CORPORATE ICAEW.COM/CFF ISSUE 224 GROWTH FINANCE JULY/AUGUST 2020 OPPORTUNITIES FACULTY EXPERTISE Corporate Financier THE CHA G NG IN E R S H o ic w m e e q d n u a ity p c e ap th ital to ma ded rkets have respon LENDING A HAND IN THE MIDDLE ALL TOGETHER DOWN THE ROAD DEVELOPMENT BANK ADVISING INDUSTRY EMPLOYEE-OWNED INTELLIGENT MOBILITY OF WALES STEPS UP IN THE MIDLANDS COMPANIES AND AND THE FUTURE HELP FOR BUSINESSES DURING TOUGH TIMES THE COVID-19 CRISIS OF TRANSPORT ICAEW DIPLOMA IN CORPORATE FINANCE Build your career WITH THE DIPLOMA IN CORPORATE FINANCE The Diploma in Corporate Finance will The ICAEW/CISI Diploma in Corporate Finance is officially recognised by the the UK’s Financial Conduct HTXLS\RXZLWKDGYDQFHGFRUSRUDWHŵQDQFH Authority as meeting the full qualification requirement knowledge, skills and expertise. It has been for advising on investments in the course of corporate developed by highly experienced corporate finance business. ŵQDQFLHUVDQGRIIHUVDSUDFWLFDOO\JURXQGHG To apply or for more information, contact: transaction-orientated programme. +44 (0)1908 248 250 orFITXDOLŵFDWLRQ#LFDHZFRP icaew.com/cfq CONTENTS July/August 2020 Issue 224 GROWTH @ICAEW_CORP_FIN OPPORTUNITIES ICAEW Corporate Finance Faculty EXPERTISE icaew.com/cff PEOPLE 08 POWER A HELPING HAND David Staziker 31 Desire paths and his team at the Development Bank of Wales moved 32 Connections quickly to save jobs Find out who’s on the and livelihoods move in advisory, private equity and corporate law 34 On my CV Jon Stubbings explains how Grant Thornton helped LGC to get its 14 lockdown deal done MOVING ON UP Intelligent mobility is a big part of the 04 Editor’s letter UK’s strategy to be carbon-neutral by Adaptabilty is a key survival 2050. Brian Bollen skill, according to Marc Mullen finds out what the future holds 05 Faculty news The first ever online board meeting and a business finance boost 07 What’s next? Jackie Bowie says the scale 18 of economic challenges HARD TIMES make prediction a challenge Grant Murgatroyd looks at the effects of 11 Playing in defence COVID-19 on equity The UK’s deal regulators capital markets and should take employment asks: what will the fallout be across protection into account, the world? argues Jon Moulton 12 Machine tooled Parliamentary group analyses AI, investment and deals 25 American dream? Shaun Beaney reviews 31 Venture Capital Performance DESIRE PATHS Simmons & Simmons 26 Stand united M&A lawyer How have employee-owned Steph Featherstone discusses her businesses handled the international career global pandemic? and partnership ambitions 28 Heart of the matter Jason Sinclair speaks to dealmakers in the Midlands to find out how the region COVER IMAGE: THE VERDIN COMPANY THE IMAGE: COVER will emerge from COVID-19 ICAEW.COM/CFF 3 WELCOME Tough to call In March, as lockdown began, the intention in my house was to use free time to learn new skills. A 30-year-old sewing machine was retrieved from our loft. One half-lesson and one impatient teenager later, and we needed a Corporate Finance mechanic to come and fix it. But no one was Faculty allowed to visit. Best-laid plans had gone awry. Likewise, businesses have always had to think Mo Merali on their feet. And many will have learnt a few Chairman new skills during the past few months. David Petrie In this issue’s cover story (pages 18-24) Grant Murgatroyd looks at Head of Corporate Finance just how capital markets have behaved as the horrors of the global Katerina Joannou COVID-19 pandemic became apparent, economies juddered, and some Manager, capital markets policy governments struggled to respond effectively. The markets have been pretty efficient at delivering some follow-on capital, including emergency rights Shaun Beaney Manager, issues. Many IPOs have been put on ice. Corporate Finance Faculty But there have also been some huge stock market debuts and encores in Grace Gayle the US – in early June, Warner Music listed on the NYSE, valued at $12.7bn, Services manager and later that week Chinese grocery delivery company Dada floated on +44 (0) 20 7920 8656 Nasdaq, valued at $3.5bn. Eva Mota No one is suggesting that the IPO window is wide open for everyone. Operations executive +44 (0)20 7920 8413 Political crises around the world – including China’s tightening of its direct control of Hong Kong and the Black Lives Matter protests following the fi [email protected] death of George Floyd at police hands in Minneapolis – have increased the Marc Mullen feeling that some very significant geopolitical changes are well under way. Editor When it comes to public companies, what’s likely over the next six months [email protected] is that activist investors will play an increasing role in their decision-making David Coffman (a subject we’ve frequently covered in Corporate Financier). How well Selina Sagayam Victoria Scott businesses have adapted to the crisis also reflects the quality of leadership Jon Stubbings they have, how nimble they have been and how well they have looked after Editorial panel their staff. Last year Nobel Prize-winning economist Robert Shiller’s book, For details about corporate and Narrative Economics: how stories go viral and drive major economic events, individual membership, please visit icaew.com/cff described how financial panics spread like epidemics – and how collective or contact the faculty on: behaviour as a result of ‘viral’ stories could enable analysts to predict how +44 (0) 20 7920 8689 markets will move. His previous work, Irrational Exuberance, suggested that To comment on your magazine, there was too much emphasis on stock market performance and too little please email: [email protected] focus on infrastructure, education and other forms of human capital. Irrational Exuberance was first published in 2000. Then a second edition in 2005 took in the bursting of the tech bubble. And in 2009, insight about the 2008 crash was added to a third edition. I do hope Shiller’s typewriter Corporate Financier is produced by didn’t break down during the first week of lockdown... Sunday 207 Union Street London SE1 0LN To make any advertising enquiries email to: commercial.partnerships @icaew.com ISSN 1367 4544 Marc Mullen METCAH20256 Editor Printed in the UK by Geoff Neal Group Repro by F1 Colour Distributed to members of the Corporate Finance Faculty © ICAEW 2020 All rights reserved. The views expressed in this publication are those of the contributors; ICAEW does not necessarily share their views. ICAEW and the author(s) will not be liable for any reliance you place on information in this publication. If you want to reproduce or redistribute any of the material in this publication, you should first get ICAEW’s permission in writing. No responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication can be accepted by ICAEW, the publishers or the author(s). Whilst every care is taken to ensure accuracy, ICAEW, the publishers and author(s) cannot accept liability for errors or omissions. Details correct at time of going to press. icaew.com/cff 4 JULY/AUGUST 2020 CORPORATE FINANCIER NEWS & EVENTS NEW GUIDANCE FOR FINANCIAL FORECASTS ICAEW’s new guidance about preparing YOUR prospective financial information (PFI) has been published. While early adoption is encouraged, the effective FACULTY date is 15 October 2020. The guidance for the preparation of forecasts, projections, budgets and business, revenue, profit, cost-saving and synergy plans can be accessed online at tinyurl.com/CF-GuidePrep It supports the preparation of any PFI so that it is relevant, reliable, understandable and comparable. Katerina Joannou, ICAEW’s capital markets manager, who convened the working group for new guidance, said: “Four overriding points apply when ON BOARD, ONLINE preparing forecasts – including in deeply uncertain times: work out who the The Corporate Finance Faculty organised their clients and investee companies to information is for and its purpose; root its first ever online board meeting on meet the challenges that they have the information in analysis of the business; 28 May as a result of face-to-face meetings encountered, as well as the prospects for make clear what the information relates to, being ruled out due to COVID-19. Board the world economy and M&A. the risks and uncertainties and how they members all joined via ICAEW’s ‘Lifesize’ “There was an invaluable sharing of are mitigated; and be ready to compare platform and were welcomed by faculty experience and market insights. It will help the forecast against the actual outcome.” chairman Mo Merali. inform where ICAEW should be directing Board members – who represent its efforts as we move to the next phase of advisory firms, companies, private equity the coronavirus crisis,” said ICAEW’s head and law firms – discussed government of corporate finance, David Petrie. “It will NEWS IN BRIEF emergency measures to help fund also shape the faculty’s output in the businesses during the pandemic. They second half of the year to address The Corporate Finance Faculty and also talked about how they were helping member needs.” Immerse UK organised a special online forum for innovative companies in the creative industries on 1 July. Fabio La Franca from Station 12, NEW BOARD MEMBERS Katherine Gilroy from Seedrs, Puneet Raj Bhatia from Funding John Rugman, partner and head of transactions at Smith & Williamson, London and Shaun Beaney from and Alistair Brew, head of investment operations at the BGF, have ICAEW were on the panel to discuss joined the Corporate Finance Faculty’s board. raising venture capital during the Smith & Williamson recruited Rugman in 2013 as head of valuations.