CITY AND SUBURBAN
The Balliol men of Tokenhouse Yard declare their independence
CHRISTOPHER F1LDES
It is said that there are three, not two, ancient universities: Oxford, Cambridge and Balliol. Just so in the City there are three, not two, kinds of Stock Exchange firm: brokers, jobbers and Cazenove. Come the Big Bang next month, brokers will meld with jobbers, and Cazenove will be more different than ever. It is a triumph and, for the City, an asset. Today, in their town house in Tokenhouse Yard, brick without, mahogany within, Cazenove look what in one sense they are, a firm of the old school — well-heeled, well-connected, well turned out. They are rated unique in their knowledge and command of the markets — showing companies how to use them, judging what the markets will take, making certain that they take it. Independ- ence, they believe, makes it possible. Now, alone among the big Stock Exchange firms, they have secured their independence. The Cazenove partnership has a bob or two of its own (though, being a partnership, it does nothing so exhibitionist as to publish accounts) and it has friends with a bob or two more. Cazenove have collected a syndicate of the most powerful institutions (mostly insurance companies) which will finance their underwriting of new issues, and so let them match the depth of pocket of the firms backed by banks. A similar group has put in £32 million of new capital, ingeniously arranged as a loan whose interest varies with Cazenove's profits (they would never part with equity, would they?). Cazenove have put their competi- tors to shame. There was nothing in the Big Bang reforms which required the major firms to forfeit their independence, often to foreign owners. They could have taken Cazenove's course. Instead they have handed Cazenove — of all things another unique selling proposition.
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