Hedge Funds

Market volatility is 'fantastic' for these companies


While the rollercoaster ride seen in financial markets is making 2016 already a difficult year for many companies and investors, it is "fantastic" for start-ups and less-established firms, Brent Hoberman, the British entrepreneur that made his name in the dotcom bubble, told CNBC.

Volatility in equity and bond markets has hurt "later-stage" companies, but earlier-stage, smaller firms are thriving in the disruptive environment, Hoberman said, as the weakness in markets can actually allow more nimble firms to grow more quickly.

British Brent Hoberman, Co-Founder of PROfounders Capital, Chairman of made.com and Founder and Chairman of mydeco.com
Eric Piermont I AFP | Getty Images

"Market disruptions, market dislocations make consumers want to change providers, it makes corporates lose lots of great employees and you can hire them more cost effectively, which means that these sorts of companies can scale very quickly and grow quickly," Hoberman told CNBC at the sidelines of private equity conference, SuperReturn in Berlin.

"The other thing that market volatility does is it gives you that arbitrage thing: If it is so risky to invest in public company markets, then why not invest in earlier-stage companies where you are not dependent on market growth? Then you can just be dependent on companies that are just going to take market share," he added.

Hoberman made his name in e-commerce with the launch of travel bookings website lastminute.com in 1998, which he co-founded, before selling the business to travel technology firm Sabre in 2005 for $1.1 billion.

More recently he co-founded Made.com, a direct-from-factory consumer homewares and online furniture retailer in the U.K., which is rumored to be considering an initial public offering in the region of £100 million ($141 million) according to reports.

Speaking on the risk to markets posed by the possibility of a U.K. exit from the European Union (EU), Hoberman said the majority of tech entrepreneurs were staunchly against the move.

"If we do have 'Brexit' it will create a long period of uncertainty, it will take a lot of time to work out what Britain's role in Europe and the world will be and I think that those people that are pushing for Brexit have not explained at all, how they see those next few years panning out," he said.

"There is a lot of miscommunication on the amount of taxes we are paying to the EU – it only 2 percent and the amount of regulation being affected by the EU in British parliament is 7 percent, so these facts will come out," he added.