There's life in the old City townhouse yet as Cazenove
makes the weather
CHRISTOPHER FILDES
On a fine day the City feels like Hong Kong West: a global financial centre off- shore of the Thames where nationality no longer matters. On a bad day I mourn the old City, which has given up its pretensions of leadership and is content to provide the centre court, but not the champions. Cazen- ove is the exception and makes its own weather. Nothing could be more redolent of the old City, or, for that matter, old Eng- land, than the townhouse in Tokcnhouse Yard with the rickety lift, the mahogany panelling, and the courteous denizens whose shoes are always polished and have laces. At the time of Big Bang, Caz stood out when other brokers were selling out, believing that it had a future as an indepen- dent firm and — more old-fashioned still — a partnership. 'We will never go public', so Luke Meinertzhagen had said when he was senior partner. 'It is not fair on the future partners if the existing ones sell their good- will once and for all.' Caz's untrendy notions turned out to be right. Running a broking firm or an investment bank has been likened to herding cats, and a partner- ship serves to keep the cats happy and mousing. Goldman Sachs showed that, and so did Caz, but the catch about partnerships is that success makes them harder to sus- tain. In the end, GoWinans turned itself into a company and came to market. Now Caz is following suit and plans to come to market, too, in a couple of years. This is not, I am promised, a plan for the existing partners to sell their goodwill and retire to their country estates. In the old City's heyday the partners were the chief mousers, but nowadays the mice are brought in by whole teams who are scattered all over the world, and Caz wants to include them in its future as owners.
Test of character
CAZENOVE's first chairman will be David Mayhew: for him and for Caz, a sweet moment. He had been on Guinness's side in the fight for Distillers, when few holds were barred, and the police came to his house at breakfast-time one morning to arrest him. They were told that he had caught the early train to London, where (as it happened) he had a busy day ahead, rais- ing a billion pounds for Barclays. His part- ners had already commissioned their own inquiry, independent and professional, and, when this cleared him, they backed him. That was partnership under test. In time the charges were dropped and the Depart- ment of Trade and Industry's report, when at last it was published, was a vindication. Now he can look forward to bringing new capital in and to finding new markets. Companies in Europe are going to need help and advice, not necessarily from some great financial supermarket with its own products to plug. As always in business, character will be what matters most. Out- ward appearances may change, but I dare say that Caz shoes will lace up and that jelly ('not officer food') will never be served in the boardroom.
Digby digs in
MINISTERS used to know where they were with the dear old Confederation of British Industry. They could count on its directors- general (and on its presidents, too) to bang on harmlessly about the virtues of the euro. Now the sturdy Digby Jones thinks that his members are more interested in matters closer to home, such as roads (jammed), fuel (expensive), tax (which they have to collect) and regulation, a major growth industry. Perhaps the CBI should represent it. Flus- tered, the Prime Minister offers a Regulato- ry Reform Bill to grace the Queen's Speech. Promises, promises. He already has a Better Regulation Task Force, which under Lord Haskins has been at its task for three years. Before him came Michael Heseltine, who was almost as keen on deregulation as he was on intervening. Every so often some antique proscription on farriers or hansom- cabs is taken out and ripped up, ceremonial- ly, but the regulations that matter prolifer- ate. The fact is that ministers do this to please us. Every mishap sets off an instant demand for some rule that would have pre- vented it. Regulation, says Professor Charles Goodhart, is perceived as a free good. We see the benefit, but we are blind to the costs, direct and indirect. Hong Kong built an air- port in less time than we have taken so far to inquire into building a fifth Heathrow termi- nal. Rules about safety on railways make them safe by driving the customers out. I count on the sturdy Digby to say so.
Loophole's maestro
DRAFT Greenspan! This sensational twist in America's search for a president reaches me from my constitutional correspondent, J. Cheever Loophole, who was once played by Grouch° Marx and is still suing. The votes that count, Loophole says, are not the preg- nant chads of West Palm Beach but will be cast in the electoral colleges, one for each state, on the Monday before Christmas. The colleges are expected to vote as their states did, but there is nothing to stop the electors from bolting their tickets and backing the candidate of their own choice — nothing, that is, but the need to explain themselves when they get home. Loophole's idea is that they will get together and choose Alan Greenspan. Who better to unite his country than the central banker now credited with its prosperity? They can study his record in Bob Woodward's Maestro (Simon and Schuster, £17.99), sub-titled 'Greenspan's Fed and the American boom'.
If elected, sue
AS a narrative, Maestro is no more dramatic than the minutes of the Bank of England's monetary policy committee, but it shows the candidate in action. Here is the assiduous Washington operator, the master of creative ambiguity whose wife failed to decode his first two proposals of marriage, the Republi- can who was too tough for George Bush the First CI reappointed him and he disappoint- ed me') and then, under Clinton, let the good times roll. He was never a banker, is not a monetary economist, looks at every indicator in sight but trusts to his own weightings and to the pain in the gut that tells him not to do things. What would his gut tell him now about a career move across town to the White House? Already Barton Biggs at Morgan Stanley is urging the new president to get his recession over early, if he hopes to be re-elected in 2004. Loophole says that the colleges' votes will not be counted until January, but that if Mr Greenspan gets drafted he could always sue.
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