Ben Griffiths

This month, under the Alma Spotlight, we have Ben Griffiths, Director, Equity Capital Markets at Investec.

June 2024

How do you feel about the markets in general currently?

The last couple of years have been extremely challenging as markets and companies adjust to a higher rate environment and UK equity markets have been under sustained pressure from outflows. This has been reflected in the muted level of ECM activity and structurally supressed valuations which have driven elevated levels of take privates. I am feeling much more optimistic heading into the second half of the year.

UK indices are performing well, corporates are generally well capitalised, we are close to having political clarity and the tide of outflows is beginning to turn. London is the leading European exchange for secondary issuance YTD, and IPO activity is also beginning to increase. Raspberry Pi has so far been a great success; confidence is critical for a healthy IPO market and strongly performing new issues are an important element of that.

What types of investments are you personally excited by?

The Energy Transition is a fascinating theme and of vital importance at an individual, corporate and national level. The higher cost of capital resulting from rising interest rates has created challenges for earlier stage businesses in nascent and developing industries, but there are some fantastic businesses in the UK with world leading technology to enable the transition. I am looking forward to these industries and business models evolving and maturing.

I also think the increasing democratisation of private capital markets is an exciting theme. There is some great innovation taking place within regulators, asset managers and intermediary platforms to broaden access to what have historically been very narrow markets.

What would be your three main pieces of advice for management teams as they think about how best to navigate the public markets?

  1. For existing listed businesses, the importance of meeting forecasts is critical in an environment of heightened risk aversion. It is challenging to capture value for ambitious near-term forecasts and the path to recovery in investor confidence when numbers are missed is steep.
  2. Set against that is the need to mitigate the vulnerability that arises from share prices that are detached from intrinsic value. There will always be parties with a longer investment horizon or greater ability to extract synergies. If that occurs at a valuation that rewards existing investors for the risk they have taken then the market is functioning healthily. Understanding and then communicating clearly and consistently the medium to long term value creation strategy, and demonstrating control of the levers to achieve this, is an important priority in minimising risk of an opportunistic approach at the wrong value.
  3. Finally, for management teams and shareholders thinking about bringing a company to market, start thinking early about your equity story and positioning. There will always be appetite for high quality, differentiated propositions that offer exposure to opportunities difficult to access through the existing listed universe.

What is the most interesting thing you’ve read or watched recently?

21 Lessons for the 21st Century, by Yuval Noah Harari. His first book, Sapiens, is one of the most illuminating books I can remember reading. 21 Lessons is equally fascinating, although prompts more questions than it gives answers. It is an extremely thought-provoking health check on humanity and the challenges we face, from conflict, to AI, fake news and the pace of technological change.

I am also reading Robin Wigglesworth’s, Trillions, the story of the growth of passive investment management. More prosaic and specialist subject material than 21 Lessons but nonetheless a very entertaining, accessible, and informative examination of a hugely powerful trend within finance and capital markets.

Please note: The views and opinions expressed in this interview are those of the individual financial professional(s) and do not necessarily reflect the views or opinions of Alma Strategic. These insights are provided for informational purposes only and may not be relevant at the time of reading, as market conditions can change rapidly. The information provided should not be construed as investment advice or a recommendation to buy, sell, or hold any financial product or security. Individuals should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Alma Strategic disclaims any responsibility for the accuracy or completeness of the information provided in this interview.