Events dear boy. That was Harold Macmillan’s famous response to the query about what can cause government failure. Undoubtedly, there is significant truth attached to that guidance. However, we are currently in an era of unmatched clown-car incompetence, chronic short-termism and self-interest at the highest levels of political power. On Brexit’s 10th anniversary we are about to welcome the 7th occupant of 10 Downing Street since that embarrassing day. Who knew Ed Milliband’s scuppering of his brother David’s bid for leadership of the Labour Party would facilitate Brexit passivity and bonkers trade assumptions across the UK political spectrum? Meanwhile, the Russians are discovering Vladimir Putin is the worst military leader in Europe since Olaf the Hairy accidentally ordered 80,000 Viking helmets with the horns on the inside(thank you Blackadder). And, of course, how can we forget the failed casino, burger, vodka, sneaker, NFL, airline, crypto toddler himself….the Orange Emperor with no Hormuz close (!) babbling about reflection swamps in Washington. Prepare for Algae-fa to be designated a single-celled terrorist organization. Despite that swampy distraction, it turns out that the Donald is going to go down in history as the worst-returning oil acquisition strategist after his Venezuela and Iran escapades (unless you have an insider trading account). We seem to be receiving months’ worth of news in mere days so forgive me if I’m a bit event focused. But, I’m not the only one….let’s go on an events tour.
Prediction markets are the hottest thing in the finance world right now. Regulators in the US decided companies like Kalshi and Polymarket were trading derivatives, rather than betting platforms for events from sports to elections to wars. Famously, a US Special Forces sergeant was arrested having placed a trade on Polymarket to win $400,000 on the probability of Maduro losing power in Venezuela….. just before he hopped on a Black Hawk chopper to abduct Maduro and his wife. Maduro isn’t the only one suffering right now. Sports betting companies like Paddy Power/Flutter, William Hill and Bet 365 are losing out to these new ‘events prediction’ players. Kalshi sports volumes are up 300% since the World Cup started and is now valued at $22 billion. For context, global leader Flutter/Paddy Power is currently valued at $17 billion slightly more than Polymarket’s $15 billion value underpinned by a recent $600m investment from the New York-based Intercontinental Exchange (ICE). That’s a big bet but after a recent trip to the UK, I’m beginning to wonder about another event prediction…
Macroeconomic strategists are currently analysing the impact of another economics-light Labour leader in Andy Burnham taking the PM reins in the UK. And lurking in the background is the crypto puppet, Nigel Farage, anticipating a general election win in a few years. At last, thanks to the excellent Sally Nugent on BBC, the ‘ordinary man’ mask is slipping off Nigel (the car crash interview is worth a watch) as are the Reform Party’s electoral hopes. However, Westminster intrigue could amount to a financial distraction. It was acutely apparent during the worst of the Iran war volatility that the UK’s sovereign debt/bonds did worse than most other major advanced economy financial assets. That’s a very worrying signal. It means the UK is considered a ‘vulnerable’ sovereign risk. So, here’s an event prediction not being discussed in the UK financial or political press right now. My personal view is that the UK’s 8th political leader (after Burnham) will be the IMF/Troika who will have to impose financial sanity on the nation. Just saying, but there’s a huge amount of evidence that the UK has failed to do very much over the last 3 decades…
In recent weeks, both on a recent IMI panel in Dublin and at a business lunch in London, the theme of under-investment was raised as a huge factor in UK decline. It is striking that the UK has quietly lagged at the bottom of the G7 rankings by corporate spending in 24 of the last 30 years. UK investment averaged 23.7% of GDP between 1970 and 1990. But, after that it fell by a quarter, to an annual average of just 17.9%. In contrast, other major OECD economies have, on average, kept their investment levels above 20% of GDP. Back in 2024, I also had highlighted this shocking lack of long-term planning:
“The Institute for Public Policy Research estimates the under-investment in business at $500 billion less than what other comparable OECD countries have invested since 2005. Public sector investment (infrastructure) was a further $200 billon below the G7 average. All in, this chronic lack of investment places the UK 27th out of 30 OECD countries.”
Thatcherism might need to be reviewed. At least, the English football team is in better shape these days. In fact, sport is on my mind too.
Closer to home, the return of world-class tennis to Ireland at the Dublin ATP Challenger Tour event at Elm Park opened eyes up to the possibilities of showcasing memorable sporting experiences. There is a reason why sports franchises, festival events, city-break tourism and concert tickets continue to smash valuation records. The experiential industry plays to scarcity, living in the moment and shared memories. Check out the acceleration of NBA franchise valuations from 2020 to 2025. Utah Jazz was acquired for a record $1.66 billion in 2020, but in 2025 the LA Lakers were bought for a new record franchise value of $10 billion. That’s a 6x shift in asset values. So, just as Big Tech companies have become bigger than sovereign states (and borders), it feels like sport will be a border-less global platform. Indeed, the recent reports about an ice hockey franchise coming to a Dublin home (in Cherrywood) and a brand new stadium could be flagging some very interesting long-term thinking? Follow that puck, and reach for the stars….literally.
One can marvel or guffaw at SpaceX’s peak post-IPO valuation near $3 trillion, but there are big lessons for Europe. Global business in many communications and technology sectors is dominated by quasi-monopolies. That global monopolistic ‘north star’ for start-up founders in the US seems to be a cultural differentiator. Apple, Amazon, Google, Microsoft, Netflix, Nvidia and Meta dominate their sub-sectors and have benefitted from the massive depth of US capital markets prepared to back global domination. We should, of course, celebrate the recent $3.6 billion exit by the founders of Fin/Intercom. But, at a strategic level, Europe needs to mobilize all its financial innovation and resources to plot the building of trillion dollar global champions over the coming years. So, on a positive note for both Europe and the UK, I’m looking at one huge sector still fragmented and missing the economies of scale which digital dominance can deliver. I’m thinking banking where London is still a major financial centre combining centuries of financial experience, stable common law, a concentration of necessary skillsets and….rapid innovation.
The UK is the second biggest fintech hub on the planet behind only the United States. In 2025 UK fintechs raised $3.6 billion across 534 separate deals, more deals than the next five European countries combined. Also, London is home to Revolut, now worth around $75 billion and the most valuable private tech company in Europe. In fact, 8 of the top 10 fintechs in Europe come from the UK. It’s entirely possible London will produce Europe’s first trillion dollar financial services company. Ironically, with my monopoly/north star thinking cap on, the much-maligned fragmentation of Europe’s banking market could help the growth of a new trillion dollar financial franchise. Currently, Europe is home to over 9,000 banking entities. That’s not sustainable, but we might have to wait for events dear boy.
