Britain’s fund managers have been urged to think long-term and invest in new start-ups to help revitalise the UK economy.
Chancellor Rishi Sunak and prime minister Boris Johnson wrote to the head of investment firms in the City and called for investment ‘Big Bang’ by backing tech start-ups and infrastructure projects.
“We need an Investment Big Bang, to unlock the hundreds of billions of pounds sitting in UK institutional investors and use it to drive the UK’s recovery.
“It’s time we recognised the quality that other countries see in the UK, and back ourselves by investing more money into the companies and infrastructure that will drive growth.”
Britain’s lack of giant tech firms has been well-documented with AstraZeneca PLC (LSE:AZN) currently the UK’s largest firm with a value of around £130bn, but the US’s two companies worth mover a trillion dollars in Microsoft and Apple and a host bubbling under including Amazon, Google and Netflix (NASDAQ:NFLX).
There has also been a rush of takeovers of British companies led by private equity firms while the UK’s biggest privately-owned tech groups ARM Holdings is poised to be bought by Nvidia, another US tech titan.
Critics have called a golden share for defence companies and much greater scrutiny of deal that potentially results in investment being slashed and assets stripped purely for a short-term financial gain.
Johnson and Sunak made no comment on the current acquisition spree but just said that investing for the long term is a question that “All institutional investors should be considering”.
“We recognise that there is no single ‘right answer’ for the amount that should be invested in these long-term asset classes. Some funds are already highly active; some – for good reason – are not. You will know best what is right for your business.”