Friday, 26 July 2013

Weekly Wrap Up: A hypocritical religious institution? Well I never!

The Archbishop of Canterbury, Justin Welby, this week decided to wage war by launching a stinging attack on the Chief Executive of Wonga, saying: “We’re trying compete [Wonga] out of existence." Only two days later it emerged that the Church of England invested £75,000 into the firm. Quite a PR failure!

Surely anyone advising the Archbishop, before making such remarks, would have conducted some basic due diligence revealing that the Church of England’s pension fund helped to bankroll the payday lender. The Church has been pouring millions into Accel Partners, a U.S. private equity group, which was a big investor in the launch of Wonga. This discovery instantly undermined the Archbishop’s high profile pledge to destroy the loan company by opening a network of parish churches to promote non-profit credit unions. It also seriously discredits the Church of England’s move last year to place payday lenders and pawnbrokers on a blacklist of unethical investments.

Lambeth Palace regards the investment in Accel Partners as a serious inconsistency with its policy of opposing high interest-rate lending. The Archbishop has asked the commissioners to scour the pension fund’s £5bn investment portfolio to check for any other inconsistencies. This action is a little too late.

The advice is clear and simple: before embarking on a media battle, conduct thorough research and due diligence!

This week Abchaps headed to the West End for a creds swap with the folks at Zeus Capital; joined the completion dinner for our client Telford Homes' successful £20m placing; and attended a private breakfast briefing with Israel's Minister of International Affairs, Strategy and Intelligence Yuval Steintiyzs discussing the huge economic opportunities in Israel, particularly within the technology sphere and the enormous commercial cooperation with the UK.

Smith & Williamson has appointed Juliet McDonald of Lionstrust Asset Management as its associate director for marketing, whilst Berwin Leighton Paisner LLP has snatched up David Rowe to become the new Finance Director, previously of PwC and Herring Baker Harris. It has been revealed that Baker Tilly could be the saving grace to RSM Tenon’s flailing operations. If the merger goes ahead, it would generate a combined firm which could take on the likes of mid-tier accounting houses such as Grant Thornton and BDO.

"APR": Annual Percentage Rate, i.e. interest rate on your loan for a whole year. The typical APR of a payday loan is 1737% APR...

To commemorate the 1st anniversary of the sensational Opening Ceremony of the Olympic Games, the Queen Elizabeth Olympic Park is playing host to the Open East Festival (27 – 28 July). The 2-day celebrations will feature offerings from the Real Street Food Festival, a life-sized inflatable bouncy replica of Stone Henge, a floating cinema and an amazing line-up of live music and international acts. Big screens will also be in place televising the Sainsbury’s Anniversary Games and IAAF Diamond League action which will see 30 Olympic medallists returning to compete.

For the sun worshippers, head over to Camden’s Roundhouse tomorrow to see its newly transformed terrace into an urban beach, with 150 tonnes of sand, deck chairs, beach beds, amusement arcade games and even a tiki-style cocktail bar!

For those still caught up in #RoyalBabyFever, Buckingham Palace is putting on a special exhibition to mark the sixtieth anniversary of the Queen’s coronation. Unique displays of the State Roms, featuring bringing together dresses, uniforms and robes worn for the event, along with paintings, other works of art, and objects used on June 2 1953 are featured. The visitor route includes a 450-metre walk along the west side of the palace garden, which offers views of the garden, palace and nineteenth-century lake.

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Friday, 19 July 2013

Weekly wrap up: Laying the frack down

There has been a lot of excitement this past week in the black energy sector following George Osborne’s pledge to create the world’s most generous shale gas tax scheme. The UK Chancellor has proposed to cut the tax on shale production to 30% compared with the 62% paid by most of the oil and gas industry in a move that will be warmly greeted by the City.

Shale gas has the potential to transform the energy market in the UK as it will provide a glut of natural gas, boost tax revenues, create jobs, reduce energy imports and push down the price, to the benefits of households and industry. Ministers are very keen to replicate the success of this in the U.S. where gas prices have been halved as a result of fracking. More importantly shale gas can also fill Britain’s looming power crunch and risk of blackouts by the middle of the decade according to warnings by Ofgem. Around a fifth of the UK’s generating capacity is due to retire by 2020 and reserve margins will become uncomfortably tight.

Whilst ministers and industry members are keen to press ahead, they are set for a collision course with environmentalists and green groups implacably opposed to the process of fracking. These groups fear the process can pollute groundwater, release the greenhouse gas methane into the atmosphere, blight the countryside, cause earthquakes and tremors and affect house prices.

In response to these concerns the Treasury has already insisted that energy companies must provide at least £100,000 of community benefits for each well drilled by the industry. Ministers will also set out a system of regulatory oversight for shale gas with the Environment Agency, responsible for groundwater, and the Health and Safety Executive, in charge of wells.

The challenge for PRs and lobbyists on behalf of the energy groups that wish to start the process of fracking is to articulate to the country the benefits of shale gas; such as the energy security it will provide and crucially, for the public, the fact that it will bring down household fuel bills. The latter has been such a contentious issue for households during the recession. There should be no complacency in thinking that there won’t be significant opposition but at the same time if the industry successfully communicates the advantages of fracking to the decision makers and to the public, the benefits for energy in the UK will be marked and transformative.

Abchaps have been busy in the City this week including the very well attended Launch Event for Meridian Equity Partners, organised by our Creative Director; a summer drinks reception at the beautiful K&L Gates offices overlooking the city and St Paul’s; the VSO committee meeting; CIPR training in Strategic PR management and guest of Birketts LLP at Lords to watch the Barmy Army deal a killer blow to the Aussie’s Ashes hopes.

Westhouse Securities announced the appointment of Paul Locke as investment funds analyst, who joins from Cantor Fitzgerald Europe. Barclays appointed Matt Walton as relationship director in the bank’s hospitality and leisure team. He joins from RBS and will focus on developing relationships with new and prospective clients. The Royal Bank of Canada Wealth Management has hired Daniel Ellis as head of investments for the British Isles, who joins from HSBC private bank.

Fracking: a technique designed to recover gas and oil from shale rock. Water gets pumped into a hole in the ground at very high pressure in order to release the gas from inside.

Obviously the Ashes is home again this weekend, if you travel over to 33 Wimbledon Hill Road to the Carlsberg Sports Bar there waits a spacious bar with huge screens showing the live coverage of the Ashes this weekend.

The famous Electric Daisy Carnival (EDC) has arrived in London this weekend, the price is £65.00 but there are only 17 tickets left. Some headliners at the festival are Nero, Chris Lake and Flux Pavilion.

Perfect weather for a round of golf, but cant be-bothered to get a tube with clubs and spend lots of money. Try urban golf, where anyone can walk in and play. There are no posh rules in urban golf, actually not many rules at all you can drink as much as you want you can talk and make as much noise as possible. It is the perfect place to have a laugh and get drunk while playing golf. Also Sunday and Mondays are half price.

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Friday, 12 July 2013

Weekly Wrap Up: Evening Standard… Read All About It!

It has been a mixed bag of news for the media industry this week, leaving a touch of speculation as to its future. There have been the regular features: the ongoing case for a press regulator and its slow progress, Rupert Murdoch caught up in yet more conspiracy and another flurry of corporate activity as publications seek to sell or dispose of various assets. But the new comment and analysis came this week from the advertising industry.

A group of analysts and industry executives have indicated that there is soon to be a big shake-up in the fastest growing segment of the media industry. The shift from print to online publishing spurred a wave of start up companies coming to market but the boom time for ad tech companies is drawing to a close.

This news is quite contradictory to the Independent’s announcement that it is to make 27 compulsory redundancies in an attempt to cut costs. Instead, the paper will be re-vamped, creating 20 more digital jobs. It continues to highlight the ongoing shift of UK papers online. Similarly, this is supported by recent data issued by the Advertising Agency. It indicated that the UK advertising market grew to almost pre-financial levels, with newspaper digital advertising increasing 29.3%. So it makes sense, yes?

Not necessarily… The London Evening Standard, which still relies strongly on print advertising, reported a small operating profit last year. Moreover, as more newspapers start to implement paywalls, more readers are returning to the old fashioned ink on paper format. This could generate a new attraction to print advertising. So, despite the ongoing job losses and editorial team cuts, maybe these papers are speaking too soon. Could the media sector be more cyclical than popular belief and not quite so finite?

Investment bank and brokerage firm Liberum Capita welcomes Adam Smallman from Informa as Head of Content. Sarah Farrow leaves New Quadrant Partners for business advisory firm Baker Tilly as associate director in its private client team. Stephenson Harwood has appointed Lisa Marks from Berwin Leighton Paisner as an asset finance partner at the law firm. Canaccord Genuity Wealth Management welcomed Stephen Massey, formally principal and founder of Eden Financial, as head of UK wealth management at the firm.

Brush down the BBQ, crack open the punnet of strawberries and bottle of bubble – the UK is set for another scorcher of a weekend, with temperatures expected to reach a glowing 29oC in the Big Smoke…

Make the most of the sunshine and head down to the spectacular grounds of Hampton Court Palace for the final two days of the Royal Horticultural Society’s 2013 Flower Show. Get some hands-on inspiration as you wander round the 34 gardens, floral displays and marquees or simply soak up some of the festivals live music, shopping, fashion and food.

For the less green-fingered folk, head over to Camden Lock Live this evening for London’s only free boutique urban festival. Camden Lock Market plays host to a full evening of music, street performance, theatre and outdoor bars, with the added extras of pop-up table tennis robots and award wining street food! 

Food fans and French patriots can also make the most of their Sunday by heading over to the Bastille Festival in Bankside this Sunday, 14th July. Celebrate La FĂȘte Nationale with a French feast courtesy of Borough Market, get a free face-paint or even indulge in trialling some fine French wines.

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Thursday, 11 July 2013

Investors into London: don't be deterred by those stuck in the past

Investment into real estate within the Capital is flooding in. Recently we have seen several major deals signed with foreign buyers including Chinese property company Wanda in the Nine Elms quarter on the South Bank, Peninsula Hotels taking Derwent London’s stake in Grosvenor Place and UBS completing the sale of its Broadgate site to Malaysian investors. This is in addition to Boris Johnson signing a £1 billion deal in May for Chinese developers to create a business park in the Docklands. In fact Chinese property investment in London leapt from £21 million in 2011 to over half a billion in 2012. Overall foreign investment in the capital has more than doubled to almost £11 billion.

These figures are a superb boost for the Capital and the investments themselves will bring enormous growth and prosperity to the City. It demonstrates the global confidence in London as the pre-eminent financial hub and that for foreign investors; London is an attractive place to do business. The city is attractive for many reasons, in particular, because of its flexible regulatory and tax systems. Its mother tongue is the business language of the world and it is in a time zone where it possible to conduct business with both the US and Asia during regular working hours.

It should be no surprise that London was the fourth largest recipient of foreign direct investment (FDI) in the world in 2012 and the largest recipient of FDI in Europe, according to UN data. Moreover, having been a large recipient of foreign investment over many years, the accumulated stock of FDI in the UK is just short of £1 trillion.

In the global era, in order for the City to remain relevant and not lose its international status, it has to continue to be a magnet for foreign investors and they must be embraced and encouraged. Japan in contrast, retains its historically introverted outlook and has failed to embrace foreign investment, instead displaying strong resistance to it. As a result Tokyo has lost its position as an international financial centre. London cannot afford to follow suit.

However, there are those trying to slow down this great pace of foreign direct investment; councils and UNESCO. UNESCO has urged for a halt in high rise developments in run down parts of south London because it will block views of Big Ben and other heritage sights. Similarly Tower Hamlets Council deferred an application to build the UK’s tallest residential tower in Canary Wharf recently. There is in fact a strong desire for the City to embrace globalisation and modernity but at the same time retain its strong historical Medieval past. But for too long UNESCO and others have championed the latter at the cost of the former, opposing important developments such as the new headquarters for UBS on the Broadgate estate in 2011 and now it’s against the redevelopment project on the Southbank.

Councils, heritage organisations and others need to ask themselves whether preservation of views and heritage sites trump this crucial investment, particularly when they might jeopardise the future and the imperative of London remaining competitive and attractive in the global era.

Alistair de Kare-Silver

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