Key Takeaways
- • Hedge fund managers surveyed by Hedgeweek want the incoming chancellor, John Healey, to deliver a credible growth plan rather than a list of tweaks, with debt interest close to 4% of GDP cited by Hegel Capital's Adrian Vlad as a key constraint.
- • Alphidence Capital's Igor Yelnik flags debt above £3tn, an April-to-September deficit £6bn worse than the Office for Budget Responsibility expected, and CPI inflation at 3.5% forecast to peak near 4.1%, and warns that any perception of fiscal slippage could put gilts at risk.
- • The clearest area of consensus is opposition to tax measures that would push founders, high earners and investment professionals out of London, including carried interest, capital gains and non-dom changes.
- • Iguana Investments' Fahd Ahmed proposes a temporary stamp duty holiday on share trading, backing the London Stock Exchange's call to scrap the tax to draw capital back into UK equities.
- • The Budget faces pressure to find new revenue ahead of an expected fiscal hole, and the finance industry fears a windfall tax, with JPMorgan Chase chief Jamie Dimon having lobbied Downing Street on bank taxes.
Summary
John Healey delivers his first Budget as chancellor on Wednesday under mounting pressure to raise new revenue and close an expected fiscal hole. According to Hedgeweek, which surveyed hedge fund managers on what a healthy Budget should contain, the finance industry is concerned about a possible windfall tax. JPMorgan Chase chief Jamie Dimon, who helped persuade Rachel Reeves against higher bank taxes last November, made the industry's case in Downing Street last month.
Adrian Vlad, founder and portfolio manager at Hegel Capital, assesses the UK as a company in his portfolio would be assessed: a strong franchise with a stretched balance sheet, and debt interest close to 4% of GDP, more than most government departments spend. He calls for a five-year growth plan covering sectors, planning, energy costs and capital markets reform, alongside honest positions on defence, the triple lock and social care. Igor Yelnik, CIO and CEO of Alphidence Capital, points to debt above £3tn and a deficit running £6bn worse than the Office for Budget Responsibility expected, with CPI at 3.5%. He wants a credible path to falling debt-to-GDP, realistic growth assumptions and restrained current spending, and he warns that fiscal slippage could damage gilts. He is pessimistic, expecting a Budget that avoids short-term market disruption but harms the economy over time.
The strongest point of agreement concerns individual tax. Managers want the Chancellor to avoid measures that would push founders, high earners and investment professionals out of the UK. Yelnik warns against raids on carried interest, capital gains or recent arrivals, and suggests targeted incentives and abolition of inheritance tax. Dr Tillmann Sachs, founder and CIO of J8 Capital, calls for low tax, no punishment of non-doms and no exit tax. Fahd Ahmed, CEO and co-founder of Iguana Investments, seeks a revised non-dom regime, tax breaks for founders and returning UK residents, and a simpler tax system. He stresses that his views are his own and not those of Iguana or its portfolio.
On equities, the London Stock Exchange has called for stamp duty on share trading to be scrapped. Ahmed supports a stamp duty holiday as a starting point, described as temporary to gauge investor behaviour before any extension, paired with lighter regulatory burdens for retail investors buying UK equities and a public education campaign on personal investing. Ahmed also argues that weak productivity is the UK's deeper problem, calling for cross-party consensus, investment in energy and transport infrastructure, planning reform and housebuilding targets. Sachs advocates devolution and decentralised budget powers, arguing that centralisation has failed to deliver better education, health and social outcomes.
Adrian Vlad, founder and portfolio manager at Hegel Capital, assesses the UK as a company in his portfolio would be assessed: a strong franchise with a stretched balance sheet, and debt interest close to 4% of GDP, more than most government departments spend. He calls for a five-year growth plan covering sectors, planning, energy costs and capital markets reform, alongside honest positions on defence, the triple lock and social care. Igor Yelnik, CIO and CEO of Alphidence Capital, points to debt above £3tn and a deficit running £6bn worse than the Office for Budget Responsibility expected, with CPI at 3.5%. He wants a credible path to falling debt-to-GDP, realistic growth assumptions and restrained current spending, and he warns that fiscal slippage could damage gilts. He is pessimistic, expecting a Budget that avoids short-term market disruption but harms the economy over time.
The strongest point of agreement concerns individual tax. Managers want the Chancellor to avoid measures that would push founders, high earners and investment professionals out of the UK. Yelnik warns against raids on carried interest, capital gains or recent arrivals, and suggests targeted incentives and abolition of inheritance tax. Dr Tillmann Sachs, founder and CIO of J8 Capital, calls for low tax, no punishment of non-doms and no exit tax. Fahd Ahmed, CEO and co-founder of Iguana Investments, seeks a revised non-dom regime, tax breaks for founders and returning UK residents, and a simpler tax system. He stresses that his views are his own and not those of Iguana or its portfolio.
On equities, the London Stock Exchange has called for stamp duty on share trading to be scrapped. Ahmed supports a stamp duty holiday as a starting point, described as temporary to gauge investor behaviour before any extension, paired with lighter regulatory burdens for retail investors buying UK equities and a public education campaign on personal investing. Ahmed also argues that weak productivity is the UK's deeper problem, calling for cross-party consensus, investment in energy and transport infrastructure, planning reform and housebuilding targets. Sachs advocates devolution and decentralised budget powers, arguing that centralisation has failed to deliver better education, health and social outcomes.
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