Britain must rekindle its entrepreneurial drive to invigorate the stock market and the broader economy, according to Simon Peckham, a prominent businessman and former head of Melrose.
Peckham, who built a career by acquiring, improving, and divesting industrial companies, is now investing significantly in the United States. He has called on UK business leaders to be more assertive in seeking capital for expansion.
Encouraging Investment
Peckham criticized the UK government for what he described as discouraging investors, suggesting that an environment perceived as overly regulated and risk-averse deters capital from flowing into British companies. He advocates for an "outward-going entrepreneurial mindset" and a tax system that incentivizes risk-taking. "If people take these risks, there has to be an appropriate trade-off in terms of what they pay in tax," he stated, emphasizing that taxation policy should aim to expand the economic pie rather than redistribute a shrinking one.
His new venture, Rosebank, which aims to emulate the success of Melrose, has already secured £3 billion from shareholders. In less than a year, it has acquired three US manufacturers. Rosebank recently announced its first dividend, just two years after its London stock market listing, and is now a significant entity within the FTSE 250 index, with aspirations for promotion to the FTSE 100.
Focus on US Market
Peckham indicated that his company is primarily focusing on investments in the US, expressing satisfaction with its current market exposure. "Bits of the US economy are coming back nicely," he observed. He noted that regulatory frameworks in the US, particularly concerning employment law, offer a more favorable "timescale" for successful business turnarounds compared to Europe and the UK.
Despite his focus on the US, Peckham affirmed that raising funds in London remains feasible, citing Rosebank's own success in securing capital. "We have raised £3 billion from the UK stock market in the last 12 to 18 months to deploy into acquisitions," he said, countering the notion that funding is unavailable if the business proposition is sound.
He also highlighted a substantial decline in UK pension fund investment in the domestic stock market, from over 50 percent to approximately 4 percent over the last 25 years. Peckham urged ministers to devise strategies that encourage, or at least cease discouraging, investment in the UK's domestic market.