Luke Davis, CEO of IW Capital discusses the shift back to bricks and mortar investment and how community now influences investors.
The Bank of England yesterday predicted that 2021 will see the UK economy’s fastest growth since the Second World War. This growth comes with the reopening of wide sections of the economy after a year of restrictions and will be driven in large part by the hospitality and retail sectors as they cater to pent-up demand.
This comes after a long period of growth driven by technology and the digital world of each giants. A good indicator of this is the dominance of FAANG stocks in the S&P 500 stock index – an indicator of the overall US economy – these five companies make up 15% of the value of the entire index. While tech is not likely to go anywhere any time soon the pandemic has created a desire to get back to real life for investors and consumers alike.
To understand this trend, IW Capital have commissioned nationally representative research across 2100 respondents unveiling the desires of the UK’s investor community.
– 44% of investors are now looking to back UK-based companies, instead of global firms
– 29% of UK investors will back retail businesses
– Over a quarter (27%) of investors are investing in property
– 18% of investors will back the creative industries
– 16% are investing in the hospitality sector
Luke Davis, CEO of IW Capital:
“Economic growth is driven by any number of factors but seeing consumer sentiment and investor support so high gives a great indication of what is to come this year. People want to get out and spend, businesses want to grow and investors want to help them do that, it’s a perfect storm for rapid growth.
“The pandemic has undoubtedly had an impact on where this investment is going, with healthcare and pharma dominating and green sectors leading the way in terms of popularity. But now, with the reopening of large sections of the economy, there is a clear desire to back retail and hospitality in 2021.
“Pubs will bounce back along with restaurants and other hospitality, no one will want to stay at home after the year we’ve had and I really believe that. Working with local residents on redeveloping the pub and hospitality venue Rockwater Hove has shown me how much people want, more than ever, a place to come together as a community. IW Capital’s investment in Rockwater was supported by over £1million of investment from members of the community, an indication of the strength of the sentiment shown in our data.”