In the past six months I have been to China, Korea, Iran and Turkmenistan. In every case the people I’ve dealt with from the business elite either already have a London base, or they want one.
How can this be? London is supposed to be falling off its pedestal as an international financial services centre.
In my experience they value things that we might not perceive in our own capital – its relative safety, for example, and the courtesy of its people, the quality of its housing – at least at the high end of the market – and of course world class healthcare and education – again more at the high end for paying customers; our cultural life. And pretty much every nationality has its own community here – a home from home in a not so foreign land.
So when I hear about banks and hedge funds contemplating relocating overseas, I wonder.
Higher capital requirements, a heavier regulatory hand, more interference and reporting obligations – and of course a ridiculous and counter-productive higher rate income tax band, make a strong logical case for a move to Switzerland or Hong Kong or Dubai.
If you throw enough money around you can find a decent place to live in any of these, as well as reasonable schools, private medicine, and a cultural life that’s not bad, even if it’s not quite London. As to personal safety, Switzerland at least is fine. But the welcome your family gets? You tell me.
The fact is that when you hire a senior investment banker for an international role, you have to hire the whole family – at least in the sense of getting them all on board. In this sense, London sells itself – just ask the 40% of finance professionals working in the Square Mile who come from overseas.
By moving offshore, firms risk losing current talent and future potential recruits. They will be choosing to be where the action isn’t. London rocks. Still. Just.
David Charters is a partner at advisory firm Partner Capital. He was formerly head of equity syndicate at Warburg and Deutsche in London. His latest book, ‘Where Egos Dare’, is published by Elliott and Thompson.