Recent Forum: Stadden Forbes
Our thanks to Robert Forbes and Ben Nightingale of Stadden Forbes Wealth Management, for hosting our meeting on 23 October 2019 at their offices in one of Thomas Cundy’s grand 19th century terraced buildings within the Grosvenor Gardens Conservation Area. Standing at the gateway to Belgravia, the flamboyant French Renaissance architecture provided a perfect forum for engaging presentations and a lively discussion.
Robert Forbes is CEO at Stadden Forbes and described some of the challenges of family wealth preservation, against a backdrop of ever lower interest rates, global uncertainties and more local ones, such as Brexit. For many of his clients who face inheritance tax at 40%, passing wealth to future generations in a tax efficient way is a key concern and has a significant return. This is not without its pitfalls though, and with divorce rates amongst married couples running at over 40%, wealth passed to a married child might not always remain with the intended descendant. IHT planning could be about to get a whole lot harder if a Labour administration rises from the ashes of the UK's political Phoenix. The ultimate challenge, of course, is to arrange that a client’s worldly assets diminish to nil at the time of their demise…….without ever knowing exactly when that might be.
On the bright side, he said, people are living longer, so even 70+ year olds can be just as attractive fee propositions as younger clients have been in the past!
Matthew Jones is a Partner at EIP Europe, an astute and uncompromising IP litigation practice, based in the UK and Germany. He holds a PhD in Biochemistry and has extensive experience of acting in large scale UK patent litigation and multi-jurisdictional patent litigation. He has recently represented Unwired Planet International Limited in a patent and FRAND litigation against Google, Samsung and Huawei.
Matthew talked of the advent of the 5G mobile phone network. He reminded us how the first generation, 1G, simply supported calls; 2G - calls and texts; and 3G - calls, text, web and email. 4G supports all of these but operates far more quickly. 5G, however, is so fast that it has zero latency – that is, there is no delay between the time a request is initiated and the response being given. Surgery, for example could be carried out remotely using a 5G network. 5G will also support the internet of things which will allow fridges, for example, to communicate with a supermarket when replenishment is required. 5G uses higher frequency waves than previous generations and allows more devices to have access to the internet at the same time and at faster speeds, but it requires more transmitter masts than previous technologies.
Matthew told us that many legal patents are lodged by companies such as Samsung, Huawei, ZTE and Intel etc. , which are the self-same companies which contribute to the 3rd Generation Partnership Project (3GPP) - the organisation which oversees the production of Reports and Specifications which define these technologies. This, he believes, is not in the interests of consumers suggesting that some patents on which royalties are paid are not essential for the operation of the network.
Patent royalties add approx. 5% to the cost of mobile phone technology for consumers. If manufacturers were to absorb royalties in excess of 2% they would make losses. Matthew suggested that “freeing up” royalties on invalid patents would relieve such a burden on manufacturers and consumers.
Dr Andrew Heath, MD was appointed to Oxford Biomedica's Board in January 2010 and became Deputy Chairman and Senior Independent Director in May 2011. He has held senior positions at Astra AB, Astra USA and Glaxo Sweden. He is Chairman of Shield Therapeutics plc, and a non-executive director of Novacyt SA and IHT Partners, LLC.
In the years leading up to the 2008 financial crisis he was Chief Executive Officer of Protherics plc where he managed the company’s significant growth, and eventual sale to BTG for £220 million. One of the company’s key products was a rattlesnake bite antivenin.
One might be forgiven for wondering just how common it is for people to be bitten by rattlesnakes, but in addition to accidental bites, (Miss Arkansas was apparently bitten while using the lavatory) bites are not unusual amongst
1. Religious fanatics – for whom the snake represents the devil. Those who can pick it up are a channel for God’s power over evil. (Mark 16:18 “...and these signs shall follow them that believe; In my name shall they cast out devils; they shall speak with new tongues; They shall take up serpents and if they drink any deadly thing it shall not hurt them ...” may have something to answer for )
2. Drunks - say no more.
Andrew told us how it was worth the long burn of FDA approval to access a $200m market place where there was no competition. He explained the complex international process of production where venom is “milked” from captive rattlesnakes in Utah, shipped to Australia to be injected into specially reared sheep which produce antibodies; the sheep’s blood is then used to make antivenin at a facility in rural (Welsh speaking) Wales! Who would have thought it?
After the sale of Protherics he found himself out of a job. The global financial crisis had taken hold and the phone did not ring, so he began self-investing in life sciences businesses.
Not all have been successful, and although his expertise in science and clinical medicine, gave him confidence in the products, the businesses that failed did so as a consequence of poor management. Some examples have been
Science graduates, who have establish an enterprise not being good business people;
The challenge of hiring appropriate staff in the right location (getting qualified staff to move to rural Wales with their families, is a case in point);
Owners of a start-up being unwilling to relinquish control at the appropriate time for the business;
A good CEO who has not made a good chair person;
Well qualified people just not fitting in with the organisation. He highlighted the truth that many are “….hired on their CV but fired on their personality”.
Financing is also difficult. Too many companies are inadequately financed because:
Investors don’t necessarily have a long enough time horizon - one company which listed in 1996 and raised over £100m has only recently become profitable. As in this case, the journey through research to market may span two or three business cycles;
The exit timing for the venture capitalist may not be right for the business;
Early investors /employees may do less well than those at a later stage;
Research in certain fields (e.g. Alzheimer’s) have lost investors huge amounts of money;
He believes that going forward there are big opportunities in areas such as gene therapy and immunology for cancer treatment, as well as breast cancer specific and Alzheimer/ Dementia treatments.
One of his better financial decisions has been to move his personal pension funds to the USA where the management fees are 0.5%. That’s around a quarter of typical fees in the UK. A quick calculation shows that after 20 years the final value of a portfolio with a 5% p.a. investment return and 2% annual fees would be 57% of that with 0.5% fee leakage!
James Heappey MP has been the Conservative MP for Wells in Somerset since 2015, and at the time of our meeting was Parliamentary Private Secretary to the then Prime Minister Boris Johnson. While we had looked forward to meeting him he was unfortunately, but understandably, otherwise detained.