The Drury Report’ is published this week

Inspired by a series of blogs on ‘The Drury Report’ is being published this week. It offers ten recommendations which are designed to help restore the ability of the small-cap community to generate early stage equity capital.

In Spring 2012 I wrote about my concerns for the future of PLUS Markets. The blogs were read by my MP Andrew Selous (South West Bedfordshire) and then by members of Government. When PLUS Markets collapsed I was asked to write a paper for the Treasury team. I gained the support of a number of City professionals and now, three months later, we are able to publish our conclusions.

Appendix Two, written by Roger Hardman of Hardman & Co., a specialist small-cap research house, provides a detailed breakdown of the SME sector. It was he who provided the basis for the cover statement:

“There are 4.5 million SMEs in the UK. Only one million employ staff. This equates to 13.8 million people in work (43% of the private sector workforce). If the small-cap sector is rejuvenated perhaps another 200,000 people could find work.”

The sub-title is ‘Come back Sid: it’s time to reignite the equity culture’ and one recommendation which caused much head scratching and research is the proposal that Government should encourage pension trustees and managers of Occupational Pension Schemes to commit up to 5% of their funds into SMEs. The members of the National Association of Pension Funds (‘NAPF’) have assets of around £800 billion so the recommendation could release up to £40 billion. It would certainly give Sid confidence if the professional managers took the lead.

One of the Group members is Brian Hibbert CBE, who made a personal fortune in the Defence Industry and is now the Founding Chair of the South East Midlands LEP. He’s an engineer by profession and provided us with a process driven approach. He drew the ‘Funding Frustration Funnel’ which visually demonstrates the tension between the Fund Seekers (the ‘Demand’ side) and the ‘Funders’ (supply) and then produced a master piece: his ‘Stakeholder Analysis Small Cap Funding Process’  shows the whole industry. The recommendations made in the Report are designed to move all Stakeholders into a position of active support.

During the writing of the Report ICAP completed its purchase of PLUS Markets and made an announcement which indicates it wishes to move standards ‘up-market’. There are rumours that it will start unloading companies it does not want. This is a disappointment for those of us who believe the PLUS model, with professional management, is a vital part of the early stage equity process.

The SEED/EIS early stage equity scheme is now alive but all the evidence is that it is so complicated that investors are shunning it despite the generous tax breaks.

One of the recommendations we make is to ask that our sector is better represented at Government level so that we can play a part in helping the successful introduction of equity schemes.

We hope that you, the members of Enterprise Britain, will be pleased with our Report and that you feel we have represented our sector properly and with professional competence.

Copies of the Report are available by emailing me at  (please state if you want it electronically or in hard copy posted to you) or you can download it from

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