Tomorrow's Business Today
A grand investment bank, terrified of the press
Blue Blood* isn’t the most notable tell-all book just now, but for a certain crowd it holds as much interest as the other one.
It’s an account of Cazenove’s final chapter as an independent, highly influential and deeply grand City investment bank.
The decisions to float and later sell to JP Morgan were genuinely historic; in some ways they were shocking. They said a lot about the fresh pressures on the Square Mile, ones even the grandest of banks couldn’t resist.
Robert Pickering, the chief executive from 2001 to 2008, tells it well. The cast of City and Wall Street names that flitter through include David Mayhew, of course, but also Ian Hannam, Dick Fuld and Bob Diamond.
Cazenove’s brand position as the most discrete, most highly bred investment bank is well protected, mostly, but there are some reminders that they were just bankers in the end.
One dispute is settled thusly: “Channelling my inner Michael Corleone, I told John, ‘My offer is this…nothing.”
Pickering admits “there is no management problem so knotty that it can’t be untangled by referring to The Godfather: Part II”.
What’s striking to the hack is how much the firm cared about the press. It famously hardly ever issued a press release and was supposed to be so far above Fleet Street wittering that you assumed they didn’t read us.
It turns out they fretted constantly.
My own killing contribution to the float process was the revelation that the decisive meeting took place, not in some impossibly grand City dining hall, but at the Heathrow Hilton.
Scandalously, I am not name checked for this important work.
Charlie Pretzlik, then of the FT, later of Cazenove itself, now of Brunswick, does get a mention.
“In person, Charlie was the epitome of boyish charm but he could be pretty acerbic in print…that could be seen as reason enough for us to have hired (him).”
That’s a nudge to those hacks who eye a move into a lucrative City job. Sucking up to the bankers won’t help – you have to be an irritant.
As the float process begins and Cazenove is more publicly exposed than at any time since it was founded in 1823, one FT headline ran: “One Man Band Going Cheap.”
Pickering notes the paper thinks that, “having lifted our skirts, our ankles had proved to be a bit scrawny”.
You have to forgive the well-bred bankers this sort of language. One of many things they don’t know is just how out of date that stuff is.
Pickering becomes so wary of the press he begins to doubt the wisdom of trying to build relationships with any hacks (his PRs at Brunswick disagree).
But he gets frustrated when hacks dare to write about the amusing tit-bit they have picked up rather than the story Caz is pushing.
“It underlined the importance of remaining guarded at all times with the press and never allowing yourself to forget that they are in the business of selling newspapers, not parroting your message,” he says, as if that were a clever lesson to learn.
“The best ones…are expert at getting you to reveal more than you intend, and if they then choose to publish, it’s your fault not theirs.”
Quite. His best words on the press are actually in our defence.
“When a company boss complains about the press or blames them for a fall in their share price, it is a sure-fire sell signal,” he says – something no one told Prince Harry.
For hacks and flaks what emerges from the book is how much these guys fear one side and need the other.
At the time, it never seemed like they cared.
Press release of the day
The market for IPOs was dire in 2022. Will it be better this year? Some commentary here from Josh Warner at City Index on just that.
He says: “There are hopes that the IPO market will stage a recovery in 2023 thanks to a backlog of companies in the pipeline that plan to go public after delaying their plans in 2022.”
But if inflation remains high and the economic wobbly, many firms might delay again. Which in turn is bad news for City bankers already at risk of losing their jobs.
Stories that will keep rolling
1) Have Wall Street banks seen profits rocket due to higher rates? Is there any chatter in the US about windfall taxes?
2) How is the pound reacting to the GDP figs?
3) How will those figures influence the Bank of England on interest rates?
4) Will the FTSE hit an all-time high today?