Industry events / 06 October 2021

BVCA Summit 2021 - Day 1 review

BVCA Summit 2021 - Day 1 review

Across the BVCA Summit 2 day event Crestbridge will publish a brief rundown of key takeaways from each session as the event unfolds. 

The event, which is deemed to be the UK's premier private equity and venture capital conference will take place online whilst this year’s exclusive roundtable discussions and networking events will take place in person.

Read our full review from Day 1 at BVCA Summit 2021 below.

A lively first day of the BVCA's 2021 virtual summit threw up an unlikely star, in the form of Lord (Danny) Finkelstein, best known to readers of the UK newspaper The Times as a jobbing journalist rather than an expert in private equity, venture capital, seed capital or Series A funding.

What Danny does know about, beyond writing skittish columns and occasional book reviews, is politics. The thoughts he expressed in one of the opening panels - THE BIG PICTURE: ADDRESSING PRIVATE EQUITY PERCEPTION - were startling for their forthrightness, their essence being that (1) politicians do not care what anyone things other than in respect of polling day and (2) ordinary people don't know anything about high finance, let alone care about it and its practitioners.

Lord Danny was asked by Sara Rajaswaran, Director, External Affairs, BVCA, if he could give attendees an idea of the relationship between government, private equity and the public etc. This is a reasonably comprehensive account of how he replied.

“The big thing is they aren't thinking of you. They don't know what private equity IS. If they read a story they won't remember it, unless it's about something at the end of their garden." 

“People don't understand money and budgets. You need to understand this. Politicians know that people don't know and don't care. This goes for a wide range of issues, not just this field." 

“Your job is to persuade political operators that what you are doing will avoid loss. To most people, avoiding direct loss is more important than gain. For example, capital gain means nothing to most people, who won't have a capital gain." 

“You have to think strategically about how you influence politicians and politics, when no one is listening. But you have a big role in helping the economy to improve which will affect the outcome of elections.”

As if not to be outdone, James Ashton, billed as a business writer, speaker and consultant, from Portland Communications, also delivered one or two of what we used to call home truths in responding to question about public perception, but in the looking glass world of UK 2021 would likely be denounced as hate crimes.

He broadly stated that in the face of the widespread disruption that has become a key element of daily life, the mass of people simply aren't interested in private capital under any one of its various species, unless it hits them directly in the pocket. 

Most journalists, moreover, have probably little or no interest in paying much attention to the industry, and questioned whether the industry is in fact ready for an externally driven revival of press interest. 

The industry is more pervasive, yes, he noted, and is agreeing more and more deals, enriching pensioners as well as the owners who are selling and the firms who are buying, and contributing a lot to the economy. “Too many of your members take the private in private equity too literally,” he said. “You need to explain yourself. And if you let in some light, people might decide it's less important than they thought. Just because your industry has decided it wants to talk does not mean anyone wants to listen.”

This contrasted greatly with the sentiments expressed by Michael Moore, director general of the BVCA, in his opening remarks and in his role as master of ceremonies and central presenter, almost as if he were auditioning for a post as a BBC interviewer.

“I'm excited about what this industry does, funding breakthroughs in life sciences and providing the factories they then need,” he said. “The problem we face is communicating not so much the narrow value as the broad value. Private capital is everywhere. We need to be explaining to people and politicians what we are doing.”

Counterbalancing the Finkelstein/Ashton negativity, Kerry Baldwin, Managing Partner, IQ Capital, and BVCA Chair 2021-2022 stressed private capital's status as an important part of the eco-system. 

“We employ so many people in our industry, investing throughout the UK,” she said. “We can help transition out of Covid and build for the future at the forefront of fintech and life sciences...all at speed. We are seeing record numbers this year across private equity as well. Our deal flow is extraordinary. I have never seen such technological deal flow.”

Picking a path through much less emotional territory, Peter Arnold, UK&I Partner, Economic Advisory, EY, summarised a number of the key economic themes presenting themselves as the world proceeds on its uncertain recovery from the Covid-19 pandemic.

Global economies have bounced back impressively from Covid, he began. But there are a few buts. Principally in aviation, transport and hospitality, while a looming spectre on the horizon is that of inflation.

The recovery is running into supply constraints and has hit a brick wall and supply constraints in labour market and raw materials. Inflation has gone from nearly zero to over 3% and possibly more than 4% by end-2021.

This forms part of a global phenomenon that could soon see higher interest rates. The real question is how transitory the shock will be and there is a real risk that the transitory could become permanent and we could see the return of stagflation.

If the second day is half as much fun as the first, it will likely be several times more entertaining than most readers thought might be possible. 

Follow us on LinkedIn to stay up to date on Day 2 of BVCA Summit 2021.

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