Justin Urquhart Stewart, the co-founder and head of corporate development at Seven Investment Management, told an audience of the region’s corporate leaders that a new Yorkshire investment platform could provide long term financial backing to ambitious small firms across the region.
He made the comments at a breakfast event to discuss the findings of the Sheffield City Region Quarterly Economic Survey, which included a panel debate about the importance of innovation.
Speaking on the topic “The Sheffield Hot Hub - new money for new business” Mr Urquhart Stewart outlined the innovations that were needed to revolutionise investment in the Sheffield City Region.
He said that in 1945, there were 45 stock exchanges in the country.
He added: “There were quite a few near here. You had Sheffield and certainly there was an embryonic one in Doncaster. There were various others in Manchester, Liverpool and Leeds. What’s the purpose of a stock exchange? Not to keep silly kids in red braces. The whole idea was to raise money the most cost effective way for local businesses. If you can’t do that, go away.”
He continued: “Where does the next lot of capital come from in the Northern Powerhouse; and you can’t use the word ‘Government’ and I presume the letters ‘E’ and ‘U’ are probably out of it as well?
“And the answer is, ‘We’re not very sure.’
“That’s not good enough. So let’s look at some alternatives. Why can’t you actually have a regional investment hub? You can do that in South Yorkshire.”
He added: “What do you actually need for that? You need a platform, well that’s not very difficult, there’s no shortage of platforms around. What you do need to happen then is proper due diligence.”
In days gone by, 90 per cent of companies that wanted to get on the stock market were kicked out because they weren’t of the right calibre, he said.
“Also (you need) the right investors, not widows and orphans chucking in £20 or £30. You need professional investors willing to take a risk.
“Once you do that you can then create a mechanism where local companies can come on, (and) local people can invest in it.”
“Let me just take 1,000 people in South Yorkshire and ask them to invest £10,000, that’s £10m that could be put into smaller businesses;businesses in the region. So there’s actually no shortage of money. It’s the mechanism of being able to push that through to those companies that need it.”
Mr Urquhart Stewart said that one of the biggest issues facing the UK’s economy was the lack of investment coming in, and the lack of ability to get finance for that investment.
“Well this is one way in which it could be done,’’ he told the audience at The Source, Meadowhall. “Here is a mechanism where regions could do something without the Government. So why would you do this? There’s access to capital in the first place and the cost of funding would be relatively cheap.
“It’s longer term funding, five to 10 years, that’s what equity funding would be. You could actually create the Greater Sheffield or the Yorkshire Index. And if that index is doing quite well, what does that do?
“The only reason you have a FTSE 100..is because it actually attracts more money into it. It creates awareness. People want to know if it’s a success and invest in the index or the companies on that index.
“You’re also getting local investors (in the regional index). People know the local businesses. People want to participate. So why not give them the ability to do so?
“If you’ve got shareholders who know the business and companies that know their shareholders that’s a much stronger company ethic than just a bland institution somewhere else. This will, if it’s successful, attract further investments as well.”
The breakfast event, which was chaired by Greg Wright, the deputy business editor of The Yorkshire Post, also included a panel debate featuring Aaron Giles, the creative development manager at the Escape Rooms, Paula Eddleston, the service director at 33 recruit, David Grimes the head of the Sheffield City Region Growth Hub, Prof. Tim Vorley of Sheffield University Management School and Anne Wilson, the managing director of Numill Tooling Solutions.