Michael Moore’s Outlook on the importance of a competitive investment landscape
Walking along the banks of Amsterdam’s canals, in the tranquility of a European autumn, you could be forgiven for being detached from the outside world. But at the latest gathering of the European private capital industry at SuperInvestor, those realities could not be blocked out for long.
Against the background of grim economic news, industry leaders met while climate talks continued at COP-27 in Egypt. Elsewhere, the leaders of the world’s wealthiest countries were in Indonesia at the G20, re-booting the global economy and repairing diplomatic ties. But Russia’s president stayed away and the attacks on Ukraine intensified. At a time like this, who wouldn’t want to be in the calm safety of the Netherlands?
Emotionally affected
Is private capital affected by all of this? At an emotional level, very clearly – the presence of leaders from Ukraine’s private capital industry in Amsterdam reinforced the connection. And in terms of the day job, yes to that, too. In one discussion we debated political risk and macroeconomic risk – I was struck by the attention and care being applied to politics. Not to this election outcome or that, but to the big moments – Brexit, war in Europe, climate change, the growing divide between China and the west. Risks or new opportunities? There were perspectives on all of that.
What was striking, too, was the determined mindset of the conference goers. And the continued high energy of the industry. Previous downturns, or worse, have highlighted the industry’s commitment to invest through the cycle, how it uses its deep pockets to create resilient businesses and brings in the operational expertise required at any particular moment. The last time there was inflation at these levels across Europe, the industry was in its infancy, but without being complacent, there is a clear sense that private capital can, and will, weather these storms.
A lot of effort will be put in to make it so. And as belts tighten, there will also be a lot of focus on how straightforward (or costly) it is to do business in different parts of Europe.
As the conference caravans passed through Berlin, Cannes, London and Amsterdam this year, the competitiveness of different tax, legal and regulatory regimes was in the spotlight. Capital, talent and ideas are highly mobile across the globe these days – making them stick in one country, or continent, should be every government’s ambition.
Partnership needed
At a time of heightened international tension, as governments grapple with a post-pandemic, highly-inflationary, energy-challenged outlook, the industry would have to be tone deaf to miss the urgency of fixing these problems. But to plot a route to sustainable recovery while navigating the uncertainties of climate change and a multi-polar world, needs a partnership between policymakers and our industry.
If the framework is right in Europe, meaning the EU and the UK together, we have the chance to contribute substantially to answering the challenges facing the politicians. Of course, there’s scope for some intra-continental competition (and it’s my day job to ensure the UK recognises how fierce the EU competition is…), but from all points of the European compass we have a shared interest, and shared mission, to create real public value.
As we press for the right frameworks across Europe, the attractiveness of Dutch canals or London’s gravitational pull are not bad starting points – but for us to maximise our impact it is vital that policymakers don’t lose sight of the key requirement to provide and maintain a globally competitive investment environment for the private capital industry.
Michael Moore
Chief Executive, BVCA
This article was originally published on 5 December 2022 on the Private Equity News website here.