Nathan Coe, the CEO of Auto Trader, a leading FTSE 100 company, has urged the government to stimulate increased investment in companies listed on the London Stock Exchange to revitalize the City's fortunes.
In an upcoming episode of City AM's Boardroom Uncovered podcast, Coe emphasized that the º£½ÇÊÓƵ lacks the same level of "encouragement or incentivisation" for building tech businesses as other countries, as reported by .
As the leader of the Manchester-based group since February 2020, Coe expressed that it "feels a bit lonely" being one of the largest technology companies in the º£½ÇÊÓƵ, highlighting a stark contrast with the US.
Coe called on the government to "spur on" areas like building technology companies and AI, where the º£½ÇÊÓƵ can excel globally and attract substantial investment.
Furthermore, the Auto Trader boss stressed the need for greater encouragement of pension funds to invest in º£½ÇÊÓƵ equities.
Coe's comments follow City AM's report in February, where David Schwimmer, the CEO of the London Stock Exchange Group (LSEG), downplayed the gloom surrounding London's public markets, citing its strong performance relative to European counterparts.
Schwimmer reiterated his confidence in the growth of º£½ÇÊÓƵ IPOs this year, expressing his optimism about the direction of travel.
In discussing the London Stock Exchange's capability to hold onto its prime blue chip firms, amidst a trend of companies being snatched from public markets by private equity or choosing to transfer their primary listing to the US, LSE chief David Schwimmer addressed concerns.
Last year saw 88 companies depart from the LSE, including high-profile technology firm Darktrace and gambling giant Flutter, with only 18 making their debut through new listings.
However, Schwimmer downplayed the severity of this trend moving towards the US, highlighting that on average, merely two º£½ÇÊÓƵ-listed businesses per annum over the last decade have decided to switch their listings to American exchanges.
Auto Trader boss: ‘It feels a bit lonely at the top’
During an episode of Boardroom Uncovered, Auto Trader’s head honcho expressed a sense of isolation at the top echelons: "It feels a bit lonely at the top."
Coe remarked, "There's a lot of talk around [that] we need stronger º£½ÇÊÓƵ investors. Our own business has as many investors from the US and as it does in the º£½ÇÊÓƵ."
He further emphasised the attractiveness of the British market for prospective investors: "It is a liquid stock market and if people are interested in buying decent companies, and there are decent companies over here, then they will invest."
On a more personal note, Coe conveyed his feelings of isolation within the º£½ÇÊÓƵ tech industry: "We're one of the largest tech businesses in the º£½ÇÊÓƵ. It feels a bit lonely."
Coe also drew a stark contrast between the business landscapes of the º£½ÇÊÓƵ and the US: "I can tell you the names and phone numbers of the people that run the other tech businesses in the º£½ÇÊÓƵ and that is a big difference between the US and the º£½ÇÊÓƵ."
He then highlighted the lack of support systems for technology and innovation in the º£½ÇÊÓƵ: "We haven't really seen the same level of encouragement or incentivisation around building tech, building AI, all the things I would argue this country should be really good at.
"We have a history of inventiveness, engineering – all these things couldn't be more important than they are.
"The government really needs to spur on some of these areas where we can be the best in the world and it will attract a lot of investment."
The insights emerged during The Boardroom Uncovered interview, coinciding with Auto Trader's shares soaring to an all-time peak at the end of September 2024, while the company witnessed its revenue swell by 14 per cent to over £570m in the latest fiscal period.
In further developments reported by City AM in January, Auto Trader has announced plans to transfer its headquarters from a building honouring a Manchester icon to a new state-of-the-art facility valued at £87m.
‘Pension funds need more incentives to invest in º£½ÇÊÓƵ companies’
Meanwhile, the chief executive of Auto Trader has called for pension funds to be given more incentives to channel investments into º£½ÇÊÓƵ equities.
He commented: "The percentage that they put into º£½ÇÊÓƵ equities is just very, very small."
Drawing comparisons to his experience abroad, he remarked: "If you take a market like Australia where I was 17 years ago, the amount of pension money that goes into Australian businesses and supports those businesses also supports liquidity, supports valuation.
"And that makes it a more attractive place for other people to invest."
Back home, however, he notes a deficiency, saying: "We don't really have that domestic or the same level of domestic strength investing in equities that other markets have."
Highlighting potential pitfalls, he warned: "Unfortunately these things can become virtuous circles if local investors aren't investing in supporting valuations and supporting those businesses. And it is a bit harder for overseas investors.
"So I think looking at how we encourage º£½ÇÊÓƵ pensions and institutional investors to put a good chunk of their money towards º£½ÇÊÓƵ companies that would do a world of good.
"It would help liquidity, it would help support valuation. And it would give a bit more on top of political stability.
"We do have some investors that will say, 'I love the business, but it's all just down, it's all just a bit uncertain'.
"I mean, at least we've got a stable government, I guess at the moment. We went through a period where I was the new Prime Minister every year.
"For them, that is a risk that might well impact Auto Trader and that I need to take that risk somewhere else.
"It doesn't stop investors investing in a good company, but more good companies and a bit more º£½ÇÊÓƵ investment going towards º£½ÇÊÓƵ companies would go a long, long way."
