M&G Boss Rossi: UK Has Growth Potential But Lacks Ambition

M&G chief executive Andrea Rossi has stated that the United Kingdom possesses the fundamental elements for economic success, including significant capital, skilled talent, and innovative companies. However, he argues that a prevailing complacency, coupled with political instability, is hindering the nation's growth potential.

Rossi, whose firm manages billions of pounds of savers' money, has been investing in British businesses, citing semiconductor manufacturer Pragmatic Semiconductor as an example of UK innovation. M&G’s Catalyst fund has invested over £47 million in Pragmatic, a company founded in 2010 that develops ultra-thin, flexible computer chips with applications ranging from counterfeit medicine detection to smart bandages and even odor-sensing clothing.

Despite these examples of promising enterprises, Rossi expressed concern over the UK's economic trajectory. He pointed to the approximately £2 trillion in cash sitting in British bank accounts earning minimal interest, suggesting this capital could be more productively deployed to support the economy and generate better returns for savers. Rossi noted that the UK has more 'unicorns'—privately held companies valued at over £1 billion—than Germany, France, and Sweden combined, underscoring the inherent potential within the domestic market.

One significant factor Rossi identified is a perceived decline in ambition, partly attributed to the post-pandemic rise of working from home. He questioned the willingness of younger generations to work, observing a lack of the "hunger" he believes is necessary for economic growth. "If you become too comfortable then that ambition is not there. And if the population is not ambitious how are you going to grow the economy?" Rossi stated.

Another frustration for Rossi is the trend of UK companies being acquired by overseas buyers. He highlighted the acquisition of rival asset manager Schroders by the US firm Nuveen as a concern, noting the diminishing number of large, independent British financial institutions. Rossi advocates for government incentives, similar to those in France and Italy, to encourage investment in domestic companies and expressed dismay at the UK's stamp duty on shares.

Rossi also touched upon the importance of political stability, drawing a parallel between frequent changes in leadership in a country and a company. He suggested that the frequent turnover of Prime Ministers has disrupted the country's stability, which he once considered excellent but now feels has deteriorated.

Since taking the helm at M&G four years ago, Rossi has focused on strengthening the company's financial position, improving operations, and driving growth. He has overseen cost savings of £250 million and achieved record operating profits. M&G has also implemented new brand campaigns, including "Momentum and Growth" for its investments in companies like Pragmatic, and "Moving and Grooving" for its stake in music business Seeker Music. Another initiative, "Memories and Grandchildren," focuses on helping individuals save for their future.

Rossi expressed a desire for government policies that promote growth and certainty, warning against excessive taxation that could stifle the economy. He called for a budget that "does not frighten savers."