Julia Hoggett, CEO @ LSEG plc: The Myths and the Reality of The London Stock Exchange
Summary
Julia Hoggett’s core diagnosis is that Britain “disconnected society from our capital markets” by protecting retail savers out of regulated investing and pushing pensions toward cheap, low-risk assets. Putting defined-benefit pension volatility through corporate P&Ls encouraged CEOs to close and de-risk schemes, while roughly 27,000 small defined-contribution funds were not consolidated as intended and the system was judged on cost rather than net return. Her investor takeaway is that this damage was self-inflicted and therefore reversible: “The great benefit of having done that to ourselves is we can undo it to ourselves.”
The repair requires all “five fingers and a glove,” not another isolated listing-rule change. The UK has modernized rules largely untouched since the 1980s, reversed restrictions that weakened sell-side research, and is consolidating pension funds so they can originate private assets, co-invest and act more like CPPIB or Ontario Teachers’. Eleven large default DC schemes have committed 5% of assets to private companies by 2030, part of replacing the doctrine that “cheap was good” with value-for-money measured by net return.
The claim that ambitious UK companies should automatically list in America is not supported by Hoggett’s data. Over ten years, only 20 UK companies listed in the US and raised more than $100 million; nine have already delisted, only four are trading up, and the remainder are down more than 80%. Her mechanism is that the US serves the Magnificent 7 exceptionally well, but smaller foreign companies can disappear outside major indices and be sold on headlines without index demand pulling them back.
London’s claimed liquidity disadvantage also dissolves under Hoggett’s preferred measures, although stamp duty remains a genuine handicap. Free-float-adjusted turnover is higher in the FTSE 100 than in the S&P 500 or Nasdaq, while Yahoo Finance’s liquidity data was, when last checked, wrong by a factor of over three. Yet Britain charges investors to buy domestic shares but not US or European ones—“a perversity” raising roughly 3–4 billion annually for the Treasury.
Index access and domestic ownership, not exchange “sexiness,” are the strongest elements of London’s pitch. An IPO entering within the FTSE 100’s top 75% by valuation can qualify in five days, whereas US indexation is neither immediate nor assured; 60% of investors in the UK are international, so “the same people who can buy you in New York can buy you in London.” Hoggett’s concern is what happens when Britain loses the upside: Arm rose from about $52 billion to $150 billion in its first year back, yet initially only 1% of its investor base was owned by UK investors.
The host’s sharpest pushback is that London may be losing the developers behind companies such as Revolut, Monzo and Wise to regulation, living costs, crime and friendlier tax regimes. Hoggett answers that Britain deliberately created the fintech sandbox those companies emerged from and can again build the best funding continuum. A 1% increase in real pension returns every year compounds into an “eye-watering” difference; scale, higher-quality management and portfolios of private companies matter more than minimizing headline fees.
Hoggett’s 2035 vision depends as much on culture as mechanics: Britain must back itself, celebrate founders and become “young, scrappy and hungry” for listings. The host says Nick’s company could walk straight into the FTSE 100; Hoggett’s own one-sentence pitch is that London is “at least as compelling” as the US, while retaining access to US investors and avoiding uncertain US indexation. The ultimate test is whether the LSE becomes the default for scaled UK companies financed by domestic capital from startup through public ownership—not merely a “300-year-old fintech” with better rules.
Deep dive
1. Britain dismantled its own domestic risk-capital machine
Hoggett traces her decision to pursue the LSE role to summer 2020, when Apple became worth more than the FTSE 100 for the first time. Then the FCA’s director of market oversight, she wrote down everything she might change; a headhunter called the next day.
Her starting thesis remains intact: Britain has world-leading universities, creates more unicorns than anywhere outside the US and China, and operates a globally significant capital market. The City excelled at serving international finance but did “a less good job of driving the UK domestic economy.”
The pension mechanism matters. Moving defined-benefit liabilities onto company balance sheets and running matching-adjustment volatility through quarterly P&Ls made earnings hostage to pension funds; CEOs closed schemes, de-risked the remainder and shifted from equities into fixed income and other debt products.
Retail policy created the other disconnection: regulators repeatedly raised barriers because failures lead to parliamentary scrutiny. Under the banner of protection, people lost access to advice and regulated markets even as cryptocurrency offered a simple journey—leaving citizens without a stake in companies funding jobs, productivity, the NHS and defense.
2. Reform only works as “five fingers and a glove”
Hoggett rejects “deregulation” and its implication of a bonfire. Her preferred test is outcomes-based: regulation often converts a legitimate goal into a prescribed process, after which everyone checks compliance and nobody asks whether the intended outcome occurred.
The first finger is market architecture. UK primary and secondary capital-raising rules, materially unchanged since the 1980s, were rewritten last year to give listed companies strategic flexibility comparable with other major markets.
The second is research. European rules stopped banks subsidizing research through trading commissions, reducing coverage quality for emerging companies; Britain reversed them last year so investors can better understand and value the next generation.
Pension and retail reform form the third finger, with PISCES as a crossover market connecting private companies to institutions. The Mansion House Compact commits 11 large default DC schemes to put 5% of assets into private companies by 2030, forcing them to develop the teams, structures and scale required to participate.
3. US listings are not an automatic upgrade
Hoggett’s myth-busting dataset is stark: just 20 UK companies listed in the US and raised more than $100 million over ten years. Nine have delisted, four are trading up, and the rest are down more than 80%—hardly evidence that “the grass is always greener in the US.”
Her explanation is structural. Roughly 60% of the US market tracks major indices, but smaller foreign issuers may never qualify; without index demand, a UK or European headline can trigger selling, and there may be no indexation drag pulling investors back. Some banks, she adds, promote US listings because “they make double fees.”
The flow is not one-way: six companies moved from the US to the UK over the same period. Two of AIM’s most successful IPOs in the prior year were North American companies that felt underserved in America and were up 32% by the end of the year.
4. London’s liquidity and valuation discount are contested myths
On liquidity, Hoggett distinguishes absolute share volume from turnover of available stock. Trillion-dollar US companies naturally trade more shares, but the percentage of free float turning over is higher in the FTSE 100 than in the S&P 500 or Nasdaq; Yahoo Finance’s liquidity data was, when last checked, wrong by a factor of over three.
Nor is the buy-side pool purely British: 60% of investors in the UK are international. An IPO valued within the FTSE 100’s top 75% can enter the index in five days, while S&P 500 inclusion may require a US base or substantially all revenues in the US and is never automatic.
The host presses an alleged 45% UK valuation penalty and asks whether Deliveroo would be worth more in America. Hoggett says company-specific challenges affected Deliveroo, but cites paired-company work finding UK and US valuations largely aligned after adjusting for growth and underlying business performance.
Arm is her counterexample and cautionary tale. She believes its move from about $52 billion to $150 billion on the AI trade would also have happened in London—while conceding “you can’t prove a negative”—but initially only 1% of Arm’s investor base was owned by UK investors, with major pensions and retail largely excluded.
5. Domestic ownership closes the innovation flywheel
For Hoggett, treating listing venue as irrelevant risks indifference about who captures the upside from British innovation. Risk capital funds R&D, jobs and growth; successful companies then generate dividends, pension returns and taxes. Treating assets and liabilities separately obscures this “risk capital flywheel.”
The host’s challenge—worth keeping—is that developers increasingly see London as overregulated, expensive and unsafe, preferring Europe or Dubai. Hoggett points back to the FCA sandbox that enabled Revolut and Monzo, arguing Britain has already shown it can consciously create an innovation-friendly regulatory environment.
Funding must extend through the “valley of death,” where scaling companies need tickets beyond what many VC and PE funds can write. Britain has the world’s second-largest institutional-capital pool and proven stock-pickers; consolidation should let pension funds invest as LPs, co-invest and build diversified private-company portfolios.
Her case for accepting higher fees is return-based: Canadian and Australian pensions pay more but earn higher real returns. “If I was ever charged with a crime I didn’t commit, I wouldn’t want a cheap lawyer defending me”; similarly, a 1% increase in real pension returns every year compounds enormously.
6. Taxes, executive pay and Brexit expose self-imposed frictions
Stamp duty is the clearest distortion: Britain taxes investors buying Aston Martin shares but not Tesla or Porsche, despite Aston Martin employing people and building cars domestically. The levy produces roughly 3–4 billion for the Treasury, so simply demanding abolition ignores fiscal constraints.
Hoggett proposes increasing domestic equity flows first—through pension incentives and reconsidering whether cash ISAs should occupy 100% of everyone’s total lifetime allowance—thereby raising stamp revenue before tapering the tax for retail and smaller tickets. The objective is an affordable transition, not a sudden hole in the Exchequer.
Executive compensation reflects the same fixation on cheapness. UK reports can devote 40 pages to two executive directors; if asset managers prevent a globally expanding company from paying the market rate for talent, they are unintentionally saying, “I don’t want you to be globally consequential.”
Brexit had natural consequences, but it also forced scrutiny of the City’s domestic purpose. Using 2024–25 capital raised, only the US and India exceeded Britain; the UK was Europe’s sole top-10 market and raised more than the next three European venues combined.
7. Culture is the final reform—and the 2035 test
Hoggett’s “DeLorean package” is back to the future: restore incentives for Britain’s capital pools to back Britain, then let success become self-reinforcing. Founders often put “their money, their mortgage and often their marriage on the line”; the country should celebrate that value creation rather than instinctively talking itself down.
London must also package itself better. Hoggett calls the LSE a “300-year-old fintech”: its purpose—convening those with capital and those needing it—has endured, while its technology has transformed. She says she must be “young, scrappy and hungry” in fighting for every compelling listing, including Revolut.
On ESG, she rejects both dismissal and checkbox regulation. Climate impact is a legitimate driver of long-term value, but prescriptive ESG regulation can perversely favor large extractive companies able to produce data over scaling green businesses; “if getting to net zero was easy, we’d have done it already.”
Her management principle is, “I don’t need to be right. I need us to get to the right answer,” updating decisions as evidence changes and searching between false binaries. By 2035, success means London is the default exchange for scaled UK companies because domestic capital financed them from formation through listing.