They could be forced to sell their homes if they cannot come up with the money. Taking out a fresh interest-only loan gives them more time to find a solution. Gifting by releasing equity in your home may be particularly valuable if your estate is worth more than £2m, because the residence nil-rate band tapers away from this point — dropping by £1 for every £2 over the threshold. However, bear in mind that this tactic could lead to you being refused state funding for care later in life, because it may be considered “deliberate deprivation of assets”. Later-life mortgages are generally more expensive than mainstream products, with the interest rates 0.5 to 1 percentage point higher. Ali Hussain, The Times.
- May.20.2018: Payments to 13,000 over pensions mis-selling. The full extent of the pensions mis-selling scandal is shown in figures from the Financial Services Compensation Scheme (FSCS) and the Financial Ombudsman Service (FOS). Thanks to the pension freedoms introduced in 2015, growing numbers have been tempted to move their pension pots out of defined benefit schemes into Sipps, which give greater freedom over where you can invest your money and how to take it out once you retire. This can expose them to risks they would not face if they had continued with their defined benefit pensions — also known as final salary or occupational pension schemes. Pensions Advisory Service, Baroness Ros Altmann. Ali Hussain, The Times.
- Jan.27.2018: US CFTC to fine UBS, Deutsche Bank, HSBC for spoofing, manipulation. The US derivatives regulator (Commodity Futures Trading Commission) is set to announce it has fined European lenders UBS, HSBC and Deutsche Bank $millions each for so-called "spoofing" and manipulation in the US futures market, three people with direct knowledge of the matter told Reuters. Reuters, Michelle Price
- Jan.26.2018: The truth about what goes on in the City behind closed doors. ...Investment management is a hidden part of the City ... The Telegraph, Bev Shah
- Oct.2010: How British Banks Are Complicit In Nigerian Corruption. Global Witness has found that Barclays, HSBC, RBS, NatWest and UBS held accounts for two former Nigerian state governors. These men funnelled dirty money into the UK, spending their ill-gotten gains on sustaining luxury lifestyles. This report examines in detail the roles played by the British banks which took money from these two corrupt politicians. The regulator, the Financial Services Authority (FSA) has never publically fined, or even named, any banks for taking corrupt funds, whether willingly or through negligence. The UK's Aid to poor countries has been ring-fenced against budget cuts. Meanwhile, banks - themselves propped up by taxpayer’s money - are getting away with practices that fundamentally undermine the effect of Aid. This is not just illogical, it is immoral; our financial system is morally complicit in corruption. Global Witness,