[ THE US VS THE UK ]
Trust , believe it is not the UK ’ s education system that is the problem , pointing out it has some of the best universities in the world . This is backed up by The Times Higher Education World University Rankings , which last year placed Oxford and Cambridge at numbers one and three on its list , with Imperial College London at number 10 . Anderson aims to find the small number of companies responsible for the majority of stock market returns over the long term , which he has done with great success : his trust is up 857.98 per cent over the past decade . It is not a good sign then that he has just 1.3 per cent of his portfolio invested in the UK , compared with 55.3 per cent in North America . He says the reason for this “ is really uncomfortable for us all ”. “ We did not think it was possible to build a portfolio of great growth potential from what was available in the UK ,” he explains . “ We do not think there has been any record for the last 100 + years of British companies being able to scale up . “ The example I often point to is gene sequencing . The core technology that Illumina – which for ages has been one of our top-10 holdings – is built on was invented in a pub in Cambridge . But the inventors could not turn it into a commercial entity . They lacked developmental skills , they lacked scaling skills , they lacked financial support , they lacked marketing support .”
A helping hand A lack of financial support is the most frequently cited reason by fund managers as to why UK businesses struggle to scale up . Penny contrasts this with the US , which liberalised its pension structure in 1979 with the passing of the ERISA Prudent Man Rule , allowing pension schemes to invest in venture capital . Along with a cut in capital gains tax , this led to the amount allocated to this area of the market to increase from $ 68m in 1978 to $ 5bn in 1983 . “ But in the UK , defined benefit pension schemes have been regulated into reducing equity exposure ,” adds Penny . “ One of the problems in a lot of common financial structures , such as unit trusts , is we are insisting that if you buy a share in the morning and can ’ t sell it in the afternoon , you ’ re not allowed to own it . “ This has been to protect consumers and that ’ s a good thing , but within the UK the problem is companies that are between £ 50m and £ 500m are struggling to access capital . This is important because they will be the ones that will employ your children and grandchildren .” trustnet . com