Mark Kleinman: Financial Reporting Council must offer clarity on Haddrill’s future
The 900 UK partners at PwC were unable to deduce much from a voicemail left for them this week by their boss, Kevin Ellis, about its plans for the future of the UK audit market.
His message was “very top-level”, according to one person who heard it: the details of its blueprint, submitted to the Competition and Markets Authority (like those of the other “Big Four” firms), will be published at a later date. An equivalent sense of mystery hangs over the future of Stephen Haddrill, chief executive of the Financial Reporting Council (FRC).
As I reported last weekend, he is preparing to step down in the coming months, amid a multitude of inquiries into his organisation and the industry he regulates. I’m told an announcement had been due on Monday, but so far, there has been a deathly silence from the FRC. Assuming that Haddrill hasn’t changed his mind about bowing out after almost a decade, it would be wise for the FRC to practise the transparency it demands of others and clarify its future leadership plans.
A Chrysalis reborn
Who’d be a fund manager in these markets (Part One)? The Merian Chrysalis Investment Trust, the first such listed vehicle for the newly rebranded Old Mutual Global Investors, set its sights last month on raising £200m to invest in early-stage companies. In the end, given the market turbulence, it will have done well to raise around half that sum, as I understand it will announce today.
Scaling back fundraising targets is no embarrassment in this environment, and the strength of Merian’s existing early-stage portfolio (stakes in The Hut Group, Secret Escapes and Transferwise) suggests its managers have a clear eye for backing unicorns.
The flipside of cutting its fundraising ambitions, of course, is that the money Merian is raising should go further than it would otherwise would have done as a consequence of the recent sell-off in US tech stocks. Bargains have been hard to come by for venture and later-stage investors, particularly in often-overhyped sectors such as fintech. There are, though, bargains out there. Merian’s investment trust debut on the London market will be intriguing to follow.
Cameron’s China gamble
Who’d be a fund manager in these markets (Part Two)? The answer might not yet be David Cameron, the former Prime Minister, who is still trying to get his UK-China Fund off the ground more than a year after it was first mooted. This week’s news that he has tapped up Malcolm Offord, an ex-senior partner at buyout firm Charterhouse, will do his chances no harm, since Offord is an experienced – and high-profile – fundraiser and investor. Otherwise, the signs don’t look altogether auspicious. Cameron’s timing is beginning to appear awry, with a series of personnel changes at China Investment Corp, the sovereign wealth fund which had indicated it would back him, potentially counting against him.
Without CIC’s money, the coffers look threadbare, with few significant commitments received from elsewhere, according to insiders.
One possible boost might have come from the latest chapter of the UK-China Economic and Financial Dialogue, the annual trade summit at which Philip Hammond gave a nod to his former boss’s fundraising efforts in 2017. Yet this year’s instalment hasn’t even been scheduled, with some City sources citing Beijing’s pique at a recent encounter with the Royal Navy in the South China Sea as a reason for the delay. It might be rescheduled early in the new year, and in other respects current diplomatic relations appear cordial, but the backdrop doesn’t look great for Cameron right now.
*Mark Kleinman is the City Editor of Sky News. @MarkKleinmanSky