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Younger Entrepreneurs Choose Social Impact As Their Top Business Priority

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Younger Entrepreneurs Choose Social Impact As Their Top Business Priority

Younger Entrepreneurs Choose Social Impact As Their Top Business Priority

HSBC Private Banking research shows new generation of entrepreneurs are prioritising social impact and embracing angel investing over their older peers

A new wave of global entrepreneurs are setting up their businesses with the aim of making a positive impact on society, according to a new report from HSBC Private Banking. The Essence of Enterprise report found that the younger generation of entrepreneurs are leading this trend, with 24% of entrepreneurs aged under 35 motivated by social impact compared to 11% of those aged over 55. The report, now in its third year, is one of the largest, in-depth studies into the motivations and ambitions of entrepreneurs, researching the views of over 3,700 successful entrepreneurs in eleven countries. The report also found that this new generation of entrepreneurs is embracing angel investing, viewing it as a way to connect and collaborate with their peers.

A socially minded brand of entrepreneurship

One in five entrepreneurs considers social responsibility, being active in the community, or environmental responsibility as their top priority as a business owner, rather than prioritising areas such as maximising shareholder value or economic prosperity. Those who prioritise social impact have a greater propensity to engage in angel investing, (55% of impact-focused entrepreneurs versus 44% of entrepreneurs who prioritise commercial factors), and report a stronger willingness to rely on mentors for advice and support (75% of impact-focused entrepreneurs versus 66%).

The report also suggests a strong relationship between an emphasis on social impact and entrepreneurial ambition. 33% of the entrepreneurs projecting high growth ambitions state that they started their ventures with the intention of creating positive social impact, compared to 28% of those projecting the lowest growth. This suggests social impact should be seen as an integral part of the recipe of entrepreneurial success, and not separate from it.

A new investment style

Almost half of respondents (47%) have invested in other private, non-listed businesses, funnelling both capital and expertise back to the entrepreneurial community. However, the research reveals that a new younger generation of entrepreneurs is investing at a much higher rate than their older peers, with 57% of entrepreneurs under 35 undertaking angel investing compared to 29% of entrepreneurs aged over 55.

Differences also exist between the generations in how they perceive and approach angel investing. Over half of younger entrepreneurs (57%) view angel investing as a way to connect and collaborate with peers, staying up to date with industry progress and disrupters and to grow their knowledge and expertise.  Entrepreneurs of an older generation view angel investing as a way to diversify and grow their investment portfolio, approaching angel investing in a more informal style, through their own network of personal contacts. 43% of those over 55 view friends as the best route to new business, while 44% of those under 35 turn instead to professional advisers to source new investment opportunities.

HSBC Private Banking Global Chief Investment Officer Stuart Parkinson said: ‘It’s clear younger entrepreneurs want to do good, and we would be wrong to dismiss this as youthful idealism that will act as a brake on financial success.  They know that their business cannot have the impact they want without sustainable growth, and they are focussed on achieving both. They see a similar virtuous circle when it comes to angel investing; they are happy to invest in the wider business community, to contribute to each other’s successes and to learn from one another.”

Differing approaches across the globe

The report also brings to light the differences in the entrepreneurial mind-set in markets around the globe. Entrepreneurs in the Middle East (66%) are the most active angel investors, with the US (54%) and Mainland China (53%) next in line. By contrast, 45% of UK entrepreneurs are angel investors, along with 35% in Germany and 33% in Switzerland.

Regional traditions have paved the way for different approaches to angel investing between these markets. In the US, angel investing is highly professionalised; investors source new opportunities through formal channels, such as financial or professional advisors. In comparison, entrepreneurs in the Middle East source new opportunities informally, mainly through friends (Use financial advisors US 51%, Middle East 38%) (Use friends US 45%, Middle East 53%) They also perceive their role to be supportive, cultivating business development and leadership skills. In the US, entrepreneurs view their role as a challenger, optimising the performance of the management team by challenging their thinking and strategy.

In Europe, investors are more likely than those in other regions to perceive angel investing as a way to grow and diversify their portfolio, rather than as a way to build their network and share expertise.

In relation to social impact, entrepreneurs in the US and China show a greater emphasis on environmental concerns – 8.1/10 prioritise environmental issues in their business planning compared with 6.7/10 in the UK, Singapore, Switzerland and Australia. When asked about their desire to contribute to communities, entrepreneurs from the Saudi Arabia (64%) and UAE (62%) are most likely to reference being active in the community and civil society as important to their business operations compared to the global average of 44%.

 

Business

Puma forecasts strong rebound from end of second quarter

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Puma forecasts strong rebound from end of second quarter 1

BERLIN (Reuters) – German sportswear company Puma said on Wednesday it expects a heavy impact on its results from lockdowns to contain the coronavirus pandemic through the end of the second quarter, but said it sees strong improvements after that.

“We do expect the negative impact to continue through the first and parts of the second quarter, but expect to see an improvement in the second half of the year,” Chief Executive Bjorn Gulden said in a statement.

For the full year, it expects at least a moderate increase in sales in constant currency, with an upside potential, and a significant improvement compared with 2020 for both its operating and net profit.

Fourth-quarter sales rose by a currency-adjusted 9.1% to 1.52 billion euros ($1.85 billion) and operating profit by 14.6% to 63 million euros, meeting average analyst forecasts for 1.52 billion and 62 million euros respectively.

Puma said growth in the fourth quarter was driven by Greater China and its Europe, Middle East and Africa region, despite lockdowns in Europe, noting that about half of the stores selling its products in Europe are still closed today.

Rival Nike in December raised its full-year sales forecast after COVID-wary shoppers demanding outdoor sportswear drove its third consecutive surge in online sales.

($1 = 0.8226 euros)

(Reporting by Emma Thomasson; Editing by Maria Sheahan)

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Vodafone’s Vantage Towers announces intention to float

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Vodafone's Vantage Towers announces intention to float 2

LONDON (Reuters) – Vantage Towers, the mobile infrastructure company spun out of Vodafone Group, on Wednesday announced its intention to float on the Frankfurt Stock Exchange by the end of March.

Vantage operates about 82,000 towers across 10 countries, where it is usually the leading or second largest supplier.

Vodafone said it would sell a “meaningful minority” to create a liquid market in Vantage Towers’ shares. No newly created shares will be on offer, meaning Vantage will not reap proceeds from the deal.

The company did not disclose how many shares will be offered, but people familiar with the matter said earlier this month, that stock worth about 3 billion euros ($3.65 billion) would be sold.

Vantage said late last year that it expects to report pro forma adjusted core earnings of up to 540 million euros in the financial year to the end of March 2021.

Rival telecom mast companies such as Cellnex, American Tower, Crown Castle and SBA Communications trade at 25 to 30 times their core earnings, which would imply a valuation of 13.5 billion to 16 billion euros for Vantage.

($1 = 0.8226 euros)

(Reporting by Paul Sandle and Arno Schuetze; editing by Sarah Young and Louise Heavens)

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Lloyds profits fall as it targets wealth push

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Lloyds profits fall as it targets wealth push 3

LONDON (Reuters) – Lloyds Banking Group reported a sharp fall in profits for 2020 but resumed paying a dividend, as outgoing CEO António Horta-Osório set out fresh targets to expand the bank’s insurance and wealth business and further cut costs.

Britain’s biggest domestic lender reported pretax profits of 1.2 billion pounds ($1.70 billion), well down on 4.4 billion pounds the previous year, after pandemic lockdowns shrank household spending and drove up provisions for bad loans.

The profit figure nonetheless beat an average of analyst forecasts of 905 million pounds.

Among the targets set out, Lloyds said it would increase funds from customers in insurance and wealth by 25 billion pounds by 2023 and cut office space by 20% within three years.

Lloyds set aside 4.2 billion pounds to cover loans expected to sour, below a 4.5 – 5.5 billion pound range previously given.

The bank said it would pay a 0.57 pence dividend per share, the maximum allowed by the Bank of England and above a forecast of 0.53 pence.

Horta-Osório is leaving Lloyds after a decade running the bank to stand for election as chairman of Credit Suisse in April, with HSBC executive Charlie Nunn set to replace him.

($1 = 0.7048 pounds)

(Reporting by Iain Withers, Editing by Lawrence White)

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