11 July 2017 | Issue 24
Market corner

by Ghillie Little
Head of Corporate Consulting, SBC London
Combining business with pleasure – Impact investing is by no means a new phenomenon. Interest in sustainable and impact investing has been notably drifting towards mainstream investing for quite some time, with companies like UBS looking to target millennials who have yet, for several reasons, to fully embrace the investment world, and seek personalised wealth platforms. This week UBS Wealth Management announced it raised the largest investment - $325 million - for The Rise Fund, a $2 billion vehicle managed by TPG Growth that seeks social and environmental progress while simultaneously delivering competitive returns. Impact investing has yet to become an investment investors trust to deliver competitive returns and positive social and environment outcomes. Definitely a mission-driven investment to watch.
[Editor's notes – written by a former UBS Wealth Management strategist.]

Battle of the billionaires – Berkshire Hathaway has made a $9 billion cash bid for utility operator, Energy Future Holdings, and Paul Singer/Elliott Management, the largest creditor of the energy operator, is threatening to make his own takeover bid. A clash of personalities indeed – a well-known activist investor verses a legendary investor. Whether Singer’s Elliott Management is merely looking to squeeze a bit more cash out of Berkshire Hathaway is not clear.
No plus one – Teen retailer Abercrombie & Fitch put out all the feelers and didn’t get the attention it was looking for. Abercrombie announced on Monday that it was ending sales talks after failing to agree terms with several potential buyers, and would now look internally for a strategy to reinvigorate the brand and reverse years of declining revenue. Cue 20% share fall.
Several retailers like Abercrombie have been struggling due to the rise of ecommerce, which has driven M&A activity. As with any M&A deal, combining forces with others in the retail space pools companies’ resources, enabling them, among many things, to develop a stronger digital offering and cut costs that can be reinvested into new growth strategies. Abercrombie used to get away with the perfume and loud music sales tactic, this time they will need a more dexterous strategy.

A Ripple in the central banking waters – The Bank of England has successfully tested an “interledger” programme developed by Ripple, a blockchain specialist, to seamlessly synchronise a payment between two central banks’ systems. Not on the immediate horizon, but a step towards a payment system for the future.

Who's having a good week?

Gilles Müller

...a Manic Monday success!

Corridors of power

by Louis Rynsard
Director, Reputation & Strategy, SBC London

A story I can't believe I have to write

By now I assume most, if not all, have seen the words that one MP uttered this week. It stretches believability that, in 2017, we have a member of our legislature using language that should have been confined to history. But Anne Marie Morris did.
Leaving aside what was actually said, the fact that her apology was for “any offence caused” and her excuse that it was an accident makes this all that much worse. This is a woman who lives, during the week at least, in London; she is an intelligent person by all accounts, has presumably heard of the slave trade, and is at least aware of the existence of people of ethnicities other than White Anglo Saxon Protestant.

To have that phrase in her everyday lexicon and not to realise how awful that is should disqualify her from office. That, as they say, is that.

The French are coming

One day after his Prime Minister announced tax reform to lure UK business leaders to France, Emmanuel Macron has announced the appointment of his political mentor, Jean-Pierre Jouyet, as his choice for French Ambassador to the UK. 

While Macron may be the best, biggest hope for holding back the tides of nationalism, protectionism and hatred in Europe, and even the world, he also represents the greatest risk to London and the UK in a post-Brexit world.

The solution is simple: If France is trying to steal the UK’s companies and corporate leaders, the UK government has to make sure they stay here. How can that be done?  Again - simple: By ensuring that the voice of business is heard and felt at every level of government. That's good for keeping companies here and great for delivering good results from government.

The lame Maylard

Another day, another example of that the Prime Minister is in office, but not in power. At the launch of the Taylor Report into modern working practices, Theresa May has promised help, by no new laws.

Expect this sentence to be repeated time and time again. Without a real majority and both main parties divided (how bitterly depends on the day and the issue), there is not the votes in the Commons for much. No one in Westminster expects Theresa May to survive the full parliamentary term, but it is beholden on her to find a way of making work that time which remains to her. Equally it is beholden on opposition parties and MPs to, on an issue-by-issue basis, work with the Government to get things done. Putting the politics aside, we do need a functioning system. Those that we elect to make decisions on our behalf really have to put petty advantage aside sometimes and get on with it.

Please note, the weak pun in the title refers to a species of duck, not to bodily size.  The PM's BMI is fine.

Notable Headline

Brexit saves UK from catastrophically lucrative EU free-trade deal with Japan

...a different viewpoint to some.
Silicon passage

by Louis Rynsard
Director, Reputation & Strategy, SBC London

OK Google, call the police

While much has been written about smart speakers always listening to us, and the impacts this can have on privacy and related issues something has been missed, there is a positive.

In New Mexico, one such device summoned the police after an abusive man threatened and beat his girlfriend.  While it is impossible to say for sure, it looks possible that this saved her life. Across the world, technology is being utilised to solve issues as diverse as child abuse, human trafficking and slavery. Tech can be a force for good if used as such. It is up to us to do so.

Broadband for the many, not the few

Over stateside Microsoft is launching a major push to spread high-speed broadband to rural areas of the United States. An oft under discussed problem in the Western world – in many areas our internet is amazing, in rural areas it is in many cases worse than useless.
With so much of life, work and even love now reliant on the internet this disparity is not just unfair, it is scandalous and is holding communities back. Simply put, a child in a rural area is born unable to truly compete with a child in an urban area just because of the different internet connection. Once again, business is solving major problems by working to address this disparity. The companies involved deserve all the support we can give.

Tech firms beta test feudalism

Following in the footsteps of Google, who recently spent $30 million on housing for employees, Facebook has announced it is building 1,500 apartments for staff.
Reports state that Facebook employees will never have to leave their little village. With all the amenities of life and work provided. Students of history will note a similar setup in Medieval Europe, where peasants lived and worked for their masters in a feudal structure. That worked out for everyone, right?

Who's having a rough week

Chinese umbrella-sharing startup sees most of its 300,000 umbrellas disappear in just 3 months

...another case of the short-lived umbrella, not yet the next uber.

C-suite comment

by Lief Anya Schneider
CEO, SBC London
It was the thing that seemed a long way off. Now, like Frankenstein’s creation, it is beginning to rattle a little. The MiFID II Monster will shortly be on the move.

It’s a bit like Brexit. Those who didn’t want it, moved, or are still moving, at different paces, through the stages of grief - denial, anger, bargaining, depression and, finally, acceptance. 

And those who did want a Brexit are angry at the lack of enthusiasm. 

Just as there are remoaners and brexiteers there are MiFID II Lovers, who will praise the benefits to the skies, there are (a few) MiFID II-eers-but-it-didn’t-go-far-enoughers, and MiFID II Resisters and then there are most firms and most people: MiFID II Deniers.

Rumour has had it all along that lots of companies won’t be ready.

But then, they said that about the Olympic Stadium – and that turned out “alright, on the night”. Without even a change of deadline.

MiFID II – whichever way you cut it – ain’t sexy. Not, at least, in its raw form. The devil, they say, will be in the detail. And there’s a lot of that.

But now leaders and their comms strategists are going to have to accept that MiFID II will happen. And a position will have to be taken in terms of informing stakeholders as to state of play and effect. Those who need to present this unedifyingly complicated and labyrinthine regulation (as it integrates into their models) in digestible form, need to start thinking about it. Seriously. Without doing a MiFID II on themselves, and forgetting that that stakeholders actually want value above all else, and will only be interested in benefits, not features.

Poem of the week

Woman Work by Maya Angelou

Picked by Louis Rynsard

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