Rachel Reeves cosies up to private equity
Chancellor tells BVCA Summit reform of regulators and pensions landscape are crucial to driving economic growth
Hello Rainmakers,
A bonus post for you today, free to everyone.
The Chancellor was at the BVCA summit today giving several words of encouragement on some key policy asks around pension fund rules, regulation, but strangely she wasn’t asked specifically about carried interest.
With her second Budget scheduled for the 26th November, speculation is likely to be feverish again, and we will cover the commentary around this.
Speaking at the British Private Equity and Venture Capital Association’s (BVCA) annual Summit, attended by over 1000 delegates from the private capital industry, Chancellor Rachel Reeves reaffirmed the Government’s commitment to economic growth and the importance of the role played by the private capital industry in achieving that goal.
Whilst in conversation with the BVCA’s Chief Executive Michael Moore, Rachel Reeves stated that: “Government alone is not going to get economic growth. You can only get growth if you’ve got investment, productivity improvements and people are choosing to take on workers. And that's where your industry, private equity and venture capital comes in, because some of the fastest growing businesses are PE backed, VC backed businesses, I want to do what I can as Chancellor.”
Asked how important international competitiveness is for the Government, the Chancellor said: “All of your businesses have a choice where to invest, whether to choose Britain or to invest elsewhere. I would say one of the things that marks us apart is the stability that we are able to offer…”
When discussing her approach to the UK’s regulators, the Chancellor highlighted: “I want to take out more regulators. We’ve still got too many. We're leading the way at Treasury, where we've got rid of the payment systems regulator. We are severely constraining the financial ombudsman, which I think is very important. They are not a regulator, they’re supposed to be a resolver of complaints, but their role has grown much too much, and that's why we are constraining it.
“I think the regulatory reforms are very welcome and will make it easier to do business.”
On pensions landscape reform, Rachel Reeves said: “There are 86 different administering authorities we have at the moment, for the Local Government Pension Scheme and we're going to go to eight pools…
“That will create some of the biggest pension funds in the world. At the moment… I'm more likely to have a meeting with one of the Canadian Teachers pension funds than I am with one of our local government pension funds because they've got the scale to invest…
“We often blame the pension funds, but obviously their customer is usually the big employer who will make a decision about what their employees are invested in. So, there's a big piece of work as well when we're driving the value for money, not just lowest cost investments…
“In that review about how to make Britain the best place to start up and scale up a business, one of the recommendations that Jim [O’Neill] and Alex [Depledge] made was having a Tibi style scheme, what the French have, and I think your Nova scheme very much builds on that. So again, you're knocking on an open door there, you know, we're looking at your proposals…We’re backing you.”
When discussing the Government’s approach to tax and the private capital industry she stated that: “I do recognise that tax policy does impact economic growth… One of the reasons why taxes have risen to such a high level is because there’s been such poor growth and such low levels of investment and such a deterioration in our productivity performance, both compared to the past, but also compared with other countries.
“I’m determined to drive those things up, and that is why growth continues to be the number one mission of this government and tax policy also needs to reflect that mission."
The Chancellor’s comments follow on from new data released by the BVCA this morning which showed that private capital investors believe the UK remains an attractive place to invest. Four in ten (39%) of those surveyed by the BVCA ahead of its annual Summit view the UK as a good or excellent place to build a business compared to just one in five (20%) who state the UK is not an attractive investment destination.
A balance of investors expects to increase their investment in the UK in the coming five years, with 29% likely to invest more compared to 20% who expect to reduce their investment.
Commenting, BVCA Chief Executive Michael Moore said: “AI and life sciences can be a driver of a tech wave that sits at the heart of the UK’s future economic growth. Getting pension capital to support these opportunities is critical. It is therefore hugely welcome that the Chancellor recognised the urgency of getting UK pension funds investing in private capital.
“The Chancellor was clear in her comments about the importance of the private capital industry in driving economic growth, backing some of the fastest growing businesses in the UK. By stating her ambition to streamline regulators, she shows that she understands some of the barriers to investment faced by our industry.”
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We are hosting Rainmakers Lunches soon, an opportunity to network with leaders from the corporate finance sector.
These events will bring together the region’s Rainmaker community to discuss the deals market in 2025 and celebrate your successes over the last 12 months.
We will be joined by our Rainmaker of the Year in each city.
Joining us in Leeds on the 23rd of September will be Rainmaker of the Year – Paul Mann, partner in the corporate team and head of the private equity team in the UK at Squire Patton Boggs.
Also attending is the Changemaker of Year, Alexandra Fogel, partner and head of private north at EY, who scooped the award at our Rainmakers awards in June.
Chris Handy, who is Partner and Head of West Midlands for LDC, alongside him we will have Richard Swann from Inflexion, who won our Changemaker of the Year award. on the 2nd of October.
Also on the 2nd of October in Manchester we have Rainmaker of the Year – Michael Loudon, partner and head of the North West at Clearwater.
Alongside him will be our Changemaker of Year, Greg Holmes, from Palatine, who scooped the award at our Rainmakers awards in June.
Also providing insights will be Claire Alvarez of private equity firm Foresight, who won the finance leader category at the Leadership Awards 2024 and shortlisted for Rainmaker of the year.
Laura Wiggins, our Rising Star, will be on maternity leave and we send her our very best wishes.
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