This material has been prepared for informational purposes only and should not be construed as investment, legal, or tax advice. It does not constitute an offer, recommendation, or solicitation to buy or sell any security or other financial instrument, nor should any information contained herein be relied upon for the purpose of making investment decisions.
Past performance is not indicative of future results, and the value of investments may fall as well as rise. While the information contained herein is believed to be reliable, no representation or warranty, express or implied, is made regarding its accuracy or completeness.
The opinions expressed are those of the author and are subject to change without notice. They do not necessarily reflect the views or official position of the institution or its affiliates.
I have had the privilege to be associated with LGB & Co since it began business (under another name and with another business model) but since 2018 till this month they’ve provided a late-career perch for me, and I’ve done a number of jobs here, latterly as Investment Director. But all good things must come to an end and indeed all good things must start somewhere, so I am starting retirement, with a long list of other things to occupy myself, and a few things to leave with you. I look forward to remaining in touch with the firm as a client.
Alas, not necessarily wise words, and probably too many cliches. You must decide for yourselves.
Very few of the things that have stuck with me over a long career came from management textbooks. The old saws that you should avoid any company building a new headquarters, and also any whose CEO has written a book on his (and it almost always is his) management genius, have some merit. One large institutional client told me they never invested in any company whose chief executive had facial hair. The firm is still going and still independent – so perhaps that is the answer.
One of the few things that stayed with me from a largely forgotten MBA is the finding that in commodities markets, the buyers of futures as hedging instruments pay a fair price – whereas the gains made by the trading firms, and the costs of the system, are paid for by day traders, who consistently lose. So why do they do it?
When I first visited Japan and the United States in the ’80s, it hit me that retail brokerage offices were not so different in their setup to high street bookmakers in the UK – and that they catered, in part, for similar instincts. Always ask yourself whether you are making an investment or placing a bet. Placing bets is not inherently a bad choice, but the house always makes money.
I used to bemuse graduate trainees with John Maynard Keynes’ observation in the General Theory that the stock market is like a “pick the beautiful baby competition” – where the point is not to be objectively right, but to coincide with the majority’s view. In markets, that means getting there first.
Joseph Schumpeter’s theory of Creative Destruction – the process by which innovation displaces existing industries – was a valuable lens through which to understand the tech boom and bust at the turn of the millennium. It is likely to be relevant again as the artificial intelligence revolution reshapes entire sectors of the economy. One lesson of economic history is that the winners from such periods of disruption can often emerge at a considerable distance from the losers.
My own lesson is that the most important changes take many years, or even decades, to play out. The news cycle compresses and distorts our perception of time. Most of what is reported as significant on any given day is, in the long run, noise.
Even if mostly it is not. And if it is different, it will not be different in the way you expect.
Sometimes it is different in a bad way. Past results are not a guide to future performance, as the regulator repeatedly reminds us. Yet, buying on the dip, for example, has been a satisfactory way till now to cope with the market crises caused by the current US President. Perhaps next time it will not be. The more frequently a particular response to a market development has worked, the more likely traders are to repeat it. That does not mean they are right.
Mining is one of the oldest professions. Some seams remain productive for centuries. In other cases, miners hit unexpected geological difficulties – faults, or simply a seam becoming exhausted. Their skills are transferable, though they may not recognise the need to “get on their bikes”.
So it is with many businesses. A business looks durable – and then an internal flaw or external competition cuts away at its foundations. Sometimes it can adapt. Sometimes it is doomed. Managers will often attempt to diversify and spend their way out of trouble. Not all of them have the skills to do so. Look out for fatal flaws.
One seam that consumed much of my career, stockbroking, seems to have finally run its course. Till recently investment firms could expect to get paid for raising capital, for providing liquidity, and for advising investors. The provision of advice, now hemmed in by regulators, and eroded by the internet providing access to financial and corporate information which were formerly the exclusive domain of analysts and specialists, is now barely recognisable as a business.
Keynes’ investment career was broadly divided into two periods. In the first, he tried to use his considerable economic and geopolitical insights to make global macro-economic investment decisions. It did not work. Later, he used his contacts and network to make much more stock-specific investments. It worked extremely well. This was, of course, before insider trading became an offence.
Knowing something about a company or market that the broader investment community does not know or fully understand need not break any rules. Particularly with smaller companies, information is simply not well disseminated. With large companies, breaking from the consensus can be very difficult.
Al Capone was ultimately brought to justice not for his crimes, but for falling foul of the Internal Revenue Service. Cryptocurrency (possibly not stablecoins, we shall see) has as its primary use cases money laundering, the evasion of exchange controls and sanctions, and the facilitation of illicit transactions. All estimates of the rate of declaration of cryptocurrency profits point in the same direction: massive under-reporting. This will not continue indefinitely.
The Tax Man, however, finds it easiest to target things that cannot be hidden or moved. The UK’s tax regime for housing became highly favourable following the abolition of domestic rates in the 1980s (rates were a tax on imputed rental income, so effectively on the property value). The “mansion tax” can be safely assumed to be the thin end of the wedge.
The Tax Man also comes for savings. Long-term returns tend to be quoted without considering the large proportion that must ultimately be surrendered – make sure you make the best use of tax shelters such as ISAs.
Mean reversion is a two-edged sword. It does not guarantee that prices will return to any historic mean, since the mean itself continues to adjust to new price levels. Take the housing market. Commentators have long looked at the ratio of earnings to house prices, hoping for a return to a long-term norm – but it has been a consistently hopeless guide.
Outcomes are rarely driven by single variables. House prices have been shaped not just by income, but also inter alia by the cost of mortgages, the prevalence of dual-income households, planning constraints, net immigration, and taxation. Distrust easy explanations. That said, a significant change in a single important variable can on occasion make all the difference. So maybe taxes will restore housing prices.
The way analysts construct forecasts is almost structurally doomed. They are required to follow management guidance in the short term – either because of commercial relationships or to preserve access. For small companies the research generally comes from an analyst employed by the company’s corporate broker. The job of the analyst is best understood as being to get the company’s message out rather than to do independent research, though some try. That does not mean analysts do not understand what is happening. Some do. They are simply not always free to say so when the picture is unflattering.
For the longer term it is inherently difficult to project with confidence, irrespective of any lack of impartiality on the part of the analyst.
No forecast can be more accurate than the least accurate of the assumptions used to generate it – and most of the assumptions made are tenuous. Scenario analysis would be far more valuable, as would reverse modelling: asking what needs to be true for the current share price to be justified, and whether those conditions are plausible. Sadly, that is not how the industry works – but you can always ask the questions yourself.
Stock market valuations are the result of sentiment, not the cause of it. Investors do not, as textbooks sometimes suggest, sell stocks because they are expensive or buy them because they are cheap. Stocks are expensive because investors want to buy them, and cheap because they do not.
And when a stock stays cheap for too long, someone outside the market will eventually notice and act – a competitor, a private equity firm, the management itself. This “reality arbitrage” is, however, less reliable for small companies, where the frictional costs of a transaction are disproportionate to the size of the prize.
Money does not go into or out of shares. It is lazy journalese. If new shares are issued or shares are bought back then at the margin it is true. But otherwise there is a seller for every buyer and vice versa.
The last few years spent among small companies has been quite frustrating. Consistently over-optimistic projections, dozy analysts, and even dozier chairmen (and it is almost always men) are common, as are the cash requirements of growth turning out to be far larger than anticipated.
Large companies are not small companies’ friends. They are content to lead smaller businesses on with the promise of a significant contract just around the corner, effectively using them as free outsourced R&D. The costs in management time of buying small companies vs the returns are disproportionate. If they lend them money then the terms will be onerous.
Governments are similarly unreliable partners. If the money has started to flow, great (think the Help to Buy scheme) but commitments are easy to make, delivering on them much harder. And delivering on them on a timely basis rarely a priority.
And the institutions are not small companies’ friends. Despite the government’s desire to see more institutional investment in SMEs (and including, implicitly, AIM) there’s little sign of it happening. There are relatively few institutions left fishing in the AIM pool, and they have little in the way of inflows. The biggest names in investment management are too big to bother. The patient capital ship, whilst good in its purpose, was holed beneath the waterline by the Woodford Affair. VCTs are capped in the size of companies they can invest in so cannot make follow-on investments (this is being eased a little).
Waiting for a company to prove its value proposition may well mean that you pay more for it. But you will be paying for something that has been at least partially de-risked, and is consequently more valuable to potential acquirers and partners. Sometimes that also coincides with the last dip in the EIS pond, and with the rise in the EIS limits that may make using the scheme more attractive.
Some fund managers seem consistently good at reading the investment climate and capitalising on new developments. Others simply follow. But even the best can and do lose their sense of direction – and once things stop working, they can find themselves in an increasingly difficult position, trapped by their own marketing pitches and reluctant to admit that a change of course is needed.
Some fund managers deliver “what it says on the tin”, even when that promise was never market-beating performance, but perhaps an absolute positive return irrespective of market performance. If they fail to deliver even that, something has gone seriously wrong.
Once a manager becomes a cult figure, or promoted by the investment platforms, look out. Unless it is Warren Buffett. And he is now 95 and no longer running Berkshire Hathaway.
My career, since the early ’80s has has been shaped by a long decline in inflation and interest rates; by globalisation and the emergence of China, India and other formerly developing economies into the first rank of the world economy. It has seen the collapse of the Soviet Union, a peace dividend – rather heavily overdrawn upon – and the reabsorption of most of Eastern Europe into the market economy. It has seen huge technological change. And through all of that, it has been a good time to be an equity investor.
Some of that has now changed. Whether artificial intelligence will ultimately be a destructive or a positive force remains genuinely unclear. The consensus view is that climate change will be a net negative. The period of unquestioned political and economic dominance of the US appears to be behind us. In the UK, we are competing for the world’s resources and products on the basis of a service economy, having stepped back from the industrial and resource base that underpinned our prosperity for much of the last century. We are led by a political class and civil service that has consistently ducked the hardest decisions.
So… it would be unwise to assume that because recent decades have been largely benevolent for investment returns, that will continue to be the case. Do not risk what you cannot replace. Do not assume that growth will continue. Diversify – geographically, by asset class, by currency.
Good luck!
Transaction Manager
Alexia Rottet joined LGB in October 2025 as a Transaction Manager. Prior to LGB, she gained real estate experience by participating in the valuation of a property portfolio for A2immo.ch SA as a financial analyst, as well as working at Form Structural Design as an office manager. Alexia holds an MA in Entrepreneurship and Innovation and a BA in International Relations.
Relationship Manager
Ruby joined LGB in December 2024 as an Assistant Relationship Manager for our investing clients. She is responsible for all day-to-day transactions with investment clients and oversees the LGB Investments Platform and Deal Hub. Prior to LGB, Ruby worked at FHIRST, a start-up where she collaborated with the co-founders on revenue growth and improving client experiences. Ruby graduated with a First-Class degree in History from Durham University, and has obtained the CISI Level 4 Diploma in Investment Advice.
Finance Manager
Following a degree reading Chemistry at The Queen’s College, Oxford, Antonia trained to become a chartered accountant at a London-based audit firm. She then moved into the tax sector joining EY and completing the chartered tax adviser qualification. She then gained further experience working as a finance director within industry at a family office / hedge fund.
Programme size: £20m
Establishment Date: December 2017
Number of issues: 12
Sector: Marine tracking
Focus: Maritime surveillance and management
Programme size: £25m
Establishment Date: XX 2017
Number of issues: 20
Sector: Financial services
Focus: Loans and leasing
Associate Director
Omar joined LGB in February 2026 as an Associate Director in the Capital Markets team. He brings over five years of experience from NatWest, where he worked across the Leveraged Finance Origination and Portfolio Management teams. During this time, he supported a broad range of businesses from venture-backed to large-cap companies, with a primary focus on the mid-market. His experience was sector agnostic, and the majority of the companies he worked with were sponsor-backed, giving him extensive exposure to private equity-led transactions and capital structures. Omar holds a degree in Accounting and Finance from The London School of Economics & Political Science and is a Chartered Banker.
Adviser
Charles has played an important role in developing LGB & Co.’s investment approach by encouraging a focus on investing in businesses with strong IP or know-how with recurring revenue business models that can prosper throughout economic cycles. Charles brings over 30 years’ experience of investing in privately-owned and publicly-listed small and mid-market companies. He is a director of Larpent Newton & Co. and Hygea VCT plc. Charles qualified as a Chartered Accountant at Peat Marwick, now part of KPMG.
Adviser
Lisa has worked with LGB since 2015 in supporting the on-going cultural and organisational development of the firm, providing advice on strategic people matters. Since 2006, Lisa has been running her own consultancy and executive coaching business, People Possibilities Ltd. Her work is focused on supporting clients at an organisational, team and individual level to enable high performance,improve leadership capability and effect cultural and behavioural change. Previously Lisa has held senior HR leadership positions with Schroders, ABN AMRO and HSBC. Lisa graduated from the University of Birmingham with an honours degree in International Relations & French. She is a Fellow of the Chartered Institute of Personnel and Development (CIPD) and a qualified Executive Coach.
Chairman
Simon became non-executive Chairman of the Board of LGB & Co. with a focus on growth and strategic initiatives in December 2025. Simon has extensive experience in capital markets and wealth management. He previously ran the client and investment business of Heartwood and became Chief Executive in 2008. He led its well-regarded acquisition by Handelsbanken in 2013. Simon subsequently became NED and Chair of AIM-listed WH Ireland Group PLC. He was also asked to represent the wealth management sector on the FCA Smaller Business Practitioner Panel from 2013-2016.
Associate Director
Megan joined LGB in 2021 as a Relationship Manager. She is responsible for all day-to-day transactions with investment clients and oversees the LGB Investments Platform and Deal Hub. Prior to LGB, Megan worked at Puma Investments, a tax-efficient investment provider, in the sales and investor services team. Megan graduated from the University of Bath with a Bachelor of Science degree in Psychology, and has obtained the CISI Level 4 Diploma in Investment Advice.
Managing Director
Simone joined LGB in 2012 and is responsible for LGB & Co.’s business with institutional investors, wealth managers and sophisticated private investors. Simone’s team provides access to a range of compelling investment opportunities with a particular emphasis on structuring laddered portfolios of fixed income. In addition, the team manages portfolios of clients who have entered into advisory agreements with LGB Investments, and advises the fund managers of the Guernsey-based LGB SME Private Debt Fund. Prior to joining LGB & Co., Simone worked in the institutional fixed income department of Citigroup Global Markets. She began her career at Citigroup Private Bank in Geneva. Simone graduated from the University of Lausanne with a degree in HEC, Business Administration. She is a Chartered Member of the Chartered Institute for Securities & Investments and a Director of LGB.
CEO
Cedric was appointed CEO in July 2022 after a period of 18 months as a COO. Cedric spent 15 years working on the energy and commodities sales and trading desks for global banks (BNP Paribas, BAML and MUFG). He gained extensive international exposure, being based in London and Singapore and covering transactions in all geographic regions. Cedric graduated from Global Executive MBA at INSEAD in 2018 and started working in the capital markets space for growth-stage companies. He is also a director of LGB.
Managing Director, Capital Markets
Andrew founded LGB & Co. in 2005 and is managing the Capital Markets team. He has a particular focus on the development of strategic relationships with corporate clients and business partners. Prior to founding LGB & Co., Andrew was a Managing Director at Citigroup Global Markets, where he was responsible for its fixed-income business with private banks and retail institutions. Earlier in his career Andrew worked at Schroders in London and Tokyo. Andrew graduated from Oxford University with a degree in Modern History. He is a chartered member of the Chartered Institute for Securities & Investment.