Major US investor criticises Britain for lack of tech champions

Superstar fund manager Cathie Wood has criticised the UK, saying capital markets are not “deep enough” to create a tech giant.

Wood, who runs hedge fund firm Ark Investment Management, has raised alarm bells about Britain’s investment landscape compared to the US.

“Their education system is exemplary, and yet I think what’s happening is that their capital markets are not deep enough and not incentivised enough,” he told the BBC’s Today programme.

“In the US, we are big proponents of tax incentives for innovation, encouraging founders to take risks,” he added.

Wood is best known for making big bets on cutting-edge companies and was touted as one of Wall Street’s best stock pickers during the pandemic.

But his comments add to ongoing criticism that the UK market is lagging behind its international rivals.

While the government supports startups through grants and funding programs, the US has a larger pool of investors and offers tax breaks to budding entrepreneurs. Companies also tend to command higher valuations across the Atlantic.

The UK tech scene has also come under pressure following several high-profile setbacks.

The Britishvolt project failed to get off the ground last year, dealing a blow to those hoping the project would make the UK a world leader in the production of batteries for electric vehicles.

Betting house owner Paddy Power Flutter also moved its primary listing to New York earlier this year, and British chip designer Arm opted to list on Wall Street last August after the government failed to persuade it to list in London.

Others are also set to leave the UK after being taken over. FTSE 100 group Hargreaves Lansdown recently agreed to a £5.4bn takeover from a consortium including Abu Dhabi’s sovereign wealth fund, and cybersecurity group Darktrace backed a £4.6bn takeover from US private equity firm Thoma Bravo.

Despite the problems facing the country, Wood, 68, said “some of the biggest companies have emerged from the UK” and there was “fertile ground” for change.

His comments also come in the same week that US chipmaker Nvidia posted its latest set of record results. Second-quarter figures, published on Wednesday, showed profits rose 168 per cent to £12.6 billion and sales increased 122 per cent to £22.8 billion.

In February, it became the fastest company to rise from a stock market valuation of $1 trillion to $2 trillion. Today, with a valuation of more than $3 trillion, it is among the elite of American technology stocks.