‘I left the City and never looked back’
A decade after the crash, Eleanor Steafel meets the bankers who swapped their bonuses for bee-keeping and baking
If you had told Sarah Hilleary, when she was sitting at her desk on the wealth management floor of Merrill Lynch in 2007 – as all around her jobs were being axed and the financial services markets were descending into chaos – that in eight years she would be baking gluten-free madeleines for Prince Andrew and David Cameron, she would have laughed you out of the room.
As a junior wealth manager at the American bank, right when mortgage firms were folding at an ever-increasing rate and the world looked set to plunge into a catastrophic recession, Sarah found herself at the centre of an increasingly hostile industry.
“The mood in the bank had changed dramatically,” she says. “There was fear in the air. It was an oppressive atmosphere, and I felt like it was creeping towards my department.
“People had started to be made redundant and I thought, ‘Well it hasn’t hit us yet but it probably will’. I didn’t want to be working in an environment where I was going to get knocked out.”
Rather than stick it out in the hope the bank would continue to offer the huge redundancy pay-offs they were doling out (and quickly ceased, when they realised how many cuts would have to be made), Sarah – who was then 28, with no mortgage or children – decided to jump before she was pushed.
Today marks a decade since the start of that crisis, which changed the face of global financial services. Exactly 10 years ago, French bank BNP Paribas announced it was suspending three hedge funds that specialised in sub-prime loans – lending money to people with poor credit histories, or who may have had difficulty paying them back – a market not previously talked about outside the world of high finance. A month later, on September 14, 2007, Northern Rock revealed that the Bank of England had stepped in to support it, leading to the first run on a British bank for 150 years. Customers queued outside branches to withdraw savings, while the Government had to guarantee deposits to stop the chaos.
The world was tumbling over the precipice. Banks collapsed, unemployment soared, and some governments even went bust. For a decade, politicians, regulators and financiers have sought to find ways to recover from the crash and stop a similar catastrophe happening again.
For Sarah, any such concerns now stem from life as a businesswoman, rather than inside the banking world. After handing in her notice at Merrill Lynch, she used modest savings (and spent a large amount on her credit card, which “had a nice credit limit because of my previous job”) to start a company making luxury, gluten-free baked goods at her shop in East London. Since then, B-tempted has catered events at Downing Street and St James’s Palace; and her products are stocked in Whole Foods, Harrods and Fortnum & Mason.
It may seem like a dramatic change, but thousands of people have left the City since 2007 to pursue careers in the creative industries.
In the first eight years after the crash, British banks cut more than 180,000 jobs. Londoners will never forget that September afternoon in 2008, when the Lehman Brothers headquarters in Canary Wharf became a tourist hotspot, as the 4,000 people who lost their jobs in the capital that day left the building, carrying boxes filled with their belongings.
According to the Office of National Statistics, the number of people working in financial services (excluding insurance and pension funding) is at its lowest level since the crash, with 498,000 people employed, compared with 631,000 a decade ago.
Sarah hasn’t looked back, despite starting her business in the midst of a recession. She says that she “knows the value of money” more than ever.
“Working in the City, especially when you’re young, you don’t get a sense of how much things actually cost. I went through a period where I had to make ends meet to get this business off the ground. You realise the things you don’t actually need.”
Ed Venables, a former hedge fund manager who worked in investment banking for 12 years, also saw the darkness coming, and got out before the recession’s first wave hit.
Now an economics teacher and housemaster at Wellington College, he recalls being so desperate to leave the City that he prepared for his interview at the independent school while his wife was giving birth to their second son, Barney.
“I wasn’t desperately popular,” he admits. “But if I hadn’t got this job I don’t know what I would have done. I had even looked into becoming a doctor about a year beforehand but realised it would all take too long.”
Ed was working for asset management company Cognis Capital, and remembers well the intolerable atmosphere. “It was scary. I was in the high-yield credit market, so we saw it coming before everyone else.”
Ed, 42, acknowledges he is one of the lucky ones, having found a second career he loves and which allows him to support his family of five. Leaving behind an income that put him among “the 1 per cent”, Ed has only in the past year earned a salary to match that of his first paycheck in the City, where he was a 21-year-old Classics graduate with, he admits, “no knowledge of banking at all”.
“I’m getting a fraction of what I was paid before. Each month, everything, plus some savings, gets spent. But I’m still paid in the top bracket of income in the UK, I know that. And I wouldn’t go back.”
While many opted to leave finance during that time, others stayed and weathered the storm. Dale Gibson, 60, went through several crashes in 36 years in the City. When the financial services market was edging towards the precipice in 2007, he stayed as a stockbroker, finally leaving last year – after having, he says, “stuck at the trench” for nearly a decade – to become a beekeeper.
“I saw out the crash, and the 10-year recovery, and then bailed. You can’t accuse me of dropping my rifle and retreating,” he jokes.
Dale – who runs Bermondsey Street Bees with his wife – says that, while the early months of 2008 were stressful, it was less traumatic than Black Monday, in October 1987 when “the screens went blank”.
“That’s real panic. When there are no dealing prices and your clients are transacting at the market price, but there isn’t a price advertised on the screen. The screens never went blank in 2007.”
These days, Dale looks after hives at Lambeth Palace and Soho Farmhouse. The business is going from strength to strength, though he “wouldn’t try to raise a family” on beekeeping (his two sons are already grown). And after 36 years of getting up at 5.30am and sitting at a desk all day, he rises an hour later, goes upstairs, and tends to his bees on his rooftop in the shadow of the Shard.
“Thankfully, the bees aren’t that active at that time of the morning, unlike the financial services market.”