London Stock Exchange Chief Warns of 'National Security Issue' Amid Company Exodus
Julia Hoggett urges prioritization of UK capital markets as an increasing number of domestic firms are acquired by foreign entities.
The head of the London Stock Exchange (LSE) has raised concerns that the increasing number of companies leaving the UK is becoming a "national security issue." Julia Hoggett, CEO of the LSE, is urging the Labour party to prioritize domestic investment and bolster the UK's capital markets, viewing them as a strategic capability essential for retaining the nation's strongest companies.
Her intervention comes as two more UK-listed firms, Mobico (the owner of National Express) and Ashtead Technology, have accepted foreign takeover offers totaling nearly £800 million. These departures add to a trend that has seen 166 companies acquired for £180 billion since the start of 2023, with £74 billion in deals already this year. Simultaneously, fewer companies are choosing to list on the London Stock Exchange.
Hoggett highlighted that while Britain possesses abundant talent and capital, there is a "shortage of capital that we invest in ourselves." This deficit, she warned, risks the country creating world-leading companies only to see them scale their operations elsewhere. "This is not simply an economic issue. It is increasingly a national security issue," she stated.
She emphasized the critical role of UK finance in sectors such as defense, artificial intelligence, and quantum computing. Hoggett explained that beyond the necessary scientists, companies, and initial investors, companies require "a deep enough pool of domestic capital that enables those companies to become global leaders from the UK." She cautioned that if any part of this chain breaks, "ownership, investment, decision-making and strategic influence move to jurisdictions with better conditions for strategic companies to scale."
Hoggett pointed to examples like Cambridge Quantum Computing, which merged with a U.S. business in 2021 to become Quantinuum due to difficulties in securing sufficient domestic growth capital. The U.S. has since shaped the company's operations through its national defense and intelligence frameworks.
Another prominent example cited is Arm Holdings, a semiconductor company founded in Cambridge. Acquired off the UK stock exchange by a Japanese investment fund in 2016, it was later relisted in the U.S. in 2023. Despite maintaining its headquarters and significant investments in the UK, its ownership, board composition, and public market relationship are now predominantly oriented towards the U.S., including a substantial investment in a U.S. engineering hub.
Hoggett stressed that the goal is not to penalize companies for leaving but to create an environment that incentivizes them to stay. She argued that if British taxpayers fund research, universities train talent, and entrepreneurs found companies, the UK should also be a place where these businesses can thrive as global leaders. "As the Government considers how best to drive growth, it should view its capital markets as a strategic national capability and therefore a source of national economic security," she concluded.