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The Morning Briefing: Sunset clause clarity and HFMC acquisition

Good morning and welcome to your Morning Briefing for Tuesday 17 January, 2023. To get this in your inbox every morning click here.


Sunset clause clarity

The Venture Capital Trust Association (VCTA) wants more clarity around the clause for the Venture Capital Trust (VCT) scheme.

Former Chancellor Kwasi Kwarteng lifted the sunset clause, which affected VCTs as well as enterprise investment scheme and seed enterprise investment scheme, during the mini-budget. The three schemes were set to be reviewed in 2025 and potentially scrapped.

His successor, Jeremy Hunt, has also pledged to extend the schemes beyond 2025.


HFMC acquisition

HFMC Wealth has acquired City-based R&S Financial Planning Ltd, in a deal which further strengthens its London office.

The deal will add around £680,000 of annual recurring revenue to HFMC Wealth, and assets under advice of £145m.

The average client size is £1.2m, which marries perfectly with HFMC Wealth’s high-net-worth proposition.


New CEO for M&G Asset Management

M&G has appointed Joseph Pinto as its next chief executive of M&G Asset Management.

He will have accountability for all investment capabilities including the equity, fixed income, multi asset, private and alternative asset strategies alongside distribution, operations and proposition management across the asset management business.



Quote Of The Day

The unpopularity of UK equities last year with retail investors is ironic when you consider the fact that the FTSE 100 was the best-performing major equity index globally in 2022.

– Jason Hollands, managing director of Bestinvest, comments on the FTSE100 as it nears record high



Stat Attack

New Mallowstreet research commissioned by Cardano has revealed that professional trustee (PT) firms are playing a critical catalysing role improving diversity, equality, and inclusion (DEI) in UK pension scheme boards.

Over a third of PT firms

Report that more than 40% of their trustees are female

A quarter

Of schemes with professional trustees say the same, highlighting that professional trustees are helping the schemes they work with increase diverse representation

One in five

PT firms reported that over 40% of board members are below the age of 45

54%

Of PT firms have conducted or are planning to arrange diversity and inclusion training as part of their efforts to improve DEI

38%

Have established a formal zero-tolerance policy for harassment or bullying

58%

Think that DEI is low priority compared to other governance issues

42%

Attributed it to the failure of attracting diverse talent

30%

To the risk of virtue signalling or DEI becoming a box-ticking exercise

68%

Of respondents also do not follow any major DEI standards

63%

Recognised that DEI is a useful way to broaden a team’s skill sets as well as improve governance and decision-making for better member outcomes

Source: Cardano; New Mallowstreet



In Other News

Luke Hornsby ACSI has been appointed as the new chair of the Chartered Institute for Securities & Investment (CISI) Young Professionals’ Network (YPN) committee.

He takes over from Emma Dobson MCSI of Santander UK.

Hornsby has worked in financial services since 2018 and joined EY’s Business Consulting practice in 2022 as a senior consultant within the wealth & asset management risk & regulatory advisory practice.

He is currently pursuing the CISI Level 6 Diploma in investment compliance and holds the CISI investment advice diploma and investment operations certificate.

He also has a Bachelor’s Degree in mathematics from the University of Greenwich.



From Elsewhere

Banks still investing heavily in fossil fuels despite net zero pledges – study (The Guardian)

Top business leaders discuss financial innovation at the World Economic Forum (CNBC)

Yen traders brace for wildest day since financial crisis (Bloomberg)


Did You See?

“Against a difficult economic background, an assumed imminent recession and the associated fall in companies’ revenues, much of current investment debate concerns definitions of share price value – what does ‘cheap’ mean and what is a ‘fair’ price

“Share prices can rise despite being expensive or amid a recession. Some investors’ estimates of a companies’ value might be more optimistic than others, particularly after declared profits surprise. On the other hand, cheap shares can just get cheaper if profits start to wane.

“Thus, earnings are important. If I divide a company’s post-tax profits (that could be the source of dividends if the company so chose) by the number of shares in issue, I have the earnings per share (EPS).”

Graham Bentley, chief investment officer at Avellemy, writes for Money Marketing.

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