Hitting the ground running: The first 100 days
Hitting the ground running: The first 100 days

Posts Tagged ‘investor services’

Critical investment for critical minerals

The proverb goes ‘when everyone is digging for gold, it’s good to be in the pick and shovel business.’ If the energy transition of the 21st Century bears any semblance to the 19th Century gold rush that spurred the Industrial Revolution, what then are today’s picks and shovels that investors can capitalise on? The answer… critical minerals, such as lithium used in batteries or graphite used in aerospace applications and nuclear power plants.

Why? Because reaching the goals of the Paris Agreement will require a fourfold increase of current minerals inputs for clean technologies by 2040 and hitting the global Net Zero target by 2050 will require a sixfold increase of mineral inputs by 2040. Or rather, an increase from 7 million tonnes to 27.3 million tonnes for the Paris Agreement and 42.9 million tonnes for Net Zero targets. Perhaps more alarmingly, stated policy measures drastically fall short of future demand and a lack of critical minerals risks the great energy transition that will define this century all together.

The current UK state of play is intensely risky due to global trade concentration and near exclusive reliance on imports. Of the 26 critical minerals measured against global supply risk and UK economic vulnerability, only titanium scores a ‘low criticality’, 6 score ‘elevated criticality’, and the remaining 19 critical minerals score ‘high criticality’. As key ingredients in a clean and green future, the UK is heavily exposed to a market where the top three producer countries (China, South Africa and Brazil) control between 73% and 98% of total global production of at least 18 of these critical minerals – perhaps more exposed compared to the supply chains disrupted by the Covid-19 pandemic.

Government thinking about critical minerals began in 2010 when a trade dispute between China and Japan led to raw earth mineral prices quadrupling. Although China was able to demonstrate its market dominance, it wasn’t until 2021 when UK policymakers turned their thinking into concrete policy ambitions; somewhat late to the game compared to the US which began providing direct investment in production facilities in 2018.

The Integrated Review of Security, Defence, Development and Foreign Policy (currently being revised after failing to anticipate Russia’s invasion of Ukraine) was published in 2021 and quickly followed by the Critical Minerals Strategy in 2022. A Critical Minerals Expert Committee and Intelligence Centre were created in 2022 for advisory and knowledge sharing purposes, as well as a set piece funding announcement for the world’s first refinery hub, a midstream process for refining raw earth materials, powered entirely by offshore wind.

This step change by government in setting out its high-level intentions and policy ambitions is welcomed by investors. One investor told WA that “the government strategy is required because all the capacity is currently in China who are well established… and for the UK and Europe to suddenly compete you have pile in a lot of investment.” Or in the words of another industry expert, the challenge now is “…figuring out if this signpost will actually lead to pots of gold.”

A repeated concern of the Critical Minerals Strategy is an absence of deliverables and detail. It only goes part way in providing the necessary ‘enabling environment’ to attract greater private sector investment. The government already offers a range of funding pots from which the critical mineral sector can draw, such as the Automotive Transformation Fund (up to £850m) or the UK Infrastructure Bank (up to £22bn). However, if the government is truly serious about the UK’s vulnerability in the critical minerals game it will need to significantly step-up funding, its mechanism of distribution, and reform some of structural market barriers, such as the permitting and planning process for domestic extraction. Doing so will unlock private sector activity, capital and finance across the sector from exploration, extraction to refinery both at home and from abroad. It will also crucially, de-risk investment as government policy and funding aligns ever closer with new investment opportunities.

Resolving the critical minerals conundrum will require the same approach adopted for the British success story of ‘going for wind’ in the energy market. Government support since the early 2000s in cultivating, developing, and expanding wind turbines installed offshore has established the UK as the global leader in offshore energy. Central to the government’s approach was a clear partnership with private sector finance, working together in transforming a now maturing market where electricity generated from wind power increased by 715% from 2009 to 2020, generating almost £6bn in turnover in 2019. Government support matched its rhetoric, in turn boosting investor confidence and investment opportunities in offshore wind. As for critical minerals, the sector is, comparatively speaking, at the cultivation stage and whilst government rhetoric provides much needed clarity, funding will need to speak louder than words.

We can expect to hear more from both main parties ahead of the next general election. Investors should ready themselves for a government delivery plan in the coming months which will provide further detail and timeframes, as well as a national-scale assessment of critical minerals collating geoscientific data by March 2023 – crucial for spotting domestic investment opportunities. Beyond the next general election, critical minerals will be a priority for government whichever political party wins. Just as supply chain resilience is a particular concern for the current Conservative government, critical minerals will also be an indispensable ingredient of Labour’s flagship ‘Green New Deal’.

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The UK and India Trade Agreement: Bottom’s up!

Having conceded that a trade deal with the US is unlikely to materialise while Biden remains in the White House, the government has shifted its focus to striking deals with other big economies at speed before the next election. As Trade Minister in the Truss government, Kemi Badenoch, had reportedly been told that her priority was to secure a free trade agreement with India in time for Diwali (24 October), the deadline set by India’s Modi and Truss’ predecessor, Boris Johnson. The deadline has passed without any deal being finalised.

Investors are, however, particularly optimistic about what a trade deal with India could mean for the Scotch whisky industry, which has dominated the negotiations so far. No other nation drinks as much whisky as India but thanks to tariffs of 150% on imported liquor, Scotch whisky currently accounts for just 2% of the market. The impending deal ought to be music to the ears of Scotland’s world-famous industry and is looking especially rosy for beverage company Diageo plc, which owns over 200 drinks brands with sales in over 180 countries, including the world’s bestselling Scotch whisky brand Johnnie Walker. If the rumours are true that the UK is on the cusp of securing a cut to India’s steep tariff on imports, Citigroup has predicted that Scotch sales could rise by as much as US$ 2.9 billion.

But there’s a catch.

India may well be prepared to slash the federal whisky tariff, but Delhi’s negotiators are using it as leverage to get what they want out of the deal. In the latest plot twist, India threatened to apply $247 million of retaliatory tariffs on Scotch and other industries if Britain refuses to abandon controversial safeguards, it put in place to protect its domestic steel industry. This approach is not dissimilar to the one India took with the US – also over steel.

Publicly, the UK’s trade department says it will “only sign when we have a deal that meets the UK’s interests.” Though, privately, insiders are reportedly acknowledging India’s “dirty tactics” to push the UK into a deal that is expected to focus on eliminating goods tariffs.

Meanwhile, the UK’s services sector is having doubts that the trade deal will benefit British firms at all. In August, several business associations, including representatives from the financial services, pharmaceutical, tech and chemical industries, voiced their concerns about the speed of the talks and what could meaningfully be agreed in the time. Though we do make a lot of whisky, the UK remains overwhelmingly a service-based economy and securing strong protections for intellectual property rights and the free flow of data between the two counties were key objectives for the deal set out in the UK’s strategic approach for talks. Yet data looks to be a major roadblock to landing a deal that secures big wins for the UK’s services giants. David Henig, director of UK trade policy at the European Centre for International Political Economy, has concluded that the deal is set to be “predominantly a fairly narrow set of tariff reductions rather than anything significant that will change the cost of doing business in India for UK companies.”

The services sector has made a direct plea to the Indian government via the UK India Business Council to unravel the bureaucratic red tape that is regularly prohibitive for investors looking to set up or expand operations in India. The Council has urged India to take a broader view of priority sector lending norms for foreign banks operating in India and sought equitable tax treatment, while also flagging the increase in counterfeit product sales through e-commerce platforms as a deterrent for intellectual property owners. Even with tariff cuts on Scotch, the whisky industry has warned that a host of bureaucratic barriers will prevent the reduction from being worthwhile. Whether the Indian government takes heed, either as part of or alongside the trade agreement, is currently unclear.

The negotiations are also the source of some tension within the government. The Indian government is pushing for a significant liberalisation of visa routes for workers and students as part of the trade deal. Although some senior cabinet members may be supportive of relaxing immigration rules to help businesses fill vacancies, Badenoch (alongside Home Secretary Suella Braverman) are previously understood to have opposed proposals for a ‘freedom of movement’ agreement. How this plays out over the next few weeks is uncertain but the latest iteration of Conservative government is likely to be tentative about pushing through anything too unpopular with voters.

The Queen’s death has also added an unexpected dimension to the trade negotiations, with the debate about the Koh-i-noor diamond reignited. Shortly after her death was announced, ‘Kohinoor’ started trending on Twitter in India. The diamond, one of 2,800 stones set in the crown made for the Queen Mother which Camilla is set to wear at King Charles’ coronation, is the 105-carat oval-shaped brilliant proverbial jewel in the crown. Believed to be mined in modern-day Andhra Pradesh between the 12th and 14th centuries, the earliest record of its possession puts it in the hands of the Mughals in the 16th century. The East India Company acquired the stone in the late 1840s from 10-year-old Maharajah Dunjeep Singh. The company presented it to Queen Victoria and it was placed in the Queen Mother’s crown in 1937. The Koh-i-noor has been among the British crown jewels ever since, but governments in Iran, Afghanistan, Pakistan, and India have all laid claim to the diamond.

In 2016, the diamond was at the centre of a court battle after an NGO filed a petition asking the court to direct the Indian government to secure its return to India. At the time the solicitor-general, representing India’s government, said the diamond was a gift to the East India Company and it was “neither stolen nor forcibly taken.” However, the government later U-turned and said it would make all possible efforts to return the diamond to India amicably.

It is not publicly known if, or to what extent, the diamond has formed part of the trade negotiations. The strength of feeling among the people of India about the cultural significance of the diamond, combined with the UK’s weakening position in negotiations, have led many historians and political commentators to postulate that it might be India’s final trump card to play.

If you would like to discuss the India trade deal in more detail, please contact our policy specialist Thea Southwell Reeves on

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WA Investor Services supports ECI and Bionic on its exit to OMERS Private Equity

WA’s Investor Services team is very pleased to have advised ECI and the Bionic management team on its successful exit to OMERS Private Equity.

Bionic is the leading marketplace in the UK for SMEs services, using its team of tech-enabled experts to match businesses with the best business energy, insurance, connectivity, and commercial finance solutions.

Using our unrivalled network of senior policymakers and officials in the UK, WA provided an in-depth analysis of the diverse markets in which Bionic operates, demonstrating the strength of the business’s approach in meeting its customers’ needs in a complex political and regulatory environment.

Commenting on the deal, WA Partner and Head of Investor Services Lizzie Wills said: “It has been a pleasure to work with ECI and the exceptional Bionic management team on their successful transaction. WA’s Investor Services team was able to bring to bear our extensive network of key decision-makers were able to deliver a thorough assessment of the many different sectors relevant to Bionic. These insights and the wider intelligence gathered to inform our due diligence clearly demonstrates Bionic’s resilience to the challenges which those sectors may face in the coming years. We congratulate ECI and Bionic on a successful exit and look forward to seeing the business continue to flourish on the next stage of its journey.”


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WA Investor Services supports Trilantic Europe’s investment in Kantar Public

WA’s Investor Services team is delighted to announce that it has advised Trilantic Europe on its successful acquisition of Kantar Public, a global consulting business providing bespoke research services to governments and public-sector organisations.

Using our extensive network of senior policymakers and officials in the UK, and working with WA’s international partners across Europe and Australia, we provided an in-depth analysis of the regulatory and procurement landscape for large-scale and longitudinal population research services in government, as well as a detailed assessment of the political drivers for evidence-based policymaking in each territory.

Commenting on the deal, WA Partner and Head of Investor Services Lizzie Wills said: “It has been a pleasure to have worked with Trilantic on their successful transaction. WA’s Investor Services team, and our international network of partners, have unrivalled access to key officials directly involved in procuring population research services in the territories we analysed for this project. We were able to bring this network to bear to help the Trilantic team understand the appetite for such services in government, and the demand for Kantar’s bespoke methods in shaping policy decisions. We look forward to seeing the business go from strength to strength in the coming years.”

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A lifelong commitment? What to expect from the Lifetime Skills Guarantee

Skills are a key part of the government’s agenda, seen as vital for unlocking its ‘Levelling Up’ commitments in the light of skills shortages in areas like engineering, IT, and accounting. These shortages are long-standing. A 2018 study by the Open University found that skills shortages were costing UK companies £6.3 billion a year due to factors such as training and additional recruitment costs.

The government has acknowledged these shortages, and the need to ensure the education and training system is able to cope with the ever-increasing demands placed on it. In a foreword to the January 2021 White Paper on skills, the then Education Secretary Gavin Williamson indicated that more opportunities for training needed to be made available. As part of its response, the government has introduced a new policy – the Lifetime Skills Guarantee. It hopes that this initiative will address changing skills needs and employment patterns by giving people the opportunity to train and retrain throughout their lives.

What is it?

The Prime Minister announced the Lifetime Skills Guarantee in a September 2020 speech. The scheme covers a lot of ground policy ground. Pledges include increasing investment in FE colleges, introducing a lifelong loan entitlement, and a new funding system for higher technical courses. Only two policies, however, are being funded by the National Skills Fund: a new Level 3 qualification offer for adults and the extension of digital skills bootcamps.

The qualification offer, which commenced in April 2021, aims to give all adults without a Level 3 qualification (equivalent to A level) access to a fully-funded course. Previously, only adults under the age of 24 could access funding. The courses are taught by a range of state and private providers.

The government maintains a list of eligible courses, with 379 currently listed, and has made digital, engineering, health, and construction qualifications a clear priority with 37, 51, 54, and 66 courses available respectively. Whilst course lists are subject to review, investors in training providers that deliver these courses are likely to be particular beneficiaries of the scheme.

A high priority, and a long-term solution for a long-term problem

The Lifetime Skills Guarantee tackles big challenges, and the government has devoted significant effort to implementing it. The Guarantee was referenced multiple times in last month’s Budget, which also included a wider commitment to increase spending on skills by £3.8 billion by 2024/25 – a cash increase of 42% compared to 2019/20. These are not small pledges. The government has expended serious political capital on addressing the problem of skills shortages and, given this emphasis, is likely to release further funds in future years to support the scheme.

Announcing the Guarantee, the Prime Minister also made clear that the initiative is intended as a long-term scheme, rather than a short-term remedy to fill immediate skills gaps – that the nature of learning demands time and resources. He suggested that other countries have had an advantage over the UK when it comes to skills and technical education “for 100 years”. Indeed, the government’s Skills and Post-16 Education Bill confirmed that the planned rollout of the Lifelong Loan Entitlement, another major Guarantee commitment and one that aims to make it just as easy to secure loans for higher technical qualifications as for full-time degrees, remains over three years away in 2025.

Considering the CBI’s October 2020 analysis that predicted around 90% of employees would need to reskill by 2030, if the government is serious about this issue– and all indications suggest it is – then funding for initiatives like the Level 3 offer is likely to be enduring. The fact that only £375 million from the £2.5 billion National Skills Fund has been allocated for 2021/22 reinforces this. There are an estimated 11 million people who would be able to access the free qualifications under the Level 3 offer. Given the political weight the government has placed on these Level 3 offers – literally labelling them a ‘Lifetime Guarantee’ – the £95 million that is currently funding courses over 2021/22 is very likely to represent a prelude to further funding in the future.

The outlook for investors

The Lifetime Skills Guarantee is a key piece of the government’s education agenda. Both the Prime Minister and the Chancellor have been personally involved in its roll-out and have alluded to long-term planning happening in this space. This suggests that scheme will benefit from ongoing investment, particularly in sectors which government has identified as priorities. Technicians, engineers and social care professionals are consistently namechecked by ministers as occupations that the country lacks, and current course lists reflect this. Providers with speciality in these areas look set to benefit from the increased demand that funding from the scheme is likely to stimulate. As a result, investors in the technical education sector will want to monitor the government’s developing thinking closely in order to identify potential opportunities from future funding allocations for the scheme.


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The impact of Covid on international travel this summer and beyond

The article below was written by Pauline Guénot, a member of WA’s Investor Services practice.

While Prime Minister Boris Johnson declared that on 3 June there was “nothing in the data” to suggest a delay to the 21 June reopening target will be necessary, hopes of holidays abroad are still stymied by both testing and quarantine requirements, potentially jeopardising the recovery of the travel industry.

The UK is currently operating a three-tier “traffic light” system for international arrivals, which is reviewed every three weeks. Arrivals from countries in the red list require a 10-day hotel quarantine, while those from countries on the amber list are required to quarantine at home for 10 days and book tests for the second and eighth days. Arrivals from the green list – which presently includes only 12 territories – need not quarantine but are still required to take a test on the second day post-arrival.

Key barriers facing travellers

Ongoing restrictions to international travel will exacerbate the economic damage which the pandemic has done to the travel and aviation industry. According to the ONS, it has been the worst affected by the pandemic, with a fall to its lowest turnover rate in May 2020, at just 26% of February levels, compared with 73.6% in all other industries. The Minister responsible for tourism, Nigel Huddleston, has claimed that the government’s response to the travel industry crisis has been “immense” but, as yet, there is little sign of a sustained upswing in the industry’s fortunes, as the additional hassle Covid protocols entail continuing to deter travellers.

Firstly, the testing system has drawn criticism for its cost – up to £378 for the two tests for one individual. The government has been called upon to cap it to £50 by the Institute of Travel and Tourism, and to scrap the VAT on tests as a means of promoting the travel and aviation industry’s recovery. But the issues of testing go beyond cost. Private laboratories are already overwhelmed and travellers face delays in getting their results, demanding more flexibility around arrivals and departures. This problem is likely to be magnified if the green list is expanded in the coming months. Travel insurance has thus become a hot topic, and some travel companies might also offer packages including testing to ease travellers’ minds, like TUI which has partnered with Chronomics to offer the service from £20.

Industry experts have warned that summer holidays be thrown into further chaos by hours-long queues in airports created by onerous health checks at borders both upon arrival and departure. In response to lengthy waiting times, Heathrow Airport has pledge to lay on more staff and upgrade its passport e-gates, but such improvements will not be available until autumn 2021 at the earliest.

One of the key problems with the three tier “traffic light” system is that it cannot provide the certainty necessary to book holidays abroad very far in advance. The classification is guided by the analysis of factors including the country’s rate of infection, the prevalence of variants of concern, and the access to reliable scientific data and genomic sequencing. As a result, countries can move rapidly between the lists, in both directions; Portugal had only been added to the green list for a few weeks before being removed. The Nepal variant spreading in Europe is also currently making the headlines, threatening the green list’s expansion.

Towards a global understanding around Covid-19 certificates?

Before booking a trip to a country on the green list, British travellers must consider the entry requirements of their destinations, as well as the requirements for their arrival back in the UK.

The European Union has implemented a digital certificates system; travellers demonstrating vaccination, a recent negative PCR test or immunity from past infections are exempt from travel restrictions within the EU. If they succeed in reaching an agreement with the UK, British tourists could enjoy European trips as the continent’s restrictions are due to be lifted by the end of the month. Nevertheless, individual EU member states can still set their own rules when facing a deteriorating health situation or a new variant. For example, France and Austria recently tightened restrictions to prevent the Delta variant detected in India from spreading: a negative PCR test or a proof of vaccination is no longer sufficient to cross these borders. Over the summer, however, countries relying on tourism might not be so strict. Greece, Cyprus and Portugal are already open to British tourists, with Spain due to follow.

When it comes to crossing the Atlantic, the G7 summit taking place in London this month might answer that question. Boris Johnson will attempt to negotiate a quarantine-free air corridor with the US aiming at exempting vaccinated Americans from self-isolating upon arrival in the UK, in the hope of a reciprocal agreement for British citizens flying to the US. If he is successful, the current restrictions would be lifted in early July, allowing both British and American citizens to travel. However, the US administration has proven to be reluctant to lift the travel ban, arguing that prioritizing countries with a successful vaccination programme would send the wrong message to developing countries benefitting from the Covax scheme.

Holidaymakers must therefore remember that for travel to be possible, a reciprocal agreement between countries has to be reached. While Australia is on the UK’s green list, for example, limitations in place by the Australian government still prevents British nationals from landing on their territory. Furthermore, travel regulations are highlighting broader political motivations: the United Kingdom had to consider different variables, not least its hoped-for bilateral trade agreement, before placing India on the red list.

A digital and sustainable model of tourism ahead?

Electronic Covid passports along the lines of those currently operating in the EU might be the first illustration of a more digital model of tourism. As a result of Brexit, summer 2021 will be the last time that EU citizens will be able to travel to the UK with their identity cards (rather than their passports). Priti Patel confirmed that the new requirements would take effect from October onwards.

She also plans to introduce an Electronic Travel Authorization system, similar to the ESTA in the US. Also being considered by the EU, the ETA would see all visitors without a visa or immigration status charged a fee, and would be in place from 2025. As yet, the government has not given an indication of how much the system will cost each visitor.

A longer-term impact?

Ongoing restrictions and changeable regulatory requirements may mean that the travel industry does not recover to anything like 2019 levels of activity much before 2023, so pressures on the traditional approaches to mass-market tourism will remain even when the immediate trauma of the pandemic recedes. This may compound longer term trends of heightened environmental awareness about both the impact of air travel, and the impact of large numbers of visitors in potentially sensitive ecological areas.

Business travel will inevitably change as well, with virtual conferences becoming much more commonplace and, where necessary, longer trips blending work and leisure activities seen as the norm. Investors will want to pay close attention to such developments in order to stay ahead of what promises to be a rapidly evolving picture.



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