Mark Kleinman: Summit’s up with flagship Labour conference
Mark Kleinman is Sky News’ City Editor and is the man who gets the City talking in his weekly City PM column. This week he tackles Labour’s International Investment Summit, the Bank of London and Chelsea’s warring shareholders.
Summit’s up with flagship Labour conference
It’s a bit like being invited to an important birthday party and arriving all dressed up, only to find the venue hasn’t been booked and the host can’t be bothered to make an appearance.”
That’s the way one City figure described Labour’s preparations for its International Investment Summit, to be staged on October 14.
That may be harsh, but coming just a fortnight before Rachel Reeves’ inaugural Budget – a fiscal statement inevitably laden with tax rises and soak-the-rich rhetoric – the gathering will be a critical test of the new government’s economic growth credentials.
First things first: after weeks of uncertainty, a central London venue has at last been finalised, I’m told. Several, including museums, football stadia and royal palaces, were considered and discarded.
Will there be enough bodies to fill the location though? A Whitehall official tells me that the ambition of attracting more than 300 delegates to the event now looks far-fetched unless ministers agree to downgrade the seniority of those permitted to attend. Previously, only CEOs were on the invitation list, but I hear that, for example, Blackstone – in the absence of Stephen Schwarzman – will be represented Lionel Assant, another of its most senior figures.
Benjamin Wegg-Prosser, a well-known figure in Labour circles and co-founder of the geopolitical consulting firm Global Counsel, will not be there, though – or at least not in a ministerial capacity.
Wegg-Prosser had been identified as the leading candidate to become the new government’s investment minister, but withdrew from the process when it became clear that it was not financially viable for him to take the job.
I suspect the fact that Jim Messina, the former Obama campaign adviser, had just forked out millions of pounds to take a stake in Global Counsel may have had something to do with it too.
Either way, it leaves Labour with a vacuum to fill, and one that’s all the more surprising given the number of names floated internally for the role before July’s general election.
Ultimately, making the right appointment is more important than making a quick one; right now, with just 32 days until its flagship investment summit, the government is in danger of doing neither.
Blue is the colour for Chelsea owners with no defence
Blue is the colour. That’s not only the anthem played at Chelsea home games, but the mood of its warring shareholders.
Just over two years after Todd Boehly and Behrdad Egbali took control at Stamford Bridge, the teamwork in the boardroom looks like it does on the pitch: fractured, frosty and disjointed.
Reports last week that the two men are now so at odds that they are exploring the possibility of buying each other out of their Chelsea stakes are plausible; rumours of their growing enmity began circulating less than six months after they took control of the club.
The Bridge is in a state of utter chaos. Chris Jurasek, an executive from Egbali’s private equity firm, Clearlake Capital, has become the second chief executive to depart since the takeover. Other senior managers are also on their way out amid a cost purge which looks motivated by a desire to meet Premier League Profit and Sustainability rules.
With the co-owners adopting an entrenched position and now briefing defiantly against one another, Chelsea fans would be forgiven for resigning themselves to a protracted period of uncertainty.
It’s rather sad, though, that Chelsea may go through a further major ownership change before the £2.5bn in proceeds from the last deal reach the Ukrainian war victim charities that were its intended beneficiaries.
It’s a bad look for the Bank of Blunder
Bank of London? More like a bank of blunders. The “administrative error” that led to HM Revenue & Customs filing a winding-up petition against the clearing bank founded five years ago was truly extraordinary for a regulated financial institution.
Last week’s announcement of the ‘transitioning’ of founder and CEO Anthony Watson to becoming a non-executive director of Bank of London’s holding company was, the company said, a natural time to appoint a new leader.
The timing, though, looks odd, to say the least – as does the hastily announced capital-raising confirmed over the weekend which saw existing investor Mangrove Capital Partners leading a £42m “oversubscribed” funding round.
Stephen Bell, installed as Watson’s successor, hailed the fundraising, saying: “By holding deposits at the Bank of England, businesses have full confidence in their funds being available at all times. Our success in completing this £42 million funding round underscores investor belief and confidence in our vision.”
Investors might have confidence in Bank of London’s vision; perhaps not so much its record-keeping and administrative functions.
The debacle with HMRC raises serious questions about the company’s governance and controls, particularly given the apparent unawareness of the grandees – among them Lord Mandelson – who sit on its holding company board.
According to an investor deck I’ve seen – and produced before last weekend’s funding announcement – it required £3.5m by 9 August and a further £15m by the end of the month to meet regulatory capital requirements. It also projected hitting £1bn in revenues by 2030 at a margin of 60 per cent.
Ultimately, Bank of London exceeded the capital-raising target; but living hand-to-mouth as a bank which prides itself on “security and simplicity” is hardly a good look.