Nepean Perspectives
The Half Year Review 2026
The Half Year Review 2026
Foreword
A word from Gavin
The communications industry has always sold uncertainty. It has felt like the real amplifier of risks for boards and executive teams for as long as I can tell. While that ‘uncertainty’ continues - a new Government, the AI boom, war in the Middle East and Europe – it has become less novel and more of a mainstay of our world today. These events are no longeruncommon and there will be more.
The communications industry has always sold uncertainty. It has felt like the real amplifier of risks for boards and executive teams for as long as I can tell. While that ‘uncertainty’ continues - a new Government, the AI boom, war in the Middle East and Europe – it has become less novel and more of a mainstay of our world today. These events are no longer uncommon and there will be more.
So, the question we have been asking is what does a permacrisis environment really mean for business and, more importantly, for the Chairman or Chief Executive leading it? Constant risk monitoring or a new reality that requires people to take bold decisions to achieve their corporate objectives. As a respected and experienced advisor said to me recently “the biggest risk is involuntary inertia”.
Restructuring. Transactions. Refinancing. Government pressure. Regulatory exposure. Legislative change. The decisions keep coming. The space for passive strategy is constricting. Making the right calls and taking the right action becomes even more important and joining this all up across stakeholders critical. But how to do this effectively?
We believe the answer lies in our boutique, research and evidence-led offer. Of focussed senior-led teams with a truly integrated multidisciplinary approach. No silos. No mixed signals. Single, clear advice and execution at the highest level.
It is for this reason that we hit the halfway point winning new client mandates and deeper roles with our existing clients. We are looking forward to tackling the second half of the year with the same energy and creativity for our clients as the first.
We have continued our growth with three new hires, including an Associate Director and our next Partner (more on that soon) joining in the coming months. We continue to bring home grown talent through the business as well as seeking out people who want to be a part of growing Nepean. Huge thanks as ever to our clients for putting their faith in us and to our team for delivering to the highest standards day in day out.
I hope you enjoy our new half year review format and you get a good sense of the great work, thinking and growth that has been going on at Nepean in H1.
Gavin Davis
Founder
Nepean News
01
Three New Hires
Nepean welcomed the brilliant Molly Kate Vickers (Associate Director) and Eva Sayers (Consultant), with our third Partner due to join the company in September. Each of the hires continues our focus on bringing varied expertise to our clients, genuine curiosity and intelligence and, with our latest hires, even more focus on building our networks for clients.
01
Three New Hires
Nepean welcomed the brilliant Molly Kate Vickers (Associate Director) and Eva Sayers (Consultant), with our third Partner due to join the company in September. Each of the hires continues our focus on bringing varied expertise to our clients, genuine curiosity and intelligence and, with our latest hires, even more focus on building our networks for clients.
01
Three New Hires
Nepean welcomed the brilliant Molly Kate Vickers (Associate Director) and Eva Sayers (Consultant), with our third Partner due to join the company in September. Each of the hires continues our focus on bringing varied expertise to our clients, genuine curiosity and intelligence and, with our latest hires, even more focus on building our networks for clients.
02
Promotion of Harry Roxburgh to Associate Director
Harry Roxburgh, the longest-serving Nepeanite, took the step up to Associate Director. The next step in Harry’s career comes as he has excelled in account management for clients across private equity, financial services, real estate and more. Well done Harry.
02
Promotion of Harry Roxburgh to Associate Director
Harry Roxburgh, the longest-serving Nepeanite, took the step up to Associate Director. The next step in Harry’s career comes as he has excelled in account management for clients across private equity, financial services, real estate and more. Well done Harry.
02
Promotion of Harry Roxburgh to Associate Director
Harry Roxburgh, the longest-serving Nepeanite, took the step up to Associate Director. The next step in Harry’s career comes as he has excelled in account management for clients across private equity, financial services, real estate and more. Well done Harry.
03
New Office
New hires, new clients. That means new office. As we continued to grow, a new office beckoned and we left our beloved Mayfair ‘skyscraper’ and took the step to the City. Our new offices are now at 10 St. Bride St, London, EC4A 4AD, a short walk from Farringdon, Chancery Lane, St Paul’s or Blackfriars. Come and say hello.
03
New Office
New hires, new clients. That means new office. As we continued to grow, a new office beckoned and we left our beloved Mayfair ‘skyscraper’ and took the step to the City. Our new offices are now at 10 St. Bride St, London, EC4A 4AD, a short walk from Farringdon, Chancery Lane, St Paul’s or Blackfriars. Come and say hello.
03
New Office
New hires, new clients. That means new office. As we continued to grow, a new office beckoned and we left our beloved Mayfair ‘skyscraper’ and took the step to the City. Our new offices are now at 10 St. Bride St, London, EC4A 4AD, a short walk from Farringdon, Chancery Lane, St Paul’s or Blackfriars. Come and say hello.
The Nepean Perspective
The Nepean Perspective on H2 2026
As we reach the half year point, we want to take a look at the five trends and issues impacting the operating environments for Boards, Executives and Communications teams in the second half of the year.
New Government, New Impetus, No Money
We had long written in our pieces Heading Left and our Budget Review that this Government was on a collision course with reality. The public finances are simply getting worse, despite The Chancellor’s protestations, and the trade-offs have been getting more acute and visible since the heady days of the welfare reform climbdown. They have compounded and sapped authority. The last action of Keir Starmer’s Government was that in action: Defence or Welfare. The problem will not go away for a Burnham or any other Government. Genuine thinking needs to be done on the size of the state and the way that spend is balanced across priorities. So, for all the blue sky thinking from Burnham during the Makerfield by-election, he too is on course for a reality check. We envisage a new Labour Government taking the lesson on boldness. For us that means quicker policy delivery and change in consumer-relevant areas. It means, with the potential for Wes Streeting as Chancellor, a more fiscally attune approach to spending that actively addresses overspend in key areas to unlock investment in other areas. We can also hope that Manchesterism and its approach to public-private partnership comes back to Westminster. Key data point: Government debt is set to hit £3tn for the first time ever as spending on debt interest will be over a tenth of total government spend. [insert graph of welfare and interest spending projections]
New Government, New Impetus, No Money
We had long written in our pieces Heading Left and our Budget Review that this Government was on a collision course with reality. The public finances are simply getting worse, despite The Chancellor’s protestations, and the trade-offs have been getting more acute and visible since the heady days of the welfare reform climbdown. They have compounded and sapped authority. The last action of Keir Starmer’s Government was that in action: Defence or Welfare. The problem will not go away for a Burnham or any other Government. Genuine thinking needs to be done on the size of the state and the way that spend is balanced across priorities. So, for all the blue sky thinking from Burnham during the Makerfield by-election, he too is on course for a reality check. We envisage a new Labour Government taking the lesson on boldness. For us that means quicker policy delivery and change in consumer-relevant areas. It means, with the potential for Wes Streeting as Chancellor, a more fiscally attune approach to spending that actively addresses overspend in key areas to unlock investment in other areas. We can also hope that Manchesterism and its approach to public-private partnership comes back to Westminster. Key data point: Government debt is set to hit £3tn for the first time ever as spending on debt interest will be over a tenth of total government spend. [insert graph of welfare and interest spending projections]
Will the techlash cross the pond?
In the US, the anti-AI techlash is in full swing, spreading from college campuses and data centre protests into a genuine political dividing line – now shaping congressional primaries in New York, with figures as different as Steven Bannon and Bernie Sanders pushing for greater control. In the UK, by contrast, political consensus has stayed largely pro-AI despite public anxiety, barring the sovereignty debate. The transatlantic gap, especially among policymakers, comes down mostly to growth – Westminster is reluctant to meddle with one of the few parts of the economy on the up. But a shift in sentiment is coming. Sources close to Andy Burnham briefed the FT that “unfettered tech boosterism is a vote-loser”, and Labour factions emboldened by his rise are wary of the Green Party’s anti-capitalist gains. Layoff announcements and concerns over privacy and IP are fanning public anxiety further. So far, Palantir has been the exception rather than the rule, but more businesses could find themselves in a similar situation.
Will the techlash cross the pond?
In the US, the anti-AI techlash is in full swing, spreading from college campuses and data centre protests into a genuine political dividing line – now shaping congressional primaries in New York, with figures as different as Steven Bannon and Bernie Sanders pushing for greater control. In the UK, by contrast, political consensus has stayed largely pro-AI despite public anxiety, barring the sovereignty debate. The transatlantic gap, especially among policymakers, comes down mostly to growth – Westminster is reluctant to meddle with one of the few parts of the economy on the up. But a shift in sentiment is coming. Sources close to Andy Burnham briefed the FT that “unfettered tech boosterism is a vote-loser”, and Labour factions emboldened by his rise are wary of the Green Party’s anti-capitalist gains. Layoff announcements and concerns over privacy and IP are fanning public anxiety further. So far, Palantir has been the exception rather than the rule, but more businesses could find themselves in a similar situation.
Life after the ‘SaaSpocalypse’
Software, we’re told, is in trouble. The “SaaSpocalypse” narrative caught on fast, driven by sharp market reactions and a growing sense that AI reshapes not just how software is used, but what it needs to be. AI capability has advanced rapidly, but that curve won’t continue indefinitely – compute and cost constraints will bite. Software won’t vanish; what changes is where its value comes from, and how clearly companies can explain that to customers and investors alike. Some businesses are more exposed than others. Generic, repeatable software – Horizontal SaaS, tracking hours or sales conversations – is easier for AI to replicate. Industry-specific software in tightly regulated areas, where mistakes are costly – Vertical SaaS – is much harder to replace. That’s where the divergence will emerge. Winners and losers won’t simply be decided by who’s “added AI” – but by who can show they own something AI can’t easily copy: real understanding of clients’ day-to-day realities, and the trust that comes with it. At the same time, value is moving up the chain: as day-to-day work is automated, what sets a company apart is increasingly the thinking before the work, not the work itself. That’s the challenge for H2: repositioning efforts must be grounded in something real – a market position genuinely hard for AI to take, and a clear, honest story for why that value will last.
Life after the ‘SaaSpocalypse’
Software, we’re told, is in trouble. The “SaaSpocalypse” narrative caught on fast, driven by sharp market reactions and a growing sense that AI reshapes not just how software is used, but what it needs to be. AI capability has advanced rapidly, but that curve won’t continue indefinitely – compute and cost constraints will bite. Software won’t vanish; what changes is where its value comes from, and how clearly companies can explain that to customers and investors alike. Some businesses are more exposed than others. Generic, repeatable software – Horizontal SaaS, tracking hours or sales conversations – is easier for AI to replicate. Industry-specific software in tightly regulated areas, where mistakes are costly – Vertical SaaS – is much harder to replace. That’s where the divergence will emerge. Winners and losers won’t simply be decided by who’s “added AI” – but by who can show they own something AI can’t easily copy: real understanding of clients’ day-to-day realities, and the trust that comes with it. At the same time, value is moving up the chain: as day-to-day work is automated, what sets a company apart is increasingly the thinking before the work, not the work itself. That’s the challenge for H2: repositioning efforts must be grounded in something real – a market position genuinely hard for AI to take, and a clear, honest story for why that value will last.
Regulation and regulators as a Government policy lever
In May, Bridget Phillipson, Secretary of State for Education, wrote to the CMA about “challenges to accessing high-quality childcare” – explicitly framed around the Government’s cost-of-living objective. It requests policy proposals and “views” while reiterating the CMA’s independence, but reads as treating the CMA as an extension of policy delivery. This won’t be the last such letter. Government is drawing closer to regulators, treating regulation as a spend-free lever on policy objectives – pressurising regulators and quangos directly through new duties, directions and informal guidance, especially where consumers are affected. The upcoming Regulating for Growth Bill will hand Departments further control. At the same time, regulators are gaining greater powers to enforce directly – OFCOM through the Online Safety Act, the CMA through the Digital Markets, Competition and Consumers Act. Regulators are living in a new reality where Government, as a stakeholder, is more direct and more central to their operations and reputation. Regulated entities need to understand that dynamic when assessing regulatory issues.
Regulation and regulators as a Government policy lever
In May, Bridget Phillipson, Secretary of State for Education, wrote to the CMA about “challenges to accessing high-quality childcare” – explicitly framed around the Government’s cost-of-living objective. It requests policy proposals and “views” while reiterating the CMA’s independence, but reads as treating the CMA as an extension of policy delivery. This won’t be the last such letter. Government is drawing closer to regulators, treating regulation as a spend-free lever on policy objectives – pressurising regulators and quangos directly through new duties, directions and informal guidance, especially where consumers are affected. The upcoming Regulating for Growth Bill will hand Departments further control. At the same time, regulators are gaining greater powers to enforce directly – OFCOM through the Online Safety Act, the CMA through the Digital Markets, Competition and Consumers Act. Regulators are living in a new reality where Government, as a stakeholder, is more direct and more central to their operations and reputation. Regulated entities need to understand that dynamic when assessing regulatory issues.
Leverage shakeout to continue a difficult year for private capital
Despite more forthright defence of both equity and credit asset classes, private capital is still facing a reckoning – the underlying dynamics driving this reputational wave haven’t changed. Holding periods are longer than ever before. Leverage keeps layering through the system – at the borrower level, NAV loans and structured credit vehicles. Private equity distributions near decade lows for a fourth year running (MSCI 2026, the Distribution Drought) while gating funds has begun, LP patience is wearing thin. Continuation vehicles, secondary and evergreen funds, and diversified credit products have eased the liquidity squeeze but deepened questions around underlying asset value – and regulators globally are eyeing the asset class with suspicion too. Whether through restructuring, sales or refinancing, long-held, unsold and trapped assets at the sharp end of this environment will eventually need resolving – and owners, management teams and lenders will have to justify the terms. Doing so effectively, with clear strategy, future plans will evidence genuine resilience and be a win. All the while, Government-led pension reforms in the UK and US are bringing private capital to pensions and a new retail audience. More retail eyeballs means more scrutiny – the industry should start building trust proactively, rather than deflecting.
Leverage shakeout to continue a difficult year for private capital
Despite more forthright defence of both equity and credit asset classes, private capital is still facing a reckoning – the underlying dynamics driving this reputational wave haven’t changed. Holding periods are longer than ever before. Leverage keeps layering through the system – at the borrower level, NAV loans and structured credit vehicles. Private equity distributions near decade lows for a fourth year running (MSCI 2026, the Distribution Drought) while gating funds has begun, LP patience is wearing thin. Continuation vehicles, secondary and evergreen funds, and diversified credit products have eased the liquidity squeeze but deepened questions around underlying asset value – and regulators globally are eyeing the asset class with suspicion too. Whether through restructuring, sales or refinancing, long-held, unsold and trapped assets at the sharp end of this environment will eventually need resolving – and owners, management teams and lenders will have to justify the terms. Doing so effectively, with clear strategy, future plans will evidence genuine resilience and be a win. All the while, Government-led pension reforms in the UK and US are bringing private capital to pensions and a new retail audience. More retail eyeballs means more scrutiny – the industry should start building trust proactively, rather than deflecting.
Insights
Recent Nepean Perspectives
A look back at our Nepean Perspective reports and articles from the first half of the year, including analysis of Danish Elections, the not so obvious survival of green investment, the Diageo share price recovery and the long-term impact of financial vulnerability on UK political fragmentation.
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The Vulnerability Vote
Reform's local election surge is usually read as a straight revolt of the left-behind, but how true is that and how are people’s financial situations driving their vote? Working with Lowell and Opinium, we set the 2026 results against Lowell's Financial Vulnerability Index to assess the link between how people feel and are doing financially and how they vote.
The results are awkward for every incumbent: the decisive divide isn't financial vulnerability itself, but financial pressure without hope. Reform did best not in the most distressed places but a rung down – among the squeezed-but-coping. For Labour, the issues are far deeper. Labour's collapse was steepest in its own traditional and most financially vulnerable heartlands, where anti-incumbent votes fragmented across Reform, the Greens and independents rather than consolidating. The old bond between financial insecurity and the Labour vote has broken, and neither main party is trusted to mend it.
Key data point
Labour's share of councillors fell 26% in the most financially vulnerable areas, against just 4% in the least – the traditional bond between insecurity and the Labour vote, inverted.
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The Vulnerability Vote
Reform's local election surge is usually read as a straight revolt of the left-behind, but how true is that and how are people’s financial situations driving their vote? Working with Lowell and Opinium, we set the 2026 results against Lowell's Financial Vulnerability Index to assess the link between how people feel and are doing financially and how they vote.
The results are awkward for every incumbent: the decisive divide isn't financial vulnerability itself, but financial pressure without hope. Reform did best not in the most distressed places but a rung down – among the squeezed-but-coping. For Labour, the issues are far deeper. Labour's collapse was steepest in its own traditional and most financially vulnerable heartlands, where anti-incumbent votes fragmented across Reform, the Greens and independents rather than consolidating. The old bond between financial insecurity and the Labour vote has broken, and neither main party is trusted to mend it.
Key data point
Labour's share of councillors fell 26% in the most financially vulnerable areas, against just 4% in the least – the traditional bond between insecurity and the Labour vote, inverted.
01
02
03
04
05
06
07
08
09
10
The Vulnerability Vote
Reform's local election surge is usually read as a straight revolt of the left-behind, but how true is that and how are people’s financial situations driving their vote? Working with Lowell and Opinium, we set the 2026 results against Lowell's Financial Vulnerability Index to assess the link between how people feel and are doing financially and how they vote.
The results are awkward for every incumbent: the decisive divide isn't financial vulnerability itself, but financial pressure without hope. Reform did best not in the most distressed places but a rung down – among the squeezed-but-coping. For Labour, the issues are far deeper. Labour's collapse was steepest in its own traditional and most financially vulnerable heartlands, where anti-incumbent votes fragmented across Reform, the Greens and independents rather than consolidating. The old bond between financial insecurity and the Labour vote has broken, and neither main party is trusted to mend it.
Key data point
Labour's share of councillors fell 26% in the most financially vulnerable areas, against just 4% in the least – the traditional bond between insecurity and the Labour vote, inverted.