Friday, 28 February 2014

Weekly Wrap Up: Linkedin & the Hungry Internet users of China

On Tuesday, Linkedin launched a simplified Chinese language version of its website and is in the process of getting a license to operate the Chinese language site. If successful, it will mean that Linkedin will be the only global social media website to have official permission to operate in China, whilst most social media sites have been blocked by the Chinese government.

But does this mean that Linkedin will have exclusive access to professional circles in China? This will hardly be the case. Strict censorship rules in the country have not ruled out internet users’ appetite for social networking sites. Instead, the people of China have created their own networks similar to their Western peers, but with more users. Linkedin will be facing strong local competition from similar networking sites such as Ruolin and Dajie. Similarly, the Chinese versions of Facebook and Twitter, Ren Ren and Weibo have had incredible success and have widely penetrated the internet market in the past few years. Internet users in China have become increasingly sophisticated. Like everywhere else in the world, social media is an important platform in forming public opinion in China. At the end of 2012, China had 564 million internet users, representing nearly 40% of the Chinese population.

Internet users in China use "wall-climbing"
software to climb over the Internet fire wall
Image Isawnyu
Despite the fact that popular international social media sites are officially banned by the PRC government, it would be naïve (and possibly even wrong?) to assume that Chinese internet users don't use with them. By spending ten minutes to download what Chinese called the “wall-climbing” software (i.e. climbing over the fire wall), internet users in China will be able to access Facebook as smoothly as their Western counterparts. Whilst Linkedin’s expansion into China may be viewed as a new portal for PR’s to promote in China, it should by no means be viewed as the only site to watch.

This week Abchaps attended some great events, including the CFA UK Research Challenge at Locke Lord’s offices. At this, the investment Olympics for young professionals, the future potential of the City really shone through. Ever keen to learn more about our counterparts in the media, we enjoyed drinks at Bloomberg’s offices and have taken their preferred methods of working on board!

In terms of hosting, the Abchurch fridge has never been so full of healthy food and bubbles. We welcomed a large team from Cenkos Securities, where we discussed not only the fast-growing space of Life Sciences but also the increasingly efficient space of Clean technology. As more and more Companies now seek good team “chemistry” from their advisers, it was a good chance for the teams to mix and swap ideas.

Abchaps also hosted two market lunches, including one with a social media themed and one with an impact investment focuse. It seems that impact investment is rapidly maturing, with investors able to reap more gains from their socially/environmentally responsible investment than ever before.

We also flew over to Boston to join the IPREX GLC conference for the weekend. As an active member of this global network, we look forward to hearing about how our global partners are fairing in what seems to be a much more positive economy.

Private equity firm NVM has recruited Karl Cockwill as a portfolio manager in its investment team. He joins from 3i, where he was a portfolio manager.

Steven Skinner has been appointed head of West End investment at BNP Paribas Real Estate. He joined its central London investment team in January from Savills.

"LION" - A LinkedIn Open Networker - A LinkedIn member with more than 500 connections. These members accept any offer, good or bad and weak or strong; some question the value of this LION status when considering the quality and the quantity of contacts.

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Friday, 21 February 2014

Weekly Wrap Up: All Eyes on the Tech CEO

This week, The New York times ran an article questioning why the pay packets of those on Wall Street were so widely criticized when the bonuses of Technology CEOs go largely unnoticed. The article pointed to Google’s compensation committee awarding the former CEO and current Chairman, Mr Eric Schmidt, $100 million in restricted stock, plus a further $6 million in cash last month; that’s a lot of Google Glasses for his family next Christmas. Whilst the eyes of the world were clearly on Mr Schmidt’s pay packet, the generosity of the committee passed largely unscrutinised.

Now, arguably the public have more reason to resent the high-fliers in the Financial World after the woes of 2008 compared to their counterparts in the Tech World; one gave us the tax bill for their bank bailouts and the other? Moshi Monsters.

And the anger is not just confined to our friends across the pond. There was outrage when Barclays announced that sky-high bonuses would be awarded to their CEOs at a time when they were about to cut their workforce due to falling profits. Incidentally, this was the same week that widely publicised reports discussed how the minimum wage has failed to keep up with inflation, forcing those over 21yrs to struggle on £6.31 per hour.

But what of the perception of the people behind the paychecks?

We all know that banking CEOs have long been demonized and that anger has been directed towards not only their pack checks, but also at them. Tech CEOs, on the other hand, have been glorified and publicised as heros.

Take Mark Zuckerberg. When Facebook came into the public eye he was portrayed as the awkward boy next door; he had come from nothing, had a great idea, worked hard and deserved his fortunes. People tend to like the tech start-up story: the idea of entrepreneurial genius crafting a trade in his (or her) parents’ garage.

Are the tides turning on those in Tech?

When Facebook announced their $16bn plus acquisition of the cross-border messaging service, Whatsapp, headlines did start to focus in on the CEOs behind the deals, and the pay-packages that they were now due to receive. For example, The Guardian ran a story: “Beware the WhatsApp hype: Mark Zuckerberg is no benevolent overlord”. Zuckerberg was accused of trying to take over the world with his Facebook empire, attempting to monopolise a market that would be far healthier, and less ‘bubble-prone’, if there were a range of competition. Does this sound familiar? IS THIS A PROBLEM?

One may be temped to ask: so what? Maybe it is time that Tech CEOs should face some of the questions being faced by the leaders of banking? Perhaps this would stop them making the same mistakes?

However, perhaps this demonization of Tech CEO needs to be stopped before it gains too much momentum. Why? Because they are our role models.

In a recovering economic environment it is absolutely vital that all levels of society are inspired to think, innovate, consider and, one day, become future CEOs. SMEs are going to continue driving the UK forwards in terms of recovery and future growth. For this to happen, however, those at school need to want to ‘grow up to be’ the next Zuckerberg, and turn their bedroom-born idea into a multi-million pound success story.

So can we stop this demonization occuring?

Tech CEOs can take action to ensure that the perceptions of both their Companies and themselves are positive. This is not only important to help fuel the UK's economic recovery, with inspired young minds looking to replicate their tech CEO predecessors, but also to the companies themselves. The investment story of the Company is not so detached from the CEO, and valuations can be affected by the public perception of a Company’s leader. Just look at Bob Diamond: Barclays realised the damage that his reputation and demonization was doing to the bank, and he was ousted.

A common tool in the armoury of many communications professionals is now to position CEOs as “experts for comment” and encourage CEOs to feature in columns like the “How I Made It” in The Sunday Times Business section. This gives our industry leaders the platform to explain what inspired them to become a CEO, and how they did it. The positive public perception can then help them weather any storms or controversies that may subsequently appear in the press. If they are considered a pioneer and an inspiration, the public may be more forgiving.

So the benefits of protecting the reputation of Tech CEOs are twofold: it can benefit the Company and offer considerable value to society and economic growth; young people will be more likely to turn around and say “when I grow up I want to be a Technology company CEO”.

Nomura, appointed David Hague as managing director in its EMEA Debt Capital Markets business. Hague previously ran the UK and Ireland FIG DCM department at RBS.

"Zuckbucks": A new pseudo currency, which Facebook uses to do almost anything it can to retain global mobile dominance. It’s not a limitless fund; the WhatsApp deal represents about 10% of the company’s market cap.

Travelling to the Wonderland: Xu Bing installation at the V&A Chinese artist Xu Bing’s fantasy garden ‘Tao Hua Yuan’ has charmed a wide range of Londoners with its beauty and detail. The installation, which looks magical at night, has transformed the pool of the V&A courtyard into a popular attraction.

Garden Museum An interesting exhibition that explores the relationships between fashion and gardening. With pieces loaned from museums and couture designers including the late Alexander McQueen, the show stands to impress and is available until 3 May.

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Friday, 14 February 2014

Weekly Wrap Up: A Flow of Israeli IPOs

Is London well positioned to capture the next wave of Israeli tech IPOs?

There has been hype and a buzz in the City this week about the number of Israeli tech companies that are currently eyeing a listing in London. Companies include digital advertising company Matomy who now has ten global offices in Israel, Spain, Germany, Mexico, San Francisco and New York and employs 400 people. The Company is looking to raise £60m which will value it at between £200 and £300m. Another is digital advertising Company, Marimedia.

Israel, dubbed the 'start up nation', is the second largest source of innovation after Silicon Valley and is the third largest source of listings on New York’s NASDAQ. Global tech companies, Apple, Google, Intel and HP have been building up their research and development operations in Israel, making the country a major tech hub in its own right. Its leading tech companies have engineered cutting edge medical technology such as Given Imaging, a producer of swallowable camera pills.

Inspiring Innovation
Source: Oliver Thompson - Flickr CC
News of foreign tech companies, particularly from this innovative market, choosing to come to London to list is welcome news; London must do all it can to attract these companies. For too long London has failed to do so due to the lack of fund managers and analysts focusing on tech. Many argue that London’s capital markets are too immature in this respect when compared to NASDAQ or even NYSE, and until London sees a consistent number of tech companies floating successfully on the London Stock Exchange (LSE) then investors will continue to go to the US to tap into its attractive infrastructure, analysts and flourishing IPO market. Was it presumptuous of Joanna Shields, Tech City Chief, to claim in October 2013 that London had reached parity with New York when one of the most exciting companies and gaming giant, King chose to float in New York last year?

Nonetheless, London has been making positive steps to capture this market and the most attractive sector for growth. The LSE launched the “High Growth Segment” (HGS) in March 2013 with the goal of enticing firms to the market; companies wouldn’t have to comply with the usual free-float rules and would also be able to list by selling as little as 10% of their equity. This initiative has been received positively by fast growing companies, and according to Marcus Stuttard, Head of UK primary markets at the LSE, there is a rising interest in the broader IPO market. It is hoped that the arrival of Facebook and Google as established presences in East London will bring a new wave of commercial expertise. The government has also launched its Future Fifty scheme, designed to attract and support online entrepreneurs to push the UK into the front of the global race in this respect. These are all great initiatives, but more will be needed to ensure that London successfully rides the next wave of Israeli tech companies looking to IPO.

Abchaps welcomed Mazars Finance and Corporate Finance teams into our offices and heard about their focus on Israel, as well as their specialist sectors: media, technology and telecoms. We also entertained some special guests at Chelsea, who were victorious over Newcastle 3-0 at Stamford Bridge.

Love wasn’t the only thing in the air this week; promotions and new appointments were also on the cards at a number of top City firms. Our friends at Cavendish Corporate Finance appointed Joe Stelzer as a managing partner after four successful years at the Company.

Octopus Investments announced that Debu Purkayastha is to be their entrepreneur-in-residence at the fund management Company. No doubt he will use his previous experience at Google to drive the business forward with his keen eye for exciting new opportunities. In the legal domain, Pinsent Masons have also now appointed Michael Ruck as a senior lawyer in its corporate crime team.

Finally, following our client Lighthouse Group’s announcement last week that Rowan Dartington had been brought on board, the Group have also appointed Mark Evans as business development director, moving over from his senior executive position at Pearl Assurance.

'BitTag' – In a week where the burgeoning BitCoin industry was writ large across our newspaper headlines, our tech-loving friends over in East London introduced the ‘BitTag’ concept. BitTags are physical price tags that provide the consumer with a real-time indication of an item’s price according to market fluctuations, displaying both local currency and BitCoin value.

Darling, you’ve left the BitTag on my valentines day present. This may have been a pricey gift at Harrods, but you could have got it at a knock-off price with BitCoin, you cheap…

It’s the big Valentine’s Day today, so whether you have been struck by Cupid’s love arrow or are single and ready to mingle, the City is hosting numerous options for both love and lust...

Instead of gazing longingly into each others eyes over a candlelit dinner, get physical with some couples’ aqua zorbing or a ‘Lovers Leap Bungee Jump’! 

For you singletons, fear not – love could be found exploring the beautiful and the ugly at the Natural History Museum’s Valentine’s Day Night Safari. Alternatively, head to Bounce club for its anti-val, strictly no kissing, just ping pong night of partying!

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Thursday, 13 February 2014

Tech Roundtable with Alistair Crane

Abchaps recently hosted 10 tech-loving City high fliers at our office. Everyone, without exception, around the table had first-hand experience of an Exit of some kind. We were fortunate enough to have Alistair Crane, Executive Vice President of Monitise Create, to co-host the event, following his starring role on Abchat just before Christmas. Alistair is widely considered as one of London’s top young entrepreneurs. He took his own start-up, Grapple Mobile, through a successful exit when sold to Monitise in September 2013. Alistair was the perfect candidate to chair the roundtable as we gained insights into the trends, opportunities and anxieties of those in the tech start-up space.

All guests agreed that there was a lack of funding from the banks available to early stage start-ups. The papers are littered with stories of how the Government plans to boost SME funding, but what about financial help for those who just have a really great idea? Those ideas need financial support to become the next big thing, and whilst there is undoubtedly a lot of over zealous non-starters out there, we must remember that one or two of those will be the next Twitter or maybe the next Grapple.

3D printing Source:
There was a feeling that beyond the banks, there is also a lack of options for those embarking on small capital raises. Tech start-ups can bump into the right people, operating in the right place at the right time and pick up the first £500,000 - £1m required to commercialise or expand. But if they don’t come across the people in the know, how are they supposed to gain access to capital?

It was proposed that the answer lies in the little black books of a few well-connected individuals in the City. A guest rightfully asked who now actually owns those leather-bound, pocket-sized and extremely coveted collections of paper? The consensus was that it was only through building relationships, getting out there and meeting both the more experienced players and indeed their successors, can anyone succeed.

Alistair focused on the importance of having a solid ‘Team’ in the aforementioned blogpost. It became clear from the lunch though, that particularly for a young CEO, ‘The Team’ is not just defined as those directly working under the payroll of the Company. It also includes advisers and intermediaries working alongside the young entrepreneur.

An article published by Niklas Zennström in the Financial Times recently questioned whether, given the ease of collaboration now facilitated by the Internet, the HQ of a start-up needs to be in a buzzing tech hub? Alistair, for one chose not to base his Company in Tech City, instead preferring to work from Soho, the media hub of the UK. This was however, only because he wanted to be close to his clients. It seems that wherever you choose to work from, you need to be amongst at least one of the most important stakeholders of your business, whether it be that clients, investors, advisers or the best talent pool.

Wearable Technology Source:
Conversations went onto examine future trends: Are disruptive technologies the future or are the strongest players in the field those who focus on developing a pre-existing technology? Where will tech newbies such as Twitter be in five years time in relation to the firmly established giants found in other sectors? The unique business life cycle of a tech company is definitely something that investors are still becoming accustomed to. Alistair believes (he admits perhaps due to a recent visit to the ever-optimistic United States), the likes of Twitter have a definite staying power and have gained traction in a sceptical but porous market.

There is no doubt that it’s an exciting space to be in; the lunch was an excellent opportunity to hear from those who are on the ground, enjoying the highs of a fledgling sector but also coming face to face with the daily hurdles of a growth industry. One thing is for sure, talking to the tech community is invaluable, and conversation is key. No tech start-up, nor adviser, is an island. Or, as the school lunch hall suggested, a slightly awkward geek. It is an exciting, prosperous and energetic community who are already succeeding, as shown by Alistair Crane. With the right teams and support networks, the industry will, undoubtedly, continue to go from strength to strength in the coming years.

Stephanie Watson

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Friday, 7 February 2014

The Weekly Wrap Up: The Power of Press Strikes Again

This week saw the Capital resist grinding to a halt as the RMT (Rail, Maritime and Transport Workers) Union conducted a 48 hour strike, led by leader Bob Crow, in response to fears that Transport for London would be cutting almost 1000 jobs.

As one would expect, the strike had a massive effect; delays were reported across the City as commuters and travellers alike struggled to conduct their daily routines with such an "essential service" take away from them.

Strikes have long been used by Unions as the method for giving a voice to the people and drawing attention to an issue. It could be argued, therefore, that strikes are (by any other definition) a PR stunt, welcoming the flies of press to the churning honey-pot of an issue.

If this was the intention of the out-spoken and opinionated Bob Crow, then the Tube Strikes could be argued to have been a a success. The story made every national paper, and inspired the reaction of the entire UK government.

Take Wednesday morning, for example. Whilst the Mayor was giving press interviews on the topic outside Embankment station, Bob Crow and Manuel Cortes, Leader of the Transport Salaried Staffs’ Association, were busy giving interviews to the BBC. Considering the questions that the platform that the pair were both given to publicly air their views, one might suggest that this press coverage could be described as the result of a PR stunt well executed.

But was this press coverage the right kind of coverage, and did it have the desired effect of portraying Transport for London (and the City of London) in a negative light?

The evening papers of Thursday reported the story with a surprising, and refreshing, amount of optimism: The Mayor of London was reported to have said that “nothing I have seen in the last two days is going to change (his opinion)”, whilst Iain Duncan Smith was discussed as vowing to stop benefits for strikers saying that “its madness that the current benefit system compensates workers when they go on strike”.

Friday also dawned incredibly brightly on the topic, with City AM reporting that although the strike could occur again next week, 91% of Oyster users had “defied” the strike by finding alternative methods of Transport.

The Guardian’s live-feed on the issue reported that in response to the strikes commuters had taken to their bikes bike, causing the number of bike-users to jump 70% during the two-day tube-halt. These bikers proudly and publicly broadcasted their activity with the use of the #bikethestrike tag-line of Twitter; a demonstration of a community not to be defeated.

Twitter, the new digital voice of the people, was also conveying a positive vibe about the strike with Hannah Cox writing on Thursday morning tweeting a (#Instagram) picture of the Thames with the caption: “What a difference a day makes! Gorgeous journey in wandering along the Thames... #london #walkingin #tubestrike”

This positivity wouldn’t appear to have been what Bob Crow and his fellow strikers were aiming for. As opposed to drumming up anger and dissatisfaction in the British population, it seems to have inspired feelings of stoical defiance in the Capital’s nation.

And how much of this was influenced by the media’s coverage of this strike? The positive communications that we have seen resulting from the full spectrum of the nation’s press, from right to left and west to east, indicates a press that did not just choose to give free publicity (and thus support) to those making a negative, political stand, but to give a full critique.

There is no doubt that journalism holds a sway over the way that the public thinks. Had this morning’s papers reported misery, turmoil and defeat, the public could well have reacted accordingly and buckled under the pressure. However, having been exposed to such optimism, it seems that the City of London has accordingly chosen not to be scuppered by such set-backs and to “find alternative means of transport”.

As one commuter reflecting on the Guardian’s strike coverage said: “this just goes to show the true power of journalism”.

Who needs public transport to get out and about in London? Abchaps certainly don’t! We walked, cycled and even went a little bit à la 007, setting sail on ‘The Clipper’ boat service to ensure we were at the City's top events, including the Moore Black Solicitors drinks event. The South England solicitors put on a fantastic evening, providing an excellent networking opportunity for all attendees.

When solace was sought from the ever-increasing mayhem down on the City’s streets, a number of influential City figures took refuge at our 125 Old Broad Street office when we hosted one of our popular ‘Market Lunches’. And, in a week when Northern companies had hit the headlines with their strong financial performances, we thought it was only apt for our Leeds office to also hosted a luncheon. Plenty of deals are clearly in the pipeline for our advisers "t’up north", and it was great to hear our guests' views on sector drivers and trends as we begin to buckle up for what looks set to be an exciting 2014.

Two City law firms take the spotlight with new appointments this week. Firstly, White & Case took on Inigo Esteve as a partner in its UK equity capital markets practice to focus on IPOs and secondary share issuances. Secondly, Baker McKenzie hired Julian Thurston to its pharmaceutical and healthcare team as a consultant.

Accounting and advisory firm Mazars made two new partner appointments: Hugh Mathew-Jones and David Dearman. They both join the forensic and investigation services division. Similarly, the two of them make the move across from previous employer, PKF.

Our client Lighthouse Group unfortunately loses its skilled development director Andrew Snowball to the wealth management company Rowan Dartington. Rowan has been appointed as the Company’s business relationship director and brings with him.

"Grass-roots Lobbying": Lobbying with the involvement of specific communities so as to reach legislature and make a difference in the decision-making process.

February is upon us and Spring is almost(!) in the air. So, if you’re bored by this week’s rain and blustery storms, head over to Kew or Chelsea Garden’s for some seasonal, floral uplift. This weekend the Princess of Wales Conservatory at Kew will be celebrating the tropical splendour that is the Orchid, whilst Chelsea Physic Garden has its annual snowdrop extravaganza Snowdrops Days. They’re a must do for all horticultural enthusiasts.

The London LGBT community can gather together and party like no other at the first ever Winter Pride UK. Held at Tobacco Dock, there is space for 3,000 people to rave it up with exclusive fire dancers and the biggest LGBT club brands, to the sounds of international DJs, including One Love, Exilio, Work and East Bloc.

If tube strikes don’t get in the way of Londoners getting about their daily business, surely a broken nose won’t hold Jonny May back when it comes to winging his way to the tryline! Of course, it’s Six Nations time again: Saturday sees Ireland take on Wales at 2:30pm, England hopefully smash Scotland at 5pm and France challenge Ireland at 3pm in Round 2 on Sunday.

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