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The government’s impending sale of its remaining stake in Natwest has raised concerns, with the chief of a FTSE 250 wealth manager cautioning against potential risks associated with a surge in retail investor exposure to a single stock.
Steven Levin, CEO of London-listed money manager Quilter, criticised the government’s strategy, describing the sale of Natwest shares as too “isolated” to have a meaningful impact on revitalising the stock market.
In an interview with City A.M., Levin expressed apprehensions that the sale could deter investors rather than attract them.
Despite government officials framing the sale as a pivotal moment akin to the Thatcher-era “Tell Sid” campaign for British Gas privatisation, Levin cautioned against promoting Natwest shares as a singular investment opportunity. He highlighted the importance of diversification in investment portfolios, emphasizing the need for a balanced approach to equities.
Uncertainty looms over the timing of the sale, with questions arising over whether the plans will proceed as scheduled this summer. In March, ministers reduced their stake in Natwest below 30 per cent for the first time since the bank’s bailout during the financial crisis. Additionally, Natwest shareholders have endorsed measures allowing the bank to repurchase more shares from the government.
Initially, retail investment platforms were slated to facilitate the distribution of Natwest shares into the market. A Treasury spokesperson reiterated the government’s commitment to promoting a savings investment culture and broadening share ownership in the UK through a retail offer of Natwest shares. However, they emphasized that individual investors would have the discretion to participate in any potential offer, with the government adhering to relevant marketing requirements.
As discussions continue, concerns persist regarding the potential implications of the Natwest sale and its alignment with broader objectives to stimulate retail investment and market participation in the UK.
