February 2008 Archives
“Sympathy is always on the side of Robin Hood.”
Daniel Bouton, chairman of Société Générale, on rogue trader Jérôme Kerviel becoming a cult hero
“Only those who will risk going too far can possibly find out how far one can go.”
T.S.Eliot, quoted in The Independent
“The really frightening thing about middle age is the knowledge that you’ll grow out of it.”
Doris Day, quoted in Newsday
Diana Choyleva, chief economist at Lombard Street Research, reckons that sterling’s poor performance poses a problem for the UK economy in Business XL’s February 2008 edition:
“One issue that will dog the UK economy is the performance of sterling, which is likely to continue to depreciate against the euro. Sterling is particularly exposed to a fall against the euro, with growth and interest rates likely to hold up better in the eurozone than in the UK.”
“One issue that will dog the UK economy is the performance of sterling, which is likely to continue to depreciate against the euro. Sterling is particularly exposed to a fall against the euro, with growth and interest rates likely to hold up better in the eurozone than in the UK.”
There comes a stage in all growth businesses when the issues of management succession become pressing. But finding the right people requires time and serious soul-searching as Nigel Botterill, founder of £7m-turnover franchising business thebestof.co.uk, explained in Real Business magazine. “It took me nine months to replace myself. I was working with 280 franchisees across the country, employing 35 staff. Everything rested on my shoulders and it was too much.” A headhunter search followed by numerous rounds of psychometric tests and personality profiles produced a standout candidate – Andy Hurst. But his current salary was way above what Botterill had expected to pay. “I had a stiff drink and a word with my accountant. It’s a bit like buying a house. You always end up blowing your budget but, if it’s your dream house, it’s worth paying over the odds.” Botterill’s decision to hire Hurst in October 2007 is paying dividends though: “I gave him my office and my PA to send out a clear message that he runs the show, not me and it has been a Godsend. Andy deals with the day-to-day running of the business, so I can focus on strategy and new product launches.”
Simon Walker, new CEO of the British Private Equity and Venture Capital Association (BVCA) argued the case for private equity in its New Year message and criticised aspects of the UK's tax system where they affect entrepreneurs. In particular, the proposal to raise capital gains tax rates to 18% from April will leave Britain with a rate "higher than most European countries", and will damage competitiveness especially in the smaller companies sector. “CGT is not as good as it could be. The UK’s competitive advantage is being eroded,” he said in an interview in Real Deals magazine.
The Annual World Economic Forum in Davos, the most impressive gathering of business glitterati in the financial year, saw large private equity firms keen to make their mark. The unveiling of a report by Harvard Business School professor Josh Lerner looked at the long-term nature of private equity as an asset class, which studied 21,397 private equity transactions between 1970 and 2007, drew a number of positive conclusions about the value of working with a private equity backer. Notably it highlighted the level of investments in innovation and the increasingly long-term patterns of holding investments.