INVESTMENT
Growing dominance Cambridge – its already vibrant
companies in 2018, two were bought by private companies, meaning shares in the firms no longer trade on the stock market. These companies were drug development company Abzena and Produce Investments, one of Britain’s largest fresh produce companies. Furthermore, part of Ubisense was acquired by Bahrainian private equity firm InvestCorp Bank and renamed IQGeo Group but remained listed. Acquisitions can be an important component of a listed company’s returns. The £24.3bn purchase of Arm Holdings in 2016 by Japanese conglomerate SoftBank is a case in point. Arm’s share price rose by 41% on news, which is a financial windfall for its shareholders. Arm is now owned by SoftBank’s Vision Fund, which is not accessible to retail investors. UK investors could buy shares in SoftBank, which is listed in Japan, but that company’s performance is not intrinsically linked to the performance of Arm. Future gazing With so many cutting-edge private companies in Cambridge, the likelihood of more company flotations (listings)
on the stock market is high. In Grant Thornton’s Cambridgeshire Ltd report, more than a fifth of the companies (22) are technology firms. This includes five of the top ten fastest-growing companies out of the 100-strong field, led by DB Broadcast Holdings and Darktrace respectively. With the technology sector globally in rude health, there is a potential some of Cambridgeshire’s tech firms could be stock market darlings of the future. Companies looking to list on the stock market must go through a detailed IPO (initial public offering) process. This includes announcing on the stock exchange an intention to ‘float’ and then attracting investors. Private investors will usually be able to invest in IPOs through their SIPP or ISA provider, or through a stockbroker. For those looking to stay ahead of the pack, investment-related magazines or services such as Beauhurst may be able to help you predict the next companies due to list. Indeed, Beauhurst identified 30 companies it expected could float in the next few years based on various criteria, which included Cambridge Broadband Networks, one of the region’s largest 100 companies.
economy buoyed by the Cambridge- Milton Keynes-Oxford Arc and the UK Innovation Corridor between London and Cambridge – is forecast to dominate as the UK’s fastest-growing city between 2016 and 2026 , according to the City Tracker report by Cebr and Irwin Mitchell. Irwin Mitchell’s UK Powerhouse report, which analyses the economic performance of 44 cities, showed Cambridge’s year-on-year growth in the final quarter of 2018 was 2.7%. Dame Kate Barker, one of the country’s foremost economists and chair of the Cambridgeshire and Peterborough Independent Economic Review, wrote in her 2018 report that the region’s 1.37% contribution to nationwide Gross Value Added “understates its importance” and that to double the area’s GVA by 2040 would be “realistic”. This suggests it might be worth considering backing Cambridgeshire’s economy, rather than simply watching it roar away.
Anna Lawlor is co-founder of Luminescence Communications: weareluminescence.com
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ISSUE 02
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