Hargreaves: We should have gone for No Deal
. . . and billionaire founder of Hargreaves Lansdown has no time for critics of its loyalty to Woodford
IT TAKES a large food delivery from his local supermarket to stop Peter Hargreaves in his tracks. The billionaire tycoon is lamenting the state of Brexit – and showing no sign of letting up – when the door bell rings. ‘Are we nearly finished because I’ve just got a big Waitrose delivery?’ he announces suddenly.
The 74-year-old Lancashire-born investor, who co-founded investment supermarket Hargreaves Lansdown in 1981, has made no secret that he voted to leave the EU. But unlike most other highprofile Brexiteer grandees, he is not happy with the deal struck by Boris Johnson at the 11th hour over Christmas.
‘I know it’s not a full deal because of all the small print, there’s pages and pages and pages of it!’ he says. ‘It’s bureaucracy gone mad. So we’d have been far better off with No Deal.’
Britain should have given ‘ two fingers to the EU’ instead, he says.
‘Had we come out of the EU fully and completely, first of all, the pound would have dropped. And that would have made us incredibly competitive and made the European exporters incredibly uncompetitive at selling to the UK.
‘The Germans, the Italians, the French – they would have screamed for a free trade deal with us. And
‘Who wants to work in Paris with its high taxes’
we’d have got it, without all the bloody rules and regulations. The only time you worry about the pound going down is when you’re down in Costa del Sol. That’s only a couple of weeks a year.’
Hargreaves is a strong believer that the UK is able to ‘rise to the occasion’. He reckons more European financial firms will move to London to gain access to the City’s markets, as one of the main financial hubs globally.
‘They talked about Frankfurt –come on! London Transport executes ten million journeys a day. The population of Frankfurt is 700,000.
‘And who wants to work in bloody Paris, with high taxes... and overcharging restaurants. The top 50 restaurants in London are better than any restaurant in Paris.’
Brexit is not the only topic Hargreaves is impassioned about. Fund managers have had a rough ride following the downfall of Neil Woodford and face stiff competition from cheap robot funds.
Hargreaves Lansdown ( HL) came under fire for promoting Woodford even as his performance nose- dived and his funds haemorrhaged cash.
The company founder will not be drawn on Woodford, although he points out that other fund managers supported HL’s approach at the time.
‘Many fund managers were applauding the [ HL] stance in sticking with it, because they did believe that many people are too short term,’ he recalls. Has Woodford’s fate blighted the fund management profession? ‘There will always be a need and there will always be a successful range of fund managers. Fund management is not dead.
‘And it’s a young man’s game to get it right. You know, we always used to say it was 95 per cent perspiration and 5 per cent inspiration. And I sometimes wonder if it’s 100 per cent perspiration.’
He confesses to buying a few cheap robot funds last year after selling £ 550 million of shares in Hargreaves Lansdown.
‘I just wanted to get in the market quickly,’ he explains.
He is still the largest shareholder in the FTSE 100 company with a 24 per cent stake. Hargreaves has a fortune of £2.4 billion, according to The Sunday Times Rich List.
His roots are more modest, growing up as the son of a baker in Clitheroe. Hargreaves Lansdown had similarly unpretentious beginnings, assembled in 1981 from his spare bedroom in Bristol with Stephen Lansdown.
Speaking from his home in a village outside Bristol, it’s hard to skirt around the nationwide lockdown. At one point he stops to check a flashing light. ‘It’s a bulb on the blink,’ he says. ‘It couldn’t possibly be a fire.’
He expects companies hard-hit by the pandemic that manage to weather the storm will come back in full force.
‘The one thing I’m 100 per cent sure of is that when the pandemic’s over, the hospitality industry, the travel industry, the restaurant industry and the airline industry will go absolutely bananas, it will be the biggest bonanza ever.
‘If you wanted a real punt, you should look at Ryanair shares. But they’re not cheap. They haven’t gone down much.
‘ You can rest assured when it comes back, Ryanair’s share price will double and they’ll fill every damn seat. And they will make a fortune. But when to buy those shares is another matter.’
Hargreaves also heaps praise on Ryanair boss Michael O’Leary.
‘What’s he called? I love him. I think he’s fantastic. Absolutely brilliant. And he’s always pessimistic. That’s what I love about him. I always say this in business: optimists fail, pessimists prevail.
‘I think he’s one of the greatest businessmen around. He’s a smart cookie. Ryanair will just go bananas ...all the hotels on the Med, you won’t be able to get in there with doubling the price of rooms. They’ll all get it back.
‘The businesses that have really suffered are the old economy, retail shops that are no longer relevant to today’s living.’
A focus on fast- growing businesses that are often tech-savvy is the mantra that underpins his Blue Whale Growth fund, which Hargreaves set up with fund manager Stephen Yiu in 2017.
The fund manages £ 670 million and invest sin companies that Yiu believes have growth potential which is underestimated by the market.
The pair met when Yiu joined Hargreaves Lansdown nearly two decades ago.
‘I always felt he talked more sense than anyone else. And there was absolutely no doubt he worked harder than anyone else in the firm, including me.’
The pair kept in touch over the
‘Optimists fail – but pessimists prevail’
‘All governments would like to see the end of cash’
years before deciding to set up their new fund firm.
‘We realised that the world was changing. And the most remarkable thing is that the pandemic has just accelerated that change; people have suddenly worked out you don’t need to make some journeys, you can Zoom; you don’t need to go to the office, you can work from home.
‘For the last nine months, I’ve said I want that, so I go on Amazon, find it, press the buy button, [it arrives] the following day.’
The fund’s top holdings include Facebook, PayPal, Mastercard and Visa. It is up 80 per cent since launch.
‘Visa is a massive beneficiary of t he new economy,’ says Hargreaves. ‘All governments would like to see the end of cash. It more or less would put an end to the black economy on which they collect no tax.’