Navigating Market Dynamics with Marcus Stuttard, Head of AIM and UK Primary Markets at The London Stock Exchange

[00:00:00] Susannah de Jager: Welcome to Oxford Plus, the podcast series that takes you deep into the myths and truths of the Oxford investing landscape. I'm your host, Susannah de Jager and I've spent over 16 years in UK asset management.

Meet Marcus Stuttard: Head of AIM

[00:00:18] Susannah de Jager: Marcus Stuttard is head of AIM with responsibility for primary markets in the UK. AIM is the London Stock Exchange's market for small and medium sized businesses. Marcus has a particular focus on boosting access to finance for ambitious growth companies and sits on a number of industry and policy advisory bodies, including the Scale Up Institutes, Access to Finance and Growth Capital Committee, and the Institute of Directors Center for Corporate Governance Advisory Board. Among other things, we will be discussing the changes to the main market listing rules, one part of the broader overhaul of UK capital markets, on which our partner Mishcon de Reya is closely engaged, including responding to the Treasury's consultation on the proposed new private company's secondary trading platform, PISCES, which we will discuss later. I'm looking forward to hearing his views on the UK market and how small companies should view the listing opportunity in the UK. This is a key potential pathway for companies that are founded in Oxford and I look forward to hearing what AIM can offer and how the new rules are looking to adapt for current market needs.

Marcus, thank you so much for joining today.

[00:01:22] Marcus Stuttart: It's a pleasure. It's great to be here.

Understanding AIM and Market Reforms

[00:01:23] Susannah de Jager: Many of the changes to the rules are in what I would call key areas for small companies around share classes and notifications. I'd love you just to go briefly into some of those and what the goal is of those changes.

[00:01:39] Marcus Stuttart: So there's a huge package of regulatory reform going on in the UK at the moment, covering everything from pension fund reform to essentially a whole rewrite of the listing rules for the main market. From a main market perspective, at the end of July, the FCA introduced a whole new rule book and that was the result of Lord Hill's original review of the listing regime. Over a relatively short period of time, a lot of very key changes were made. They include things like the free float, so the number of shares that a company has to have that are available for people to buy, those requirements went from 25 percent free float to 10%. It's now possible to have dual class shares for founders and for original investors. On an ongoing basis, there are things called the class tests, which are tests about the size of transactions and historically, they were quite prescriptive and they caused companies to have to do very expensive documentation and consult shareholders if they were doing significant transactions. There are some really key changes which are designed to do a number of things. They are designed to make it easier for companies to transition from private to public and for that transition to be just a bit more seamless. So things like dual class shares, you know, we've heard for years that founders, as they are building the relationship over, you know, an extended period of time after their sort of first half year results, annual results, et cetera, they want some protection as new investors are coming onto the register. So it just makes that transition a bit more seamless. Things like free float, we heard for many years, and this is specifically for the main market, because on a more growth market, we don't have the same sort of prescriptive requirements, but we've heard from companies for many years that having a 25 percent threshold essentially meant that during the IPO process, a company needed to sell a quarter of its business and depending on the business, where it is in its stage of development, that the wider market cycle. actually having that level publicly out there that a quarter of the shares have to be sold can really add to risk. all of these changes are just designed to make it easier for companies to transition from public to private and then once they are public, to be able to get the most out of the market and to be able to compete effectively with markets on other globally listed markets and against private companies that have private equity ownership, for example.

[00:04:21] Susannah de Jager: Thank you, that's very clear. You touched upon 10 percent free float being that much more easy to achieve and not having this kind of threshold where it's very visible what you're aiming for and potentially quite aggressive. But by contrast to Nasdaq, which obviously there's often a comparison, was that AIM specifically has a very notable benefit of you don't have to go public ages in advance if you are planning a listing and that you can do market sounding in quite a quiet, gentle way and even just 10 days before you can announce your intention, whereas in Nasdaq it would be 12, 18 months out. That's such a huge benefit to be able to quietly sound, but not one I had heard widely publicised and I'd love to hear a bit more from you about that particular side of things, because I don't think that's well understood.

The UK Funding Continuum and Pisces

[00:05:11] Marcus Stuttart: That's right, almost important to take a step back. What we're trying to do in the UK is build a whole funding continuum from the seed stage, through the BC rounds and we're currently working with government to develop a crossover market called Pisces and then from a public markets perspective, we are one of the few stock exchanges or market operators that has been committed to operate a range of different markets for many, many years and the two core markets that we operate are AIM, our growth market, and then we talked a little bit earlier about the main market, which is, overseen, fully regulated by the FCA. One of the reasons that we've chosen to operate AIM as a growth market, distinct from the main market, is it enables us to tailor the regulation. So, AIM has always been written with very plain English rules so that, whether you're an investor, you're a company that's on the market, or you're a prospective company that's thinking about coming to the market, you can pick up the rule book and you know what's expected of you and so, we have much less prescriptive rules, but we have this system with what we call the Nominated Advisor at the core and the nominated advisor or the nomad is an investment bank, quite often the sort of smaller mid tier investment banks that we licensed to carry out the role and they then work with the company as it's preparing for IPO and they support the company once it's submitted to the market so that the company knows what it needs to do to comply with the rules both as IPO and on an ongoing basis. because we have less prescriptive rules in areas like free float, for example, that you were talking about earlier, we are able to say, well, look, the Nomad should look at the overall eligibility of a company and take into account free float as one of those considerations. So the whole market is operated, distinctly from the main market and so things like the admission process is, you know, whilst the high level process is the same. There are some key differences. One of which is that, you don't have public documents lodged with a third party regulator for review and those documents aren't then out there in the market, sort of publicly and so for the company coming to the market, they've got a lot more control over timing and when they want to sort of break cover, some companies will do so quite early on in order to build demand and to sort of just build the brand visibility or recognition. Other companies will sort of leave it until the last moment until they know that they've got a book of demand built and that there is investor support and so they feel like they're taking less risk. So it's a much more tailored market for smaller growing companies.

[00:08:14] Susannah de Jager: Yeah, that makes a lot of sense. Something that, again, has come up in discussions I've had is, obviously it's a massive benefit to have some flexibility around the rules. On the other hand, and I heard this anecdotally the other day, it can mean that you're not Nomad necessarily, but the other service providers, so accountants and lawyers feel a need to really gold plate everything that they're doing because there isn't a one size fits all, this is the document you need to put out. Have you heard that at all before?

[00:08:45] Marcus Stuttart: Not specific to AIM. I think we've been through a number of decades and particularly I think since the financial crisis, we've been through a period where, there have been rules that were written with all of the right intentions and then they've gradually just been incrementally layered one on top of the other and so I think the really important thing about this current review that's going. through is that there's been a really grown up conversation about, let's not try and operate, you know, academically the most perfect markets that nobody wants to use. We've got to be really considered about which rules genuinely add value because they they increase disclosure that investors actually need to make their investment decisions. We were talking earlier about dual class shares on the main market. That's been an area for many years where the dialogue was very polarised where investors would say, this is a key reason why we invest in London because we've got more protection, there isn't the same availability of dual class shares as in other markets and some investors were really quite forcibly saying, we really want those rights and protections to be retained. But then when you actually looked at their portfolio, you realise that they're invested in companies on other markets where they don't have their protection. So this sort of last three or four years has been a great opportunity to really stand back and say, what are the things that are really important and which are those rules and areas that aren't really serving any value, they're not meaning that Investors are investing more, they're not increasing the capital available to companies or liquidity or valuation and if they don't serve a purpose, let's really think about removing them.

[00:10:45] Susannah de Jager: You're making me smile because you've highlighted something there, that you're not just dealing with differences of opinion you're dealing with not necessarily intentionally but a sort of a mismatch between what people will say and how they actually behave and having to identify where the truth of it lies. I feel like we've all experienced that.

[00:11:02] Marcus Stuttart: Well, that's right and also, I think, you know, one of the things that's really clear is that, financial markets globally over the years have just become more and more complicated and as rules have been developed, additional sort of layers of infrastructure have been put in place. So one of the areas that's under review at the moment by the FRC is the stewardship code and there's been a lot of debate about the importance of fund managers actually being part of the voting process rather than that being outsourced to proxy agencies or internal governance teams, so that there's a real link between the people who are actually investing the capital and the feedback that they can provide to the companies and the boards and to reduce some of those intermediate layers and costs.

[00:11:51] Susannah de Jager: Yeah. Before we move on, because you've referenced it and I think it would be really important to hear a bit more about it, I'd love to hear a bit more about Pisces and that crossover and where it's up to, what the vision is for it and how you hope it will operate.

[00:12:05] Marcus Stuttart: I actually feel really privileged in my role, so I head up the UK primary markets team at the London Stock Exchange and I've got a regional team and we spend all of our time talking to both our existing listed and AIM companies, but also at least 50 percent of our time talking to private companies and I can't tell you how many times over the years, we have been talking to a company that looks like it could be a really good long term IPO prospect. You know, it's an exciting business, you could see how it could continue to grow and then they decide that actually they can't wait or it's not the right time to IPO and it gets sold too early and one of the reasons for that sale is quite often that there's been an overriding need to provide liquidity either to early stage investors, to the management team, to employees and we've been talking to the government for the last two or three years about the development of this whole new sort of regulatory infrastructure that's been labeled Pisces that will allow market operators like the London Stock Exchange to operate markets for private companies. So a company won't need to become a PLC, it can stay private, but it will have periodic access to liquidity. The company would choose how frequently it wants to be traded, say that could be quarterly, half yearly. They will make disclosures prior to that trading event happening, so that potential investors are informed about the prospects of the business. Then there'll be an auction for a day and then after that auction the company will go back to being private. it's a really important component of that overall sort of funding and liquidity continuum that will help companies to have access to liquidity and to enable early stage investors and employees to have access and the ability to sell shares. It will also mean that it will make it easier for a whole class of investors, whether that's high net worth individuals, family offices, institutional investors to be able to access private companies directly in a way that they can't currently. So you know, we think it will be a world first in many ways because whilst there are platforms out there globally, none of them have been designed with the company at the center with the company being able to control the information flow and the sort of the pricing parameters for an auction.

[00:14:33] Susannah de Jager: It's really exciting.

[00:14:34] Marcus Stuttart: Really exciting.

[00:14:35] Susannah de Jager: I have absolutely heard that problem statement outlined of how often the trajectory that a company will be on ends up being defined by factors that in an ideal world just shouldn't be the primary motivators and you can understand it if somebody's been maybe working on a piece of IP for 15 years and you know, haven't seen anything off the table yet, it can just be the necessity, but I'm really pleased that you've designed something and I hope it goes really well.

[00:15:02] Marcus Stuttart: The thing in the UK is that we have got some incredible innovation, we've got some of the top universities in the world, we've got very high levels of scaling businesses, over 30,000 scaling businesses in the UK. We've got one of the world's most developed financial markets and infrastructures. We've got the world's second largest pension fund industries We've got the ideas, the innovation, the companies, the entrepreneurs and the capital and so all we need to do is just bring those components together and Pisces is part of that and what we're trying to just make sure is that from startup through scaling, that companies can scale, they can grow and they can stay in the UK and not feel like they've either got to be sold early or they've got to move outside of the UK to get the access to capital.

[00:15:55] Susannah de Jager: What's the planned launch date for Pisces?

[00:15:58] Marcus Stuttart: The Treasury launched a consultation earlier this year, and actually we got really, the Treasury got really good market feedback, and so they're currently working through all of those responses, particularly in areas like the amount of disclosure companies will have to make and we are waiting for them to sort of confirm launch, but I would say probably towards the middle of next year.

[00:16:22] Susannah de Jager: Exciting.

Liquidity and Market Comparisons

[00:16:23] Susannah de Jager: you've brought us naturally on to the next bit of the conversation that I was hoping to cover with you, which is liquidity depth of the market and is it a bit overdone, the fact that the UK market doesn't have as much volume? And I'd love to get your takeaway at the moment on how you see the market, you know, how liquidity is functioning, does it need to be improved? Is it fine? How do you see it comparing to other markets? And every other question in between. Go for it, Marcus!

[00:16:52] Marcus Stuttart: Liquidity is one of those topics that means different things to different people and I think particularly in sort of small caps, you know, people always want more liquidity. I'll always remember, and this is going back quite a long time, again actually, doing a marketing roadshow across Europe and we were in Frankfurt and I'd done a pitch, and a nomad had, and a broker, and a law firm, we'd all sort of set out the stall for AIM in particular, but for London and the first question came from a chap at the back of the room, his company admitted to the local growth market, and he'd done the analysis, and he believed that there was more liquidity in Frankfurt than there would be in London. At which point I thought he'd just been put in there by a competitor to set the tone for the questions. He then went on to say that actually he was moving his quote to AIM because whilst he had lots of liquidity, when he went to try and raise capital, those investors were sort of individual investors and they weren't as, either able or interested in providing long term capital and that's just a sort of an illustration of how on one level he had more liquidity, but the market wasn't serving the purpose he wanted it to. So that's a long way of saying it's really important that we've got a real range of investors that can both provide long liquidity and a big part of the current regulatory reform agenda is to try and make sure that we've got both. Some of the headlines that we've seen, though, over recent years that other markets, the UK in particular, people feel is either more liquid or creates higher valuations, the data just doesn't back that up. I mean, first of all, on, let's just take performance, there have been 20 UK companies over the last decade that have listed on either New York Stock Exchange or Nasdaq and raised over 100 million pounds. So you strip out some of the sort of tiny cash shells and SPACs, so companies of consequence. Out of those 20, only four are above their IPO price, including, ARM which obviously listed recently. Eight are delisted and of the other nine, the average performance, when I last looked at it, was that they were 80 percent under their IPO price. So this sort of notion or perception that you automatically get more liquidity and a higher valuation on a different market, it's just not true. The data sort of shows that, and then, people like UBS have done analysis that show, you know, across different sectors, actually, you quite often find that the valuation in London is the same, if not higher in some sectors, when you actually look at genuine peer group companies with the same sort of revenue growth rates and, you know, sort of similar size. If you then look at liquidity, it becomes a little bit more complicated because I think we have definitely seen examples where either commentators just take an aggregate of the total liquidity of say the S& P 500, a major index. So it's got lots of large companies and 500 companies, and they compare that to the average liquidity of the FTSE 100 and it gives you just, you're not comparing apples with apples. So some of that commentary is just a bit too superficial. If you then look at a sort of, on a company by company level. Sometimes you find this analysis is only taking into account part of the liquidity that's available. So in any given day between, I guess, 30 and 50 percent, sometimes higher, sometimes lower, of the actual liquidity in a company's stock will go centrally through the London Stock Exchange. The rest of it will go through a variety of different platforms, but quite often, you can demonstrate the link that without that central liquidity, that other trading wouldn't take place and so it's important to look at the whole depth of the market and whilst that can sound sort of quite technical, I think it's just another example of sometimes the sort of slightly superficial commentary that we've seen, but when you look at sort of the proper liquidity that's available to companies and you know, you look at peer groups by size and sector, you find that it's often very similar in London, if not higher than other markets.

[00:21:31] Susannah de Jager: And so are you now feeling that these messages are getting through? Because it does feel like the mood music has shifted a bit. There have been some more listings, but also some more high profile kind of potential listings and to me, it feels like it's shifting a bit.

[00:21:47] Marcus Stuttart: There's been a marked shift this year in sentiment and I know we've spent the last few minutes just talking about the UK and the London capital markets, but let's not forget that some of the trends that we've seen in the UK over the last two years have been global trends. They've been the same headwinds, supply chain issues. Higher interest rates, higher inflation globally that have affected public and private markets. So again, this isn't just sort of specific to the public markets. We've seen more capital raised in London this year in the first half than in the whole of the UK. Of last year. So there has been an increase in activity. We've also seen some really significant deals, particularly on the main market, like, national grid, 7 billion pound rights issue, which it really demonstrates the depth of the market. We've also seen some big sell downs in stock, like Pfizer, doing a big sell down in Haley and stock at two and a half billion pounds worth and that's important for a number of reasons. A, it shows the capital or the, you know, the money is available. It also shows that there is a willingness and a depth of market for that secondary activity. There are other markets around the world that are very effective at point of IPO, but they don't have that long term depth and so, you know, if you're a private equity house for example, thinking about floating one of your portfolio companies, you've always be thinking not just about the IPO, but also how easy is it to. Post IPO to continue to sell down stock. So I think there have been some really strong indicators already this year and out of the IPOs, if I just think about AIM, of the first five IPOs onto AIM, three of those were US companies. So despite the narrative that, you know, it's UK companies going to the US, in the small and mid cap space, US companies are absolutely recognising the benefit of the small cap market, in the UK.

[00:23:59] Susannah de Jager: And that's such positive mood music for you, because it really is the opposite of what people tend to generically say and you and I were talking about people sort of repeat these same things all the time and often they're not very carefully interrogated. But that, I think, would surprise most people listening.

[00:24:16] Marcus Stuttart: That's right, yeah. I mean, including healthcare businesses and the performance of those three companies, you one of them is up over a hundred percent, another is up over 70 percent since the IPA. So they've had really good aftermarket performance as well.

[00:24:28] Susannah de Jager: Yeah, very promising. Given the conversation we've been having around liquidity, one of the things that's clearly under discussion is a kind of amendment to some of the rules that were MIFID II, which were in some cases considered very onerous and the reporting very high. For those listening, MIFID II was primarily focused on what was called the unbundling of payments for broker research, which is, as it sounds, literally the research you get on a company to help inform a buy or sell decision. Historically, that was part of the commission for a trade and the unbundling was literally that, you could only pay for the execution. So the trade being carried out and the research had to effectively come out of your own pocket, which I had to do this as a CEO of a investment house and it was mind blowingly complicated and put us at a huge disadvantage and we've already spoken about some of those things that are different from other markets and put us in a massive disadvantage in particular against US and now it's looking to roll back and I'd love to hear an update on that from you.

[00:25:34] Marcus Stuttart: Yeah, so a couple of things to say, I think. I mean, obviously, Rachel Kent did a whole review of the equity research landscape and came up with a number of recommendations, including, as you say, you winding back some of the MIFID II provisions to make it easier for investors to have choice around the way that they pay for research. Yeah, we talked a little bit earlier about this sort of undue focus on cost and I think this is another one of those examples where just focusing on costs can have some sort of adverse impacts. For me, I think it is important that investors have flexibility around the way that they pay for research. But I think there's also a debate to be had about just the availability of research, because, you know, even pre MIFID II, where research was being produced, I don't think it's ever been distributed as widely as it could or should have been and research is a really important part of the information flow for any capital market and it's been really difficult, particularly for individual investors to get access to some of that research. So Rachel Kent made a number of suggestions around things, for example about having a portal that was set up to make it easier for undercovered, particularly smaller companies, to be able to get more research written and for that research to be distributed a lot more widely, not just to institutional investors, but to retail as well. So I think there's clearly still work to be done. The FCA have kind of consulted on some of the recommendations and we're seeing some very positive change in some areas. But I think the broader point is that, as I've already said, just focusing on cost, it isn't the right way to look at some of these issues, but also it's really important that we've got a real diversity of investors in the market. The institutions are vital for providing that very deep pool of long term capital. But it's also really important that individuals have access to the market and the information to make investment decisions so that they understand the different companies that are available in different sectors and that they're not either discouraged or pushed out of the market because That will help to make the link for a lot of individuals between the health of the economy in different sectors and their own personal wealth. But also, individuals are a really important source not only of capital and we saw that particularly during the pandemic, but also a really important source of daily liquidity as well, so it's really important that retail are included, both from a research perspective, but also we've got the current review of the whole prospectus regime that the FCA are currently consulting on, which should have some really positive impact, particularly for smaller companies, so for AIM companies, they'll be able to use their AIM admission documents to do a full sort of retail offer going forward. So I think a lot of these things are really inextricably linked and the really positive thing is that I think we are probably the one jurisdiction anywhere in the world at the moment that is having such a comprehensive review of all of these interlinked components. So it makes me feel very positive actually about the future.

The Role of Pension Funds in UK Markets

[00:28:59] Susannah de Jager: So, sort of having taken that recalibrating of the picture and that it's actually rather positive, another factor that gets laboured a lot in the UK a lot of news around is that scale up capital. We touched upon UK pensions what we haven't said explicitly is obviously the mansion house compact and the promise of defined contribution pension plans to put 5 percent into UK unlisted, but also into any kind of infrastructure. You know, how do you see that impacting the market further from your perspective?

[00:29:35] Marcus Stuttart: First of all, there has been a sell down by UK pension funds over the last 25 years, 25 years ago. over half of UK pensions were invested in equities. That's now down, yeah, that's now down to about four and a half percent.

[00:29:58] Susannah de Jager: I've heard even lower numbers, but...

[00:30:00] Marcus Stuttart: Yeah, so, there's a structural issue there. Yeah, there's no skirting around that and whilst there are multiple reasons for that, and also it's important, you know, not just to look in aggregate, but to break that down in terms of DB, DC, local authority pensions, recognising that the exposure in DB pensions will be lower than growing DC funds. UK pension funds, despite all of that, are still under invested compared to global peers on any measure. So, it's really important that we increase that percentage exposure to equities and yeah, there are multiple both reasons and factors behind that. First of all, we're not short of opportunities in the UK and in a way, the sad thing is that UK institutions, UK private equity, Asian family offices, they've all seen the opportunity in the UK and have been investing here. So it's not that the opportunities don't exist. It's just that, a combination of structural issues, regulation, accounting issues have caused this depletion of equity capital and pension funds to UK equities. But we're starting to see a real recognition that's a problem, and I think the Mansion House Compact it's the first sort of voluntary step by now, 11 funds to commit, up to 5 percent of their funds by 2030 to private companies, but that, that would include companies admitted to growth markets like AIM. So there's a recognition of the need and the opportunity and you know, there is increasing recognition that the broader pension fund industry, given that something like £60 billion of taxpayer support goes into pensions every year, that investment by the UK should deliver greater dividends for the UK and there should be a greater nexus. So I think, you know, we're still at the start of that journey. But there's a huge opportunity there and I think the first step was actually just getting some data and some clarity on the extent of the problem, because I think, you know, for the last five plus years, people have recognised that it's an issue, but everyone had different versions of the truth. So I think now people understand the extent of the problem and the scale of the opportunity. We will start to see some change, whether that's either voluntarily or through regulation. We've seen the government already launch a review of pension funds and this is an area that's clearly in focus. You know, we saw the publication of The Capital Markets of Tomorrow report at the end of last week and there are other pieces of research coming out soon that sort of highlight the extent of the problem but also the opportunity.

[00:33:03] Susannah de Jager: And I think it's a really interesting point because the opportunity is really well demonstrated by Canadian pension plans would be the obvious one. They have the scale to invest in a broad, diversified portfolio of high risk investments, but therefore their risk is mitigated by that breadth and as you pointed out, the structural issues in the UK have made that more difficult, but there's an opportunity that I sometimes feel is not as understood by the man or woman on the street whose pension is actually being invested on their behalf, which is a lot of these companies or technologies that we might be investing our money in, even if it's indirectly, are they going to move the needle on some of the most important issues to people you might stop and speak to, whether it be climate change, energy security, whether it be food security, and just a raft of amazing health technologies that are coming out as well. The list is endless of amazing and fun technologies and I think that's really underplayed of the fact that we've gone so safe and for kind of slightly strange structural reasons that we're not just not making optimal returns and more important for defined contribution obviously than defined benefit, but we're also not funding things that we might.

[00:34:22] Marcus Stuttart: That's right and look, as you were saying that, I was just thinking, already today we've sort of gone into the sort of the quite technical sort of sides of capital markets, but for a lot of people who will never be close and nor should they be close to the ins and outs of capital markets, there's a much more fundamental point about, the importance of these companies, not just for creating great research and IP, but also, high quality, well paying jobs and that link between, companies and high quality employment and people having enough for, saved for their retirement, you know, it is well recognised that as a country, we are not saving enough for our retirement and as people continue to, or health systems improve and people live longer, we're going to need more for our retirement and so we need to be focusing not on the cost of our savings products, but actually how much are they going to return us for the longterm.

[00:35:29] Susannah de Jager: Yeah and I think that you've struck upon something that some people would be familiar with, but there's huge downward pressure on fees being such a front and center and there are valid reasons for that. There has been a sense that over the years, perhaps people have overcharged fees for the products that they were providing, but now it seems to have swung too far as often these things do when rebalancing and the value for money argument should be front and centre. I've always been blown away because all performance is net of fees, ultimately.

[00:36:00] Marcus Stuttart: That's right. But also people need to be more interested in where their savings and their pension is invested. You, the point that you made earlier, I'm sure a very, very small proportion of people would know actually where their pension was invested and they would be shocked if they thought that, you know, less than five percent was invested in the UK. I'm sure most people think the majority of their pension pot is actually invested in the UK.

[00:36:33] Susannah de Jager: And to that end, do you think that the current government should be looking more seriously at incentives? The UKISA, is that something that you support from your perspective?

[00:36:44] Marcus Stuttart: I think the link between, whether it's, sort of tax incentives or regulation, but I think particularly, tax incentives where taxpayer's money is being deployed, there should be a much greater link between UK PLC. and where that money's being invested. take Stamp Duty for example. It's just not right that if somebody wants to buy shares in Aston Martin, they pay Stamp Duty, say, half a percent. Whereas if they want to buy shares in Tesla or Porsche, they're not charged that tax. Similarly, some of the incentives like EIS, VCTs, or pension tax credits. I think if taxpayers money is going in, there should be a much greater nexus between where that money is invested. I think there's a debate to be had in terms of sort of pension funds and allocation and whether there should be mandatory limits, or not, or whether the industry just moves towards investing more in the UK.

[00:37:49] Susannah de Jager: Very, very interesting and clearly we've spoken about the intent of the Mansion House Compact. Have you seen anything meaningful between a kind of concert of those main signatories? Because what I've seen so far is kind of piecemeal, couple of people hooking up and it feels like something, that bigger scale needs to come together.

[00:38:13] Marcus Stuttart: Yeah and it's a point that's being raised increasingly. I think the Mansion House Compact, you know, is a really important initiative and it was very warmly welcomed when it was announced. Inevitably it's going to take time for the signatories of that compact to gear up internally, make sure that they've got the right, internal processes, systems and I think we are starting to see that happen. I think maybe slightly naively people's expectation was that the day after the mansion house, the people would start to see that money flowing and that's clearly not happened, but I think we are starting to see, some important steps and you know, I know talking to, some fund managers that they are engaging with the signatories of the compact and we're starting to see the positive impact.

[00:39:07] Susannah de Jager: I'm pleased to hear that.

Conclusion and Future Outlook

[00:39:09] Susannah de Jager: Wonderful. Well, I think that's probably a great place to leave it. I mean, you've made me feel very positive about it too. So, I look forward to seeing some of these things bear fruit and all the best with them.

[00:39:19] Marcus Stuttart: Great, thank you. It's been really good to catch up!

[00:39:22] Susannah de Jager: Wonderful. Thanks for listening to this episode of Oxford+ presented by me, Susannah de Jager. If you want to stay up to date with all things Oxford+, please visit our website, OxfordPlus. co. uk and sign up to our newsletter so you never miss an update. Oxford+ was made in partnership with Mishcon de Reya and is produced and edited by Story Ninety Four.