The US owner of Birmingham City football club has said the UK can unlock a wave of inbound investment “incredibly quickly” if the government makes tangible progress on its pledge to speed up planning approvals.
Tom Wagner, co-founder of Knighthead Capital, told the Financial Times that Britain’s record of under-investment and slow growth could be turned around if Labour made good on its vow to remove obstacles to development.
“There are lots of projects that we are looking at in the UK that we’d love to pursue if the process can be made easier,” he said. “And we’re not the only ones. If things change by just a small amount, there’ll be a lot of capital inflow and a lot of excess growth.”
Knighthead has acquired more than 60 acres of land around Birmingham City’s stadium since taking control of the third-tier team in 2023. The New York-based hedge fund plans to build a new 60,000-seat venue as part of a large £3bn regeneration project involving housing, retail and entertainment space in one of the UK’s poorest neighbourhoods.
The firm manages about $9bn and has yet to submit formal planning applications for the project, which hinges on local authorities agreeing to set up new transport links. A proposed extension of Birmingham’s tram network through the area has been repeatedly delayed over several years.
Prime Minister Sir Keir Starmer has sought in recent weeks to prop up business confidence in the sluggish UK economy, as increased public borrowing and sterling weakness prompted warnings from billionaire hedge fund manager Ray Dalio that the country was heading towards a “debt death spiral”.
While Starmer wooed business before taking power in July, promising to “bulldoze through barriers to British success”, including with an overhaul of planning rules, relations were damaged by a £40bn tax-raising Budget that weighed heavily on companies.
Wagner said he was still “very bullish” about the UK’s long-term prospects, saying the country had a “highly educated, diverse, dynamic economy” and the “single most exciting city in the world” with the capital London. He conceded that Knighthead’s bet on the UK appeared “contrarian”, but that broader “animal spirits” could return swiftly.
“That can change incredibly quickly if the government begins making progress on its initiatives, which I believe they will do. You’ll see that turn. Once you start seeing some positive momentum, that leads to more positive momentum.”
With Donald Trump’s return to the White House expected to usher in a period of heightened economic competition and increase the gravitational pull of the US, Wagner said the onus was on governments around the world to make decisions that lowered barriers to investment.
“Capital is highly mobile, it will find the path of least resistance,” he said. “When governments begin making things harder, vis-à-vis other jurisdictions into which that capital may flow, they will suffer.”
In the UK, Wagner said planning remained the biggest obstacle to investment. “The solutions aren’t that hard to get right. And when I see relatively easy solutions that are in the way of progress and capital investment, I tend to think that the right path will be found,” he said.
Labour has led an overhaul of England’s national planning policy and proposed to limit the influence of local committees, as well as curtail attempts to block development through the courts. But experts have warned the changes could take years to take full effect.
Wagner, a former Goldman Sachs distressed debt trader, said Birmingham city council’s financial woes — it was declared bankrupt last year and forced to make drastic cuts to spending — had “very little” impact on Knighthead’s plans so far, and the firm was continuing to buy up land in an area just over a mile away from the city centre.
“We’re hearing all the right things in our conversations. What we need to see now is a bit more action,” he said, adding that he wanted to see real progress this calendar year on the potential extension of the city’s Metro tramline to the site of the proposed new stadium. “We’re confident that they’ll do what needs to be done. If they can’t for this project, well then maybe I’d be more pessimistic on the UK economy more broadly.”
Knighthead’s plans also rely on something even harder to predict: sporting success. Birmingham City were relegated to League One in their first season under US ownership, but are now top of the table of English football’s third tier.
The team are still getting average attendances at home games of more than 26,000, higher than several Premier League sides, while former NFL star Tom Brady is now an adviser and shareholder at the club.
Wagner said the goal was to take Birmingham City back to the Premier League and stay there for a “long period of time”, and in the process rekindle the fierce local rivalry with Aston Villa. “It’s an incredibly ambitious and probably a bit cocky thing to say, but, why bother if that’s not the objective?”
