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7 March 2017 | Issue 6
Market corner

by Ghillie Little
ghillie@sbc.london
Outperformer
One happy Scottish merger!
Standard Life and Aberdeen Asset Management announced they are joining forces in an all-share deal to create the UK's largest fund manager. The firms aren't the only ones to be delighted with the merger, stock prices of both companies jumped more than 5% after announcement. With asset managers looking to cut costs due to pressure on how much managers can charge for actively managed funds, mergers are looking like the way to protect profits.

Neutral
Cautiously optimistic
The Julius Bär Group has placed a hold on UK hub expansion, with another eye on UK acquisition opportunities, thanks to the pound's continued fall. Julius Baer is no newbie to acquiring rivals and has already put out some less-than-subtle feelers out - and they aren't the only ones looking to take advantage of the weaker pound. We'd agree the UK isn't dead in the water yet!
 
Underperformer
Unexpected outage...
This weekend apps like Monzo, Loot and Curve suffered major outages, due to a glitch with their third party supplier Global Processing Services (GPS). Monzo posted a messaged confirming card transactions were failing and suggested customers use their other cards in the meantime. Although the glitch was out of their control, not exactly inspiring words from the bank that's trying to convince you to leave the traditional banking way of life. Monzo has since announced that they will be moving their card processing in-house, TBD if in-house is the answer.
 
FinWatch
No longer the only one in the sandbox
Is change on the horizon for Bloomberg? Pimco is looking to leave Bloomberg for Thomson Reuters-owned, Tradeweb. Pimco's potential move highlights the advancements that have been made in the automated trading space. They can't be the only ones considering efficiency.

Who could be having a better week?


Snap Inc.

...analysts already bursting Snapchats bubble. Some have other ideas

Reputation

Maybe Mayer
Marissa Mayer was hired in 2012 as the CEO who would turn around Yahoo. Things haven't exactly gone to plan, but she has been credited with leading the firm through tough times. During her reign, we have seen a few Yahoo execs leave and most recently, the Yahoo general counsel fell on his own sword over a 2014 data breach because he "failed to act sufficiently". This breach also resulted in Mayer asking for her bonus to be redistributed to hardworking employees. Some Yahoo executives have been somewhat candid regarding their dislike of Mayer, but could her leadership actually be a good selling point for a future beyond Yahoo? 
 
"I don't want more, I want to do more"
...said Chobani CEO Hamdi Ulukaya. Ulukaya is a great example of how impact and profitability are not mutually exclusive. We constantly read headlines about companies in the naughty corner over alleged 401K violations and Ulukaya proves that a company can be innovative, profitable and globally successful without compromising personal beliefs or the future of its employees.

Whether it's personally giving back to employees, pledging the majority of his wealth to philanthropy, or advocating for hiring refugees - Ulukaya proves that not compromising is smart business. Yes, giving up 10% of his personal equity in 2016 undoubtedly had personal tax benefits for him, but his actions show a belief in the future of Chobani and dedication to his employees, while simultaneously incentivising employees who are monetarily and personally invested in the future of the company. With the recent hire of Nestlé exec, we look forward to see what Ulukaya has up his sleeve next.
 
Firm-first, their bad
St James's Place has come under fire for an adviser's unsuitable financial advice to a client with Alzheimer's. The adviser persuaded the customer to transfer two ISAs into SJP, even though it would charge him higher fees. The Financial Ombudsman Service (FOS) argued SJP provided no evidence that the benefits for moving the ISAs outweighed the increase in fees to the client. Considering the announcement SJP made last week, which confirmed the long-serving boss was stepping down, one has to wonder whether the issue was bigger than one person. When one incentivises employees based on commission, do you encourage a behaviour that puts the interests of the client below that of the employee and the firm? The SJP situation paints a bad image of the firm and also an unfair image of the wealth management industry as a whole. Leadership is important and it starts from the top. Employees need clear direction to act ethically. It can't just be assumed.

SBC London Poll


Our recent SBC London poll confirmed our belief in the importance of leadership.
 
Silicon passage

by Nicholas Brown
nicholas@sbc.london
The Internet of your Thing
In finding outlandish uses for the Internet of Things (IoT), a small company operating in middle-England might have earned themselves the most interesting IoT accolade so far – offering the internet to your ‘thing’.

Believe it or not, the ‘i Con’, worn at the base of your standard condom, will measure your ‘performance’ in real time, offering essential titbits of info that you just can’t live without … such as calories burned, session duration and, of course, the number of thrusts. Wearable technology has suffered from a clear ‘use case’ dearth so far. Whether this will be the one that breaks through to usefulness, looks unlikely. But who knows, with the hard sell, it might just go all the way.
 
It's Einstein, my dear Watson
In what could at first be mistaken for the plot to a bad piece of fan fiction Einstein and Watson have joined forces  to change the world (or at least way we think about sales offerings).

In a recent deal IBM and Salesforce will integrate their artificial intelligence platforms (Watson and Einstein, respectively) to revolutionise the way companies approach their businesses.
 
As part of the partnership, customers will be able to combine Watson’s insights from its unstructured data with Einstein’s insights about information stored with Salesforce. In a totally not creepy feature, users will be able to collate an individual’s local shopping patterns with Salesforce to send targeted marketing emails. The tech world is built, in part, on collaboration. As every company more and more needs a tech offer we can only expect partnerships like this to increase in number. Watson and Einstein may be one of the first, they won’t be the last.
 
Meet Sedric, your self-driving car
It seems that Volkswagen’s vision for a driverless future  is, ahem, ‘subtly wedged shaped’. With a look some have compared to a 1980s portable cassette boom box player Volkswagen is the latest major auto company to enter the driverless market.
 
This venture comes in the form of a fully autonomous concept called Sedric – no pedals or steering wheel to be found. Like an automated dog, the vehicle can be summoned at the push of a button, but unlike a dog, it can then shuffle individuals to their chosen destination. Just like Uber – but without the other guy in the car. While not yet ready for market, this innovation shows how seriously car manufactures are taking the automation of driving. A world where no one drives? Not yet, but one day, wouldn’t rule it out.

Notable Headline


"Turtle named Bank has 915 coins removed from stomach in Thailand."

Corridors of power


by Louis Rynsard
louis@sbc.london
JAM tomorrow?
In her first speech outside the famous black door of Number 10 T-May (as the PM is called by staffers frequenting parliamentary bars) committed her Government to helping the ‘Just About Managings.’ However, since that sunny day in early July just about everything has been about Brexit.
While we can expect some changes and maybe a couple of rabbits out of the hat, tomorrow’s Budget will be a Brexit Budget. Until Article 50 has been initiated and the deal starts to become clear it will be hard for the Government to make any major changes. Especially with Hammond already briefing on the need for Brexit reserves.  
 
So my budget predictions: Broadly Sensible? Probably. Exciting? Depends on what you like. Move the agenda onto something that isn’t Brexit? No.
 
Fillon (still) in
Promising in an email today that “the real fight starts now” fast becoming the rallying call of poorly-performing Western leaders, that - François Fillon has gone from the champion of free market reforms to looking like the worst type of "crony capitalist". With new revelations today that he received a 50,000-euro loan, interest-free from a billion who “employed” his wife the poor guy can’t seem to catch a break. Short of a miracle it looks like Fillon has played himself out of the Presidency and with French Catholics abandoning him, that miracle is looking ever less likely. Especially considering (so far only rumours) that Sarkozy and Juppé are keeping up efforts to force him out.

Don't know/Not sure - great guy, terrific guy
In Britain it comes second as best Prime Minister, among nearly every voting group. In the Netherlands, it is polling at 40%, one week out from the election. Yes, the rising tide of Don’t Know could be heralding a new politics…

While it is easy to joke about this (at least for a political geek like me) the serious point here is that in many countries a significant section of voters have no political home. The leftward march of the Labour Party in the UK, coupled with Brexit, has left many a centrist voter not knowing whom to support. The growing chasm between political parties the world over, is leaving many without anyone they feel they can support. For politicians this is a real opportunity to re-grasp the centre ground (if they are brave enough). For society, this could have real problems. Don’t Know tends to lead to the apathetic ‘don’t care’ or the significantly worse anger and disillusionment.
 

Heroes of the week


Tony Bellew and David Haye

An underdogs epic victory and sportsman-like conduct at its finest. 

C-suite steer


by Lief Anya Schneider
lief@sbc.london
Why Donald Trump is right...
 
…On one or two things. Well, sort of. 
 
I will get lambasted by some for saying so. But I don’t care. I’m pretty fed up with the polarised, right-wrong, no grey areas, no-nuance, censorious culture that has crept up on us. Surely, even Donald Trump occasionally says something right, even if only by mistake?

While I am not a fan, I have some sympathy for his distrust of the press. Not a lot – I’m simultaneously appalled by the pushing out of the mainstream media. Press scrutiny of every powerful politician or leader is a vital part of democracy. Trump’s dangerous campaign to convince the wider population (I was going to say “the great unwashed” but my colleagues don’t seem to approve) that the media are abject liars is heinous and fraudulent.

But in every great fraud, there lies a grain of truth. Perhaps a few rotten apples in the press barrel have played a part in bringing us to where we are now.

Most journalists are hardworking, highly intelligent, and seeking to convey useful information to their readers. But there is a significant minority, often those who have become a little too famous, who, ironically, display Trumpesque hubris. These big ego showmen see themselves as super heroes, purveyors of the absolute truth, on which they have a monopoly, even if they’ve only given half the story. They are the truth, the light and the way, and believe they can be as rude as they wish to others whilst simultaneously expecting to be treated politely themselves.
 
There is a certain television political interviewer (now retired) who bounced from excellent, shake ’em up and expose ’em interviews to interviews in which he was so aggressive and offensive that the viewer rarely got to see interviewees in normal, reasonable mode. The whole exercise became like a third rate reality programme in which the subject simply revealed how well they could cope under the pressure of attack. Some politicians, whether good or bad, were never rattled, while others crumbled. But that was hardly revealing. Likewise, on a well-known morning radio news programme there is an interviewer who interrupts so much, one is left wondering what the interviewee actually had to say and what their side of the story was. This bull-baiting incivility is not helpful.
 
Other journalists have it in for business people of all colours and industries. Business is bad, they think, and it’s their job to expose it for what it is. This basic misunderstanding of economics, of job creation, of what creates social stability and wealth for all, is shocking. And why would any sane businessperson subject himself or herself to being interviewed by such a person, when there are plenty more balanced journalists around? 
 
The media has been given a terrible kicking of late. 
 
But it remains vital to our national health. Good businesses, like good politicians, should have little problem with legitimate press scrutiny. There is still no better way to secure your firm's reputation, share your message and show good leadership than continuing to brief the media regularly. 
 
Build a robust media strategy where there are no free hits on you or your company. And if you ever find yourself in front of an egotistical "I'm better than you" journalist trying to make a name for him or herself, stick to those easiest of defences - transparency, maturity and superior knowledge.
Poem of the week
Good leadership should not yield. Ulysses by Alfred, Lord Tennyson.

Picked by Louis Rynsard
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