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.