20VC with Harry Stebbings• Mar 28, 2025• 48:08Interview

Julia Hoggett, CEO @ LSEG plc: The Myths and the Reality of The London Stock Exchange

From 20VC with Harry Stebbings

Julia Hoggett•CEO, LSEG plc

Executive Summary

The UK possesses the fundamental ingredients for a world-leading capital market—including top universities, a thriving startup scene, and the world's second-largest pool of institutional capital—but has been held back by past policy decisions.
Historical pension reforms inadvertently de-risked institutional portfolios, disconnecting a vast pool of domestic savings from the UK's growth economy.
This is now being actively reversed through initiatives like the Mansion House Compact.
The speaker argues that the narrative of UK companies needing to list in the US for liquidity is flawed, citing data on the poor performance of UK firms post-US listing and underreported liquidity on the London Stock Exchange.
A strategic shift is underway from prescriptive, cost-focused regulation to an 'outcomes-based' model, aiming to foster innovation, improve investor returns, and channel risk capital into the domestic economy more effectively.

10 quotes

Concerns Raised

Past policy mistakes, like pension reforms and stamp duty, have created deep-seated structural problems that are only now being addressed.
The UK's regulatory culture has been overly focused on cost-minimization and risk-aversion, stifling investment in growth assets.
UK investors and pension funds are missing out on the wealth creation of domestic technology champions like Arm that choose to list abroad.
A perception that London may be losing its competitive edge for attracting top tech talent due to regulatory hurdles and high living costs.

Opportunities Identified

Unlocking the UK's vast pool of institutional pension capital for domestic investment through reforms like the Mansion House Compact.
Consolidating thousands of small pension funds to create scaled, sophisticated investors capable of allocating to private markets and growth equity.
Reforming the regulatory framework to be 'outcomes-based', which could spur innovation and make the UK a more attractive place to start and scale a business.
Reversing EU-era rules (MiFID II) to improve the investment research ecosystem, especially for small and mid-cap companies.

Key Themes

Reconnecting Capital Markets with the Domestic Economy

The UK's financial sector has historically focused on its global role, sometimes neglecting the domestic economy. Past pension reforms and regulatory choices disconnected society from its own capital markets, starving UK companies of risk capital. The current push is to reverse this and create a 'flywheel' where domestic savings fuel domestic growth, innovation, and jobs.

This theme is crucial for understanding the strategic shift in UK economic policy, which aims to leverage its vast financial services sector to boost national productivity and competitiveness post-Brexit.

The Perils of a 'Cheap is Good' Mentality

A regulatory and cultural focus on minimizing costs in financial services, particularly pension fees, has been counterproductive. This has led to lower net returns for pensioners and a de-risking of investment portfolios away from growth assets. The argument is that a focus on 'value' and performance, even with higher fees, ultimately benefits investors and the economy, mirroring successful models in Canada and Australia.

This challenges the conventional wisdom that lower fees are always better for consumers, highlighting the importance of aligning incentives for long-term value creation in asset management and retirement planning.

Outcomes-Based vs. Prescriptive Regulation

The discussion critiques overly prescriptive, 'checkbox' regulation that can lead to unintended negative consequences, such as stifling innovation or disenfranchising retail investors. The speaker advocates for an 'outcomes-based' approach, where regulators define the desired goal (e.g., a well-funded retirement system that invests in the economy) and allow flexibility in how it's achieved.

This represents a significant philosophical shift in financial oversight, aiming to make regulation more dynamic and effective in fostering both market integrity and economic growth.

The UK vs. US Listing Debate

The speaker directly confronts the narrative that UK companies must list in the US for superior liquidity and valuation. She presents data showing poor post-listing performance for many UK firms in the US and argues that London offers comparable liquidity (when measured correctly), immediate index inclusion for large IPOs, and a more favorable fee structure. The case of Arm is used to highlight how UK investors miss out when domestic champions list abroad.

This provides a data-driven counter-narrative to the prevailing story of capital flight from London to New York, offering a strong case for the competitiveness of the UK's public markets.

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Topics

UK Capital Markets London Stock Exchange (LSE)Pension Reform Mansion House Compact Defined Contribution Schemes Financial Regulation Outcomes-Based Regulation MiFID II Stamp Duty IPO Listing Venues US vs UK Markets Institutional Capital Risk Capital Fintech

Processed Mar 29, 2026 yt-dlp + mlx-whisper + Gemini