Eastern Eye (UK)
Robert Pickering on winds of change in the City of London
EX-CEO OF CAZENOVE REFLECTS ON EVOCATIVE PAST OF OLD-WORLD FINANCIAL SECTOR
ROBERT PICKERING’S insider account of working for the blue-blooded stockbrokers, Cazenove, is so fascinating and full of City drama – from the “Big Bang” to the firm’s joint venture with JP Morgan of America – that it deserves to be made into a film, like Wall Street.
Cazenove was long reported to have been the late Queen’s stockbroker, where Pickering was CEO from 2001 to 2008.
Readers of his book, Blue Blood: Cazenove in the Age of Global Banking (Whitefox; £24.99), are told: “Cazenove & Co. had been founded in 1823 by Philip Cazenove, a descendant of French Huguenots… Through a series of mergers the firm grew steadily… Cazenove also had a reputation for being blueblooded (i.e. upper class), publicity-shy, secretive about its affairs and extremely profitable. Before the likes of Goldman Sachs rampaged into the City in the late eighties, the partners of Cazenove were widely regarded as the City’s richest men (and they were all men, of course).”
But Eastern Eye began its interview with Pickering by seeking his opinion on the current banking crisis, triggered by the collapse of Silicon Valley Bank.
Pickering, who has seen it all before, explained: “The 2008 financial crisis was caused by concerns about banks’ solvency as doubts arose about the true value of the assets on their balance sheet. This, in turn, caused depositors to take fright and withdraw their money, thus precipitating the very crisis they had sought to avoid.
“This time round, the concerns relate not to subprime housing loans or exotic instruments like collateral loan obligations, but to the value of the banks’ bond holdings which have declined as interest rates have risen. The trigger is different, but the underlying cause is the same.”
Pickering was born in London in 1959, the son of Australian immigrant parents – his father, Richard, had built up a flourishing dental practice in Islington – and was educated at Westminster and Lincoln College, Oxford, where he switched from classics to law graduating with “a respectable secondclass degree in 1981”. He joined the elite legal firm, Allen & Overy in 1982, before moving to Cazenove three years later.
The latter had old world offices at 12, Tokenhouse Yard in “a narrow cul-de-sac nestled behind the Bank of England”.
When he went for a job interview in November 1984, “I was greeted by one of the liveried porters for whom the firm was famous.…Their favourite party trick was to relieve you of your umbrella on entry and return it on departure so beautifully furled that you were loath ever to open it again.” The building had one rickety lift, but “being invited to ride in it constituted VIP treatment at Cazenove”.
He met the partner in charge of recruitment, Harry Cazenove, whose “slim Oxford brogues glistened with the kind of mirror shine that only years of military training can impart although, in Harry’s case, I suspected there was a Jeeves figure in the background”. Also present was Christopher Smith, the partner in charge of corporate finance who telephoned and urged Pickering to reconsider when he turned down an offer.
“The following morning I phoned him again, this time accepting his offer,” recalls Pickering. “I have wondered many times how my career would have turned out if Christopher had not made that call.”
When the senior partner Anthony Forbes postponed a meeting, Pickering, then a “nobody”, received a handwritten note of apology. “It was my first introduction to the unique approach of the firm to relationships of all kinds.
“Anthony told me all about the firm, its philosophy and culture. ‘We are not so much a business,’ he said, ‘more like a group of friends who happen to work together. Ambition is good, but don’t be too obvious about it.’ ”
Pickering writes: “When I arrived at Cazenove in April 1985, the firm had 37 partners... almost half were Old Etonians with the remainder consisting of a smattering of Wykehamists, Harrovians, Radleians, etc… the closest the partnership came to ethnic diversity was Thomas Schoch, who was Swiss.
“There was also a variety of quaint customs. In the firm’s two dining rooms, three-quarter pints of beer were offered before lunch and port or Kummel liqueur afterwards and partners frequently returned to their desks puffing on large Havana cigars. Your salary was not paid directly into your bank, but into an account at the firm from which you could draw either cheques or cash. For a twenty-five-year-old, to be able to pay with a Cazenove-branded cheque was a heady experience. “On Friday mornings, the partnership secretary would proceed on his rounds, asking each of the partners how much cash they would like for the weekend (‘Spot of cash, sir?’, ‘Oh . . . err . . . five hundred, I think.’) and would then distribute this in wedges at the end of the afternoon.
“Then there was the legendary dress code epitomised by the oftquoted saying, ‘Shoes have laces’…. Once, when I had been with the firm for a few months, I went to work wearing a pair of slip-on, Gucci loafers. That morning, I had to go and see David Barnett, one of the senior partners supervising the dealing room. Nothing was said but, throughout our conversation, he kept his eyes fixed on my shoes. I never wore them again. “As for John KempWelch, the firm’s joint senior partner, he always wore a dark blue, pinstriped suit, hand-made by Savile Row tailor Anderson & Sheppard. I know this because I once happened to be in the partners’ cloakroom shortly after they had delivered half a dozen of these, each one costing over a thousand pounds in eighties’ money.”
Eastern Eye met Pickering in the café at the Design Museum, not far from his parents’ family home in west Kensington, which he still retains. He said Cazenove moved to a purpose-built building in Moorgate in 2003. He said he resisted the temptation to write a kind of PG Wodehouse caricature of his 25 years at Cazenove. “I wanted to write a serious book about a serious business, which is what we were.”
The “Big Bang” in 1986, under Margaret Thatcher, swept away restrictions in the operation of the London Stock Exchange. Cazenove stopped being a partnership in 2001 and became “incorporated” as a company in 2001. It also remained independent and refused – bravely – to be swallowed up by one of the big banks until it entered into a joint venture with JP Morgan in 2004.
“I was chief executive of the joint venture for three and a half years, (when) it did incredibly well. It was a very lucrative period of my career, but I didn’t enjoy it at all. And that’s why I left in the end.
“After we did the joint venture with JP Morgan, instead of having complete authority, I was constantly being undermined and having my position threatened, first, implicitly, and then quite explicitly, as I describe in the book.”
As CEO, Pickering wore only slips-on – “I stopped wearing lace-up shoes completely”.
In the City, he said the dress code has changed: “If you go into the City now and walk down Moorgate in a suit and tie, you feel overdressed. Before the pandemic I wouldn’t have dreamt of going into London EC2 not wearing a suit and tie. Whereas now you see guys wearing T-shirts and shorts and flip-flops.”