Last year UBS issued one of its Entrepreneur Compass reports. We spoke to the firm about the work it does in building networks in the space, how the bank adds value via this activity, and how clients have reacted to economic and financial volatility.

Supporting business owners is a centuries-old core banking role. Beyond that, lenders know that one of the most “value-add” offerings they provide is giving entrepreneurs a chance to network, swap stories and strike deals with each other. 

As reported elsewhere, UBS is sponsoring the UK-wide expansion of a project honouring the fastest-growing firms in Wales. A list of 400 eligible firms across the UK will be published in the autumn of 2023, namely the East of England, London, the Midlands, North of England, Northern Ireland, Scotland, South of England, and Wales. This speaks to the Swiss bank’s investment in a regional UK footprint to be where the business movers and shakers are. (See an article on the topic here.)

Last autumn, the bank issued one of its Entrepreneur Compass reports: Challenges for the decade ahead. It examined topics such as supply chains; crisis resilience; diversity, equity and inclusion; digitalisation, and consumer trends. 

WealthBriefing spoke to Vishakha Rajput, head of the ILN and GEN networks at UBS, and Matthew Carter, CIO investment strategist, about the report and the bank’s approach to the entrepreneurial sector. 

“One primary thing that an entrepreneur client wants is the ability to share stories, obstacles, and successes with others. It is where we see an opportunity to add value through connecting people and delivering impact for wealth creators,” Carter said. “For asset allocators, the benefits of speaking to private businesses is that we can see what is going on on the ground in real time…this is a valuable additional input to the House View of UBS.”

One of the surprises in the report was the importance that business leaders and founders attatch to diversity, equity and inclusion. This isn’t simply because of any desire to do the “right thing” – there’s a strong business case, Rajput and Carter said.

“DEI is not just the right thing to do. Business owners understand that DEI makes commercial sense in a tight labour market and amid ongoing structural change,” Carter said. “Many entrepreneurs understand that the speed of technology changes and the legacy of the pandemic underscored the need to have the right workers, in the right place, at the right time.”

Working with entrepreneurs
UBS is of course not the only bank and wealth manager making a point about reaching out to business owners for whom there’s no hard dividing line between company and private wealth. Deutsche Bank, to give just one example, has talked of its “bank for entrepreneurs” offering. 

WealthBriefing asked the bank how concerned business clients are about the recent rises in interest rates and inflation. 

Conversations with entrepreneur members of the UBS networks suggested that among more established entrepreneurs, sensitivity to interest rate changes was not that great. Multigenerational firms have a lot of “retained” capital and grow organically, Rajput and Carter argued. 

“For many business owners their chief concern is their operating company…their private wealth is a residual. This speaks to a continuing need for entrepreneurs not to neglect the impact of economics, geopolitics, and monetary policy on private resources,” Carter said. 

Both men said that younger entrepreneurs need to be more diverse in terms of their funding sources for what may be a challenging fundraising backdrop in 2023.

Networking
The bank argues that in building out its business client networks, it has needed to do this both at the in-person and digital level.

“The pandemic forced us to create online networking opportunities for entrepreneurs and, while this tool will endure as a means of connecting diverse entrepreneurs seamlessly from around the globe, we also saw a real zest from entrepreneurs to attend physical events. The fact that entrepreneurs with overflowing `to-do’ lists consistently make the effort to attend the onsite events we curate speaks to a need for in-person connections that are personalised, relevant, and timely,” they said. 

The hardest part of working with entrepreneurs is “striking the right balance between scalability and personalisation,” Carter and Rajput said. “This challenge is not dissimilar to ones we hear from entrepreneurs – how can you build scalable solutions to global problems, while meeting customers’ needs for hyper personalisation and increased nearshoring for just-in-time production.”

“It’s our duty to deliver content and connections on the most consistently important topics for entrepreneurs around the world – fundraising, managing technological change, succession planning. But with every entrepreneur having a unique set of needs, challenges, and opportunities, it’s imperative to deliver the right offering for their personal circumstances,” they added.