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EXCLUSIVE: Leeds Finance Summit Coverage

A statement from Yuesong Cai, the President and main organiser of Leeds Finance Summit:

"I am Yuesong Cai, a first-year undergraduate pursuing BSc Financial Mathematics, the president of Leeds Finance Summit 2021. It’s been a huge effort to organise the event this year. I am going to talk a bit about what happened behind-the-scenes of LFS. The transition from offline to online is challenging whilst intriguing. It requires us to keep innovative when facing new problems. It is difficult to hire students this year, so I kept the team scale to the minimum and did most of the work myself, with only three team members helping me with outreaching external speakers. With the help of the University of Leeds Alumni office, we secured seven top-speakers in the industry, and we are all proud of this achievement. Regarding virtual teamwork, I used an online collaboration tool called Notion which helped with team discussion, posting deadlines and tasks, as well as organising written emails. It proved to facilitate teamwork and greatly boosted the efficiency of our team. I also tried to be innovative in the way that the event is presented to audiences. I made the new visual design system; a consistent design pattern is adopted across all of our products, including website, presentations, social media, and posters. I created a website that helped better organise the event schedule, Zoom meeting links, as well as creating a welcoming user interface for all the audiences. Posters are created and distributed across all social media platforms I managed, incorporated with an online registration form that allows me to send email notifications prior to all sessions. I also made videos, including a promo introduction video prior to the events and some summative highlight videos after all the sessions, which can be used as the heat-up of the event and also served as a revisit for those who were unable to attend all the sessions on-time. I am glad the event went well overall, though sometimes we faced some technical difficulties. I hope you all have enjoyed Leeds Finance Summit 2021, and stay tuned for LFS 2022!"


The following is coverage of the Leeds Finance Summit talk given by Mark James McDonald on the 9th of February written by Sameeksha Sethi:

This session of Leeds Finance Summit was conducted by Bruce Macfarlane, Managing

Director at MMC Ventures. Interestingly, after graduating in English from the University of

Leeds, Bruce went to New York to become a lawyer; becoming a venture capitalist is the

third career he’s undertaken. The session included elucidation of various stages of venture

capital and, necessary steps and characteristics of each stage. Bruce also discussed the

various companies MMC Ventures is currently focusing on and the reasons behind it. In light

of the session’s topic, venture capital in times of COVID-19 was discussed, for which Bruce

presented both pros and cons. He discussed how the investment holding period has

changed with COVID-19 implications, and how working situations have been affected. A

piece of advice mentioned during the session was to focus on backing people

because it proves to be helpful later on in life. Career prospects in the field of venture

capital and an overview of what a day in the profession looks like was also spoken about

, which I’m sure would have been really useful for all the students attending the session.

Overall, the session was very insightful; all aspects of venture capital were mentioned and

discussed in detail. All the questions were also answered in-depth, making it more engaging

for the listeners.


The following is coverage of the Leeds Finance Summit talk given by Mark James McDonald on the 10th of February written by Phillip Coombes:

Mark James McDonald was a graduate of the University of Leeds back in 1996. Since then, he has enjoyed a colourful career within Private Equity, working now as a managing partner at DWS Private Equity in London.

During this talk, Mark broke down the industry, providing insights on how the industry operates and differs from the more common investments within equity markets found at hedge funds and asset managers. Private equity has not escaped the intense pressures and changes brought about by the pandemic. Mark details how the industry has adapted to and changed in the wake of the pandemic.

Overview of the Private Equity industry

What is private equity:

The role of private equity (PE) firms is to "buy and build". Private Equity firms purchase established companies to grow their revenues and increase their value over an average time horizon of 3-7 years. PE firms operationally are different from "normal" asset managers in so far that their investors typically invest over a 10-year time horizon during which their funds are locked. This strategy puts less pressure on the fund's companies to show positive revenues every quarter and allows for a longer-term growth strategy to be undertaken. An additional benefit of this approach is the absence of margin calls which improves the PE firm's ability to weather shocks to the financial system. Ultimately investors can expect to experience negative returns during the initial 3-4 years of their 10-year investment, but on maturity, the industry average reveals average annualised returns of around 12%.

How are PE firms structured?

Private equity firms will have a General Partner who manages the fund. The General Partner is held to account by limited partners, otherwise known as the investors. The General Partner is expected to grow the value of the companies the PE firm owns and generate returns for the investors. The relationship between the GP and the investors relies heavily on trust, given the nature of locked investments. Mark compared the General Partner's role to an elected Politician where their constituents are the investors.

How do PE firms generate returns?

Once the PE firm purchases a company, they work with said company's management to apply their expertise on business-related issues such as rebranding, refinancing, acquisition planning and anything else which will help grow the company. During their ownership period, they charge a management fee to the firm generating cash flow for the PE firm, and once they have achieved their aim of growing the company, they ultimately look to sell it and make a profit.

Private equity and COVID-19

How did PE adapt to the pandemic?

Mark described the PE industry's reaction to Covid-19 in three stages, amusingly calling the first of them the scrambling stage.

Stage 1:

Stage one was spent by PE firms trying to establish which companies in their portfolio had high exposure to the pandemic. Leisure and tourism companies during this stage often needed liquidity injections to keep them from failing.

Stage 2:

During stage two, the global central banks had injected sufficient liquidity into the system to prop up the stock markets. Stable markets meant PE firms could focus on understanding the evolution of the pandemic and how the economy was adapting. Mark named stage 2 "watching and waiting".

Stage 3:

During stage three, PE firms were trying to pick winners. Many companies had their valuations slashed due to pandemic exposure, creating opportunities to find undervalued firms and capitalise by utilising low-interest rates to increase their portfolios.

Opportunities within PE post COVID-19

  1. The major consultancies estimate private markets will double in value over the next five years, from a $4 trillion to $9 trillion industry. (private markets include private equity, private debt, private infrastructure and a handful of other sectors, but PE constitutes the lion’s share of the value).

  2. Mark believes the greatest opportunities will exist within the largest PE firms and within specialist PE firms that focus on one specific industry.

  3. Private equity is experiencing rapid innovation with the emergence of a secondary market in the last five years, improving the industry's liquidity.

  4. Mark also sees a significant opportunity within the ESG investing sphere, believing sustainable investments are crucial for a PE firm's long-term success.

Top takeaways from the Q&A

Advice for a graduate wanting to get into private equity:

Mark detailed how private equity is still very difficult to get into direct from university; however, as the industry grows, so too do the opportunities. Mark outlined the two most common routes to a career within private equity. These are the investment banking route and the consultancy route. First, let's start with the investment banking route. This pathway typically begins with an entry-level analyst position within one of the larger investment banks. After 2-3 years, you become an associate, and from here, you can transition into private equity through networking or via a recruiter. The alternative route revolves around becoming an industry specialist over several years spent with a consultancy firm. From here, you can transition to PE, especially likely if the PE firm specialises in your industry of expertise.

What are the critical skills needed to succeed in a career in PE?

Mark emphasised the importance of partnerships and relationships multiple times throughout the talk, so it was no surprise when asked for the critical skills needed to succeed; he answered relationship building. Mark went as far as to say, "private equity is the last bastion of relationship building". As the investment banking industry is increasingly governed by technology, private equity firms maintain their edge by building strong relationships - an essential component to build trust with investors and management of the firms within their portfolio. Mark does not see this changing any time soon because PE is almost exclusively available to high net worth individuals. As innovations in the industry occur and the secondary market's emergence accelerates, less wealthy individuals may begin to participate. Still, ultimately Mark believes trust, reputation and integrity will maintain paramount importance to succeed within private equity.


The following is coverage of the Leeds Finance Summit talk given by Frank Roden on the 11th of February written by Travis Sapeira:

Frank Roden has worked at BNP Paribas for the past 19 years and is currently the Head of

Asset Managers & Owners EMEA. An expert in capital markets, he has illustrated the

important role that capital markets play in helping to raise funds for clients. By providing

access to capital markets, BNP Paribas can raise 10 times the capital for clients than if they used their balance sheet alone.

Capital markets are where firms raise long term capital, typically by issuing shares or bonds.

There are two aspects of capital markets: primary markets and secondary markets. Primary

markets are where new shares or bonds are initially offered to investors by a firm. The

secondary market is where these securities are then traded between investors. The benefit

of a secondary market is that the assets offered on the primary market are more liquid,

which makes them more appealing to investors. Although the first primary capital markets

were found in Italian City States, the first secondary markets were observed in Amsterdam.

Roden further distinguishes between public and private capital markets. Often, public

markets are used to raise very large amounts of capital and private markets are used for

smaller amounts. Public companies sell shares to the general public, and the companies are

generally heavily regulated and have to provide frequent financial information. Conversely,

private companies raise finance through private equity and venture capital firms. They are

subject to less strict regulation, and they are not required to publish as much financial


Although public capital markets are often in the news more and seem more prominent, it is

private capital markets that are growing the fastest (in value) according to Roden. Mergers

and acquisitions are a common occurrence among public companies. For example, in 2012

Facebook acquired Instagram for $1 billion. Meanwhile, technological developments have

meant that new companies require much less capital than they used to. Investing in

intangible technology means production is much more scalable, so companies do not rely on

going public to raise capital as much as they used to. This means that there are few

companies going public, which when combined with the mergers and acquisitions of existing

public companies, means private capital markets are growing in value faster than public

capital markets.

Looking forward, Roden identified the significant role capital markets are likely to play in the

EU during the coming decade. Historically, capital markets haven’t been as important in the

EU as they have in the US. Banks have played a much more active role in providing the

required capital, in part because economies such as Germany have bank based financial

systems. However, since 1980, large companies have found they can borrow more cheaply

on capital markets. In 2008 the shifting preference towards capital markets from banks was

accelerated. The EU has recognised that in order to reach the targets set out in the Paris Agreement, there must be spending of 900 billion euros per year. With this being unlikely to

come from public spending alone, Roden expects capital markets will play a pivotal role in

this financing. Therefore, in the European Green Deal will provide a stage for capital markets

to flourish.


The following is coverage of the Leeds Finance Summit talk given by Duncan Meredith on the 16th of February written by Michael Keohan:

To discuss the topical issue of taxation in the post-COVID era, the Leeds Finance Summit 2021 welcomed Duncan Meredith. Duncan is an experienced Chartered accountant and tax advisor who has worked and trained within the ‘Big 4’ firms of Chartered Accountants. Duncan specialises in a range of subject areas, including – but not limited to – property tax, tax incentives and business advisory services for acquisitions, sales, and reorganisations.

What can we expect in the short-term?

The ongoing pandemic has had an unprecedented impact on the UK economy; as of December 2020, the GDP was 6.3% below the pre-pandemic levels of February 2020. The introduction of well-needed support to businesses and individuals through loans and the furlough scheme has seen government spending reach unmatched levels. But with spending comes debt, debt which must be paid off through funds raised from tax revenues. As Duncan notes, tax increases are likely; measures such as VAT, income and national insurance tax are where the bulk of taxation income comes from, and so are likely to be subjected to increases if the government is to make any real headway. More politically motivated measures, such as increased capital gains tax and increased taxation on company dividends, are other measures that likely to be explored. A more contentious measure has also discussed by some – a one-off wealth tax. With a conservative government, such a move does seem unlikely, as Rishi Sunak, the current Chancellor of the Exchequer, has himself stated that it would go against his Conservative party’s values.

The nature of incentives

Regardless of where tax increases are implemented, there is a critical balancing act that the government must scrupulously consider as the vaccine continues to be rolled out and the country moves closer to a well-anticipated return to some resemblance of normality. Taxes may increase, but it simply cannot be to the detriment of economic activity and incentives; if the economy is to pick up, businesses and consumers must be filled with confidence and optimism for the future, not burdened with unrelenting taxation and penalties. As Duncan emphasises, there is a sweet spot, a spot where the economy can boom along with considerable increases in taxation income – finding that spot is the key. Duncan himself would like to see reduced regulation to give businesses more flexibility in the pandemic's aftermath to promote economic activity. Such a measure might be one of the ways that the government can look to execute that balancing act.

What does the future hold?

In terms of the more long-term future, although less concrete, the discussion has also begun to turn to long-term measures and potential structural changes concerning the nature of taxation in the UK. The push to make taxation digital continues, with the hope that the increased efficiency and greater accuracy will transform the tax system – such a transformation could prove to be very important as the UK looks to recover from the pandemic over the coming years. Disagreement is rife, however, and criticisms of the costs of the implementation of digital taxation and potential security concerns mean that no one can be certain as to how taxation might evolve in the coming years. Although, as Duncan makes clear, there is uncertainty about the exact nature of how taxation will be leveraged in the post-COVID climate, one thing is certain; the UK faces an unprecedented situation, and effective policy is imperative to ensure a smooth transition into a post-COVID world.


The following is coverage of the Leeds Finance Summit talk given by Russel Waite on the 17th of February written by Hannah Cowling:

Sustainable Investing, what's the attraction? During the Leeds Finance Summit, Russel Waite, Director of Affinity Private Research, outlined the basics of sustainable investing and why it's so attractive right now.

Back in the 1970s, “sustainable investing” largely referred to companies investing in portfolios that excluded drugs, tobacco and other “sin stocks”. Since then, there has been a dynamic shift towards ESG and adopting this into regulation. We now have Sustainable Development Goals, and cross-country commitments to reduce emissions. The pandemic has amplified this, with companies such as Mulberry led the way by converting factories to produce PPE for the NHS. Businesses are starting to recognise their role to play in communities and societies, showing that the "business of business" is not just business, as the economist Milton Friedman thought.

What makes sustainable investing attractive right now?

The pandemic:

Covid-19 has led to the role out of massive government fiscal stimulus packages to help economies recover. A lot of these packages come with clauses that the funds are channelled into green initiatives. Consequently, this should help the “greener” firms grow, and larger emitters will have to change their processes to reduce emissions or miss out on additional government support.

The pandemic has also raised questions about consumer habits. Consumers are purchasing fewer goods, is this temporary or will this new pattern of consumerism remain post-pandemic?

Politics in the US:

Donald Trump has now left the White House and has been replaced by Biden. With new leadership comes new initiatives, and Biden is clear that his term will be focussed on boosting green technology. Where previously the US was lagging in its commitment to reducing its emissions, could Biden pave the way to be a leader in this domain?

Politics in China:

China has also recently announced its commitment to becoming net zero. More and more countries are committing to this, albeit who knows how long it could take. However, all this means that a wall of cash is heading towards firms focussed on green technology.

All these factors are leading to more investment being channelled to firms focussed on green technology. The cost of capital is coming down for sustainable businesses and increasing for non-sustainable firms.

Furthermore, the next UN Climate Change conference will be held in Glasgow, November 2021. Could this pave the way for new initiatives focussed on carbon markets? Will the carbon market become more efficient, can carbon become more realistically priced? If so, giant emitters will be left with no option but to go bust or go green.

Problems with measuring sustainability

Sustainability is becoming ever more at the front of investors’ minds; however few investors consider the full supply chain of their ESG investments. Tesla for instance produce electric cars, which may seem like a sustainable investment, but you need to consider that if you’re investing in electric vehicles, you’re investing in batteries. Batteries involve the mining of cobalt, of which the Democratic Republic of Congo is a dominant supplier, but also a country renounced for the use of child labour. Investors need to delve deeper into the fine print of investors reports to really determine the extent of the company’s sustainability.

Measuring Carbon

Emissions are currently categorised into various scopes: 1, 2 and 3.

Scope 1: direct emissions from company facilities and vehicles

Scope 2: indirect emissions from purchased energy, steam, heating and colling for own use.

Scope 3: indirect emissions from business travel, waste generated in operations, purchased goods further down the supply chain, transportation, leased assets and employee commuting to name a few.

Many companies aren’t including scope 3 emissions in their reports, for some maybe it’s because their scope 3 emissions are very large, but for others, it’s excluded due to measurement difficulties. These measurements are still in their infancy and it isn’t easy to estimate. If the figures aren’t directly available, the best a company can do is to estimate, and if estimates aren’t available, what’s left is a good guess, and if a good guess isn’t feasible is it just made up. This shows the problems with measuring sustainability and forms the foundations of arguments regarding company greenwashing.

There are very promising and lucrative returns from investing sustainably, and it’s something we should all consider more. Big developments within the sustainability space are expected this coming year, with the next largest UN conference since Paris being held in the UK this autumn.

1 comment

1 Comment

Alfie Milnes Dobbs
Alfie Milnes Dobbs
Feb 22, 2021

Great long read! Some really interesting insights here. Thanks to all the speakers.

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