The rise of foreign owned City businesses in the UK

Five questions answered.

A new report has revealed that the UK has a large percentage of foreign owned City businesses, indicating that the UK is viewed as a viable investment by overseas firms. We answer five questions on foreign investment in the UK.

What is the current per cent of foreign-owned financial services businesses in the UK?

According to a new report published by MAS, an independent M&A adviser, which was produced in conjunction with UK Trade & Investment, the government’s export agency, 46 per cent of UK financial services companies worth more than £100m are overseas owned.

In 2011 and 2012 the most active acquirers of UK financial services firms were overseas-owned businesses. Eighty per cent of those already had existing UK operations at the time of investing, which suggests they are committed to investing in Britain for the long-term.

Which foreign country is the biggest investor?

America. Over 47 per cent of all foreign investments in the UK are from the US, companies from which see the UK as a spring board into the rest of Europe.

What do these figures say about how overseas businesses view the UK financial market place?

The report says that these figures suggest that the UK financial market is viewed as an attractive market for companies looking to expand their business operations. It is thought this is because the UK is well placed to take advantage of emerging markets such as Brazil, Russia, India and China, all of whom increased their investment in the UK by 29pc in the last year.

What do the experts says?

Olly Laughton-Scott, founding partner of IMAS, told The Telegraph: “The report reflects how extraordinarily open UK business is to overseas investment. America, with its huge financial services economy, is using the UK as its springboard into Europe. As America expands its interests, it will place more emphasis on the UK.”

He added: “As Asia becomes truly globalised, this will play to London’s strengths; they will come to Britain. China [investment] has grown the most rapidly over the last year and as financial services becomes increasingly globalised, we will see the largest proportion of that investment come to the UK.”

How is the financial services market doing in general?

According to the UK trade minister, Lord Green, who spoke to The Telegraph, the UK remains the number one destination for financial services investment in Europe.

The IMAS also offered a positive outlook by saying that retrenchment that has taken place since the credit crisis seems over and the sharp drop in the number of authorised financial services that occurred in 2008 is slowing considerably. However, some quality people are said to have left the industry due to a new rule change that requires independent advisers to register with the Financial Services Authority.

Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

OLIVER BURSTON
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How science and statistics are taking over sport

An ongoing challenge for analysts is to disentangle genuine skill from chance events. Some measurements are more useful than others.

In the mid-1990s, statistics undergraduates at Lancaster University were asked to analyse goal-scoring in a hypothetical football match. When Mark Dixon, a researcher in the department, heard about the task, he grew curious. The analysis employed was a bit simplistic, but with a few tweaks it could become a powerful tool. Along with his fellow statistician Stuart Coles, he expanded the methods, and in doing so transformed how researchers – and gamblers – think about football.

The UK has always lagged behind the US when it comes to the mathematical analysis of sport. This is partly because of a lack of publicly available match data, and partly because of the structure of popular sports. A game such as baseball, with its one-on-one contests between pitcher and batter, can be separated into distinct events. Football is far messier, with a jumble of clashes affecting the outcome. It is also relatively low-scoring, in contrast to baseball or basketball – further reducing the number of notable events. Before Dixon and Coles came along, analysts such as Charles Reep had even concluded that “chance dominates the game”, making predictions all but impossible.

Successful prediction is about locating the right degree of abstraction. Strip away too much detail and the analysis becomes unrealistic. Include too many processes and it becomes hard to pin them down without vast amounts of data. The trick is to distil reality into key components: “As simple as possible, but no simpler,” as Einstein put it.

Dixon and Coles did this by focusing on three factors – attacking and defensive ability for each team, plus the fabled “home advantage”. With ever more datasets now available, betting syndicates and sports analytics firms are developing these ideas further, even including individual players in the analysis. This requires access to a great deal of computing power. Betting teams are hiring increasing numbers of science graduates, with statisticians putting together predictive models and computer scientists developing high-speed software.

But it’s not just betters who are turning to statistics. Many of the techniques are also making their way into sports management. Baseball led the way, with quantitative Moneyball tactics taking the Oakland Athletics to the play-offs in 2002 and 2003, but other sports are adopting scientific methods, too. Premier League football teams have gradually built up analytics departments in recent years, and all now employ statisticians. After winning the 2016 Masters, the golfer Danny Willett thanked the new analytics firm 15th Club, an offshoot of the football consultancy 21st Club.

Bringing statistics into sport has many advantages. First, we can test out common folklore. How big, say, is the “home advantage”? According to Ray Stefani, a sports researcher, it depends: rugby union teams, on average, are 25 per cent more likely to win than to lose at home. In NHL ice hockey, this advantage is only 10 per cent. Then there is the notion of “momentum”, often cited by pundits. Can a few good performances give a weaker team the boost it needs to keep winning? From baseball to football, numerous studies suggest it’s unlikely.

Statistical models can also help measure player quality. Teams typically examine past results before buying players, though it is future performances that count. What if a prospective signing had just enjoyed a few lucky games, or been propped up by talented team-mates? An ongoing challenge for analysts is to disentangle genuine skill from chance events. Some measurements are more useful than others. In many sports, scoring goals is subject to a greater degree of randomness than creating shots. When the ice hockey analyst Brian King used this information to identify the players in his local NHL squad who had profited most from sheer luck, he found that these were also the players being awarded new contracts.

Sometimes it’s not clear how a specific skill should be measured. Successful defenders – whether in British or American football – don’t always make a lot of tackles. Instead, they divert attacks by being in the right position. It is difficult to quantify this. When evaluating individual performances, it can be useful to estimate how well a team would have done without a particular player, which can produce surprising results.

The season before Gareth Bale moved from Tottenham Hotspur to Real Madrid for a record £85m in 2013, the sports consultancy Onside Analysis looked at which players were more important to the team: whose absence would cause most disruption? Although Bale was the clear star, it was actually the midfielder Moussa Dembélé who had the greatest impact on results.

As more data is made available, our ability to measure players and their overall performance will improve. Statistical models cannot capture everything. Not only would complete understanding of sport be dull – it would be impossible. Analytics groups know this and often employ experts to keep their models grounded in reality.

There will never be a magic formula that covers all aspects of human behaviour and psychology. However, for the analysts helping teams punch above their weight and the scientific betting syndicates taking on the bookmakers, this is not the aim. Rather, analytics is one more way to get an edge. In sport, as in betting, the best teams don’t get it right every time. But they know how to win more often than their opponents. 

Adam Kucharski is author of The Perfect Bet: How Science and Maths are Taking the Luck Out of Gambling (Profile Books)

This article first appeared in the 28 April 2016 issue of the New Statesman, The new fascism