Buoyant: Julia Hoggett, at the top of the London Stock Exchange
She is diminutive, elegant and soft-spoken, but Julia Hoggett, head of the London Stock Exchange, is pulling no punches in the battle between global stock exchanges to attract listed companies worth billions of pounds.
‘You should assume we’re after everything. We fight for everything,” she says.
The London market has been losing to its rivals, particularly Wall Street, as companies have defected or opted to list elsewhere.
The next few months could be a turning point. A successful float from Chinese retailer Shein is planned. There is speculation that the diamond company De Beers and Boots, the chemist, could follow his example. If London can attract these companies, perhaps it can begin to regain former glories.
Hoggett, who is leading the city’s fight, is an advocate for diversity. As the first lesbian boss on the exchange, she’s nothing like the blue-blooded alpha males who have traditionally run the Square Mile.
But she is also the daughter of Baroness Hale, once Britain’s most senior judge, and that record shows there is still much to do, she admits.
She says, “Because I’m a woman, I’m a mother, and I’m openly gay, I’m often held up as some kind of big proof that we’ve figured it out.”
“I’m proof that we haven’t made it because I come from a very privileged background.”
Hoggett, a Cambridge graduate, had a career that took her from JPMorgan, through a spell in Dublin at the Depfa bank, and back to London at the Financial Conduct Authority, the city’s regulator. She took over at LSE three years ago.
Today, after a dry spell in the stock markets – and Hoggett emphasizes that this is a global phenomenon – he says things are improving for the first time in years.
He will not publicly name the companies he has been courting to list their shares in London.
But she says: “We are clearly seeing the pipeline starting to be built and that is cause for optimism.”
She is dismissive of the negativity some have about London: how stocks listed here are undervalued and how the market is in turmoil as companies flee to foreign climes.
In response, he launches a barrage of statistics and counterarguments. Much of New York’s performance comes from the “magnificent seven” tech stocks: Apple, Microsoft, Amazon, Alphabet, Facebook-owner Meta, Nvidia and Tesla.
Excluding them, London’s performance has been in line with New York’s S&P 500.
Some of the companies that have left did so, he says, for reasons specific to their business rather than as part of a general exodus.
Hoggett bristles at the idea that British companies are doing better on Wall Street, saying: “The grass is not always greener.” More statistics are listed: of the 20 UK companies that have listed in the US in the last ten years, eight have already delisted. Only four are trading above their IPO price. The rest have dropped on average more than 80 percent.
Hoggett points out a list of disadvantages for companies seeking their fortunes on Wall Street, including being required to report to the market every quarter instead of twice a year. There is also a culture of litigation in the United States, where companies face “far more” class-action lawsuits.
Not only that, but there are more costs, including higher fees for bankers, he says, adding: “So the simple reality is that it is not a simple exercise in the United States and it is more expensive.”
However, is the simple fact that New York-listed companies command higher valuations?
“No,” Hoggett insists. US indices such as the Nasdaq are heavily biased towards technology companies, which tend to trade at a high multiple of their earnings. But if you look at comparable comparisons of companies in the same sector, the valuations are no different.
But perceptions are hard to change and Hoggett says he has to spend a lot of his time “busting myths”.
“I’m not going to go into the details,” he says, “but it’s fair to say that my team and I speak to numerous companies and their advisors across the market all the time.”
All capital markets, including London, face the challenge of companies going private to raise funds, says Hoggett, arguing that the UK is also undergoing “the biggest reform agenda in a generation”.
Those changes include the simplification of listing rules, as well as a landmark agreement between large pension funds to allocate billions of pounds to investments in growing British companies. This means the UK is making changes to address looming problems “unlike the US”, she says.
Why should we care that British companies continue to be listed in Britain? He argues that to be successful in the United States, companies need to move most of their operations there. This risks being detrimental to employment and research in the UK.
What do you think of those who think London should not open its doors to companies like the Chinese fast fashion group Shein, rejected by US authorities due to accusations of forced labor? Will that make the UK the “last resort” for companies with dubious track records?
Hoggett doesn’t comment on individual companies, but says the argument doesn’t make sense. Any company that wants to list in London and meets its standards should be able to do so, he maintains.
He also says that the stock market is not just about floats.
It cites capital raising, such as National Grid’s £7bn rights issue, which will be the largest of its kind in the world in the second quarter.
“A listing is for life, not just for Christmas,” is how he sums it up. London, he says, is on par with anywhere else in enabling businesses to get the capital they need.
He refuses to talk about politics. But her long-standing views on diversity appear to put her at odds with Business Secretary Kemi Badenoch, who has urged regulators to quash a proposal to impose equality quotas on financial firms.
He does not comment directly on Badenoch’s views, but says there are “remarkably talented” people who have not been given “the opportunity to flourish.”
His mother, Baroness Hale, was at the center of one of Britain’s biggest political storms, when she led Supreme Court judges in a 2019 ruling that the Government had acted illegally by suspending Parliament in the term prior to Brexit.
Hoggett says she’s privileged to have had a “front row seat” to her mother’s career, adding, “Seeing how my mom has dealt with these things, I hope a little bit of it has rubbed off on me.”
She and her partner live on the same street as her mother in London, which “is very helpful,” she laughs. Her own domestic affairs are divided between London and Dublin, where she goes every other weekend to see her children with her ex-partner (and she has been doing so for the last 14 years).
“You are committed to your children because your children are wonderful human beings and their responsibility is how your life is structured.”
How do you spend your free time? Golf and, having grown up in Manchester, supporting Manchester United, although that, he says, “doesn’t relax me much.”
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