LONDON - From the pinnacle of the City of London’s largest skyscraper, Stuart Lipton is wagering a $1.2 billion bet that the British capital remains a master of the international financial universe no matter what happens with Brexit.
The 76-year-old property developer is not alone. Bankrolled by a host of global investors, including France’s Axa (AXAF.PA), his big-ticket gamble in London’s financial district is - so far - on the money.
The cataclysmic warnings during the 2016 referendum that London would lose its financial throne if it voted to leave the European Union (EU) have, so far, been proven wrong. London is still the world’s banker, only bigger by some measures.
“London is extraordinarily resilient and its future as a finance centre is secure because what we have here is unique,” Lipton told Reuters on the 61st floor of 22 Bishopsgate, set to become western Europe’s second tallest skyscraper when it opens next year.
In the year to June, London has attracted more cross border commercial real estate investment than any other city. It has overtaken New York as destination for fintech investment and it has increased its dominance of the world’s $6.6 trillion daily foreign exchange market.
Since the vote to leave the EU, Britain has leapfrogged the United States to become the largest centre for trading interest rate swaps, despite calls by ex-French President Francois Hollande to end London’s dominance in clearing euro-denominated derivatives.
That London has expanded its influence as an international finance centre is one of the biggest riddles of the United Kingdom’s tortuous three year Brexit crisis.
The city’s standing ensures the United Kingdom keeps one of its last big chips at the top table of world politics just as it splits from the EU.
It also means EU companies will still come to London to raise finance outside the bloc after Brexit, a fact not lost on Wall Street heavyweights such as Goldman Sachs (GS.N) and JP Morgan (JPM.N).
Just a mile away from 22 Bishopsgate, Goldman opened its new 1 million square foot European headquarters - complete with mothers’ rooms and wildflowers on the roof - in July, three years on from the 2016 referendum.
Largely abandoned by the British government during Brexit talks, ten senior industry officials told Reuters London’s financial services sector has grown since 2016 because there is no realistic competitor in its time zone.
And high-rolling bankers are too attached to its Anglo-Saxon, work-hard, play-hard culture.
The chief executive of the British division of one of Europe’s largest banks said although some business will move to the EU, most senior bankers will be reluctant to leave London. He would consider taking a 20% pay cut to remain in the city.
“If you are an Italian banker, who moved out to London 20 years ago, and your kids go to private school around the corner then you are not going to move to Frankfurt,” he said.(FA)
