Top US investor criticises Britain for lack of tech champions

Fund superstar Cathie Wood has criticised the UK, saying its capital markets are not “deep enough” to host a tech giant.

Wood, who runs investment fund Ark Investment Management, has sounded the alarm over the UK investment landscape compared to that of the US.

“Your education system is exemplary, but I think your capital markets are not deep enough – or don’t provide enough incentives,” she told the BBC’s Today programme.

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

Wood is best known for his big investments in groundbreaking companies and has been seen as one of Wall Street’s top stock pickers during the pandemic.

However, her comments add to ongoing criticism that the UK market is lagging behind international competitors.

While the government supports start-ups with grants and financing programs, the US has a larger pool of investors and offers tax breaks to early-stage entrepreneurs. Companies also tend to get higher valuations across the Atlantic.

The British tech sector is also under pressure due to several high-profile setbacks.

Britishvolt failed to get off the ground last year, dealing a major blow to those who hoped the project would make the UK a world leader in electric vehicle battery production.

Bookmaker Paddy Power owner Flutter also moved its primary listing to New York earlier this year, while British chip designer Arm decided to list on Wall Street last August after the government failed to persuade the company to list on a London stock exchange.

Others will also leave the UK after being acquired. FTSE 100 group Hargreaves Lansdown recently accepted a £5.4bn takeover from a consortium including Abu Dhabi’s sovereign wealth fund, while cybersecurity group Darktrace backed a £4.6bn takeover by US private equity firm Thoma Bravo.

Despite the country’s challenges, Wood (68) said “some of the best companies come from the UK” and there was “fertile ground” for change.

Her comments also come in the same week that US chipmaker Nvidia reported its latest record results. The second-quarter figures, released on Wednesday, showed profits rose 168 percent to £12.6 billion and revenue rose 122 percent to £22.8 billion.

In February, it became the fastest company to go from a $1 trillion market cap to a $2 trillion market cap. Today, with a value of more than $3 trillion, it is ensconced in the elite group of U.S. tech stocks.