A visitor to Cazenove & Co in 1985 might be forgiven for thinking that little had changed since 1823 when Philip Cazenove, a descendant of exiled Huguenot financiers, set up a stockbroking firm with the (very successful) aim of profiting from industrialisation.
The City’s of London’s most upper-crust and well-connected brokerage was still headquartered in a grand Victorian townhouse behind the Bank of England — all marble fireplaces, mahogany desks and oil paintings. Before lunch, three-quarter pints of beer were served; afterwards, port and cigars. Staff were paid into a special Cazenove account from which they could draw cash via a helpful administrator who would do the rounds on Fridays, asking, “Spot of cash, sir?”
In the decades since, the old ways of doing things have been overturned, not just at Cazenove — which managed to maintain its independence longer than many of its old City rivals — but across the Square Mile and the financial sector as a whole in the wake of the “Big Bang” reforms unleashed by the UK government in 1986.
As such, Robert Pickering’s Blue Blood, a kind of biography of the firm on its 200th anniversary, is an enlightening insight on how the City of London was transformed. It evolved from a clubby UK-focused ecosystem, where tight relationships between brokerage houses and the British businesses they advised were greased by the private school and Oxbridge alumni that helmed both. At its peak in 2008, when Pickering’s story ends, it had become Europe’s and the world’s leading financial centre, only to fade again since then, thanks to the twin traumas of the financial crisis and Brexit.
This story is all the more powerful for being written by the man who was the firm’s chief executive as it changed as much in the space of a few years as it had in decades. Pickering’s self-published account ably evokes that transformation over his 23-year Cazenove career — from junior twenty-something right through to the frenetic overhaul of its structure and ownership and his eventual ousting.
There is one striking oddity: this is a book that could have been published in 2008. It concludes with Pickering’s departure as CEO in the early months of that year. What began as a corporate portrait fades away into nothingness, with no attempt to recount Cazenove’s fortunes in the ensuing 15 years. A shortcoming, but also perhaps a symbol of Cazenove’s diminishing relevance. Today the name exists only as a sub-brand of Schroders Investment Management, which bought Cazenove Capital, and as a British sub-brand of JPMorgan, which bought the core business.
Still, Blue Blood is a fascinating read for anyone interested in the City’s recent history — particularly its thriving heyday in the 1980s and 1990s. Through the triumphs and travails of Cazenove, retold in vivid and sometimes amusing prose, the reader is transported back to some of the key junctures in the City’s evolution — just as it was being dragged from a fusty, clubby way of operating towards a more efficient, less parochial future.
In keeping with the times, the firm 20 years ago traded its venerable HQ for a sleek new base at 20 Moorgate. And yet the opening celebration — a lunch with Eddie George, then governor of the Bank of England — was a classic throwback. Cazenove turned off the building’s fire alarm system, consciously invalidating its own insurance, to accommodate George’s prodigious smoking habit, and when the governor asked for pre-lunch whisky, a junior was dispatched to the local Tesco Metro.
Pickering’s status as an outsider to the old “Caz” culture — Westminster, not Eton; son of Australian immigrants, not native aristocracy — benefits his book, as it seems to have benefited his career. As he tells it, vintage Cazenove was full of toffs — “anti-intellectual” but with a culture of lucrative “native cunning”.
Cazenove’s first — modest — refreshment of culture came through the hiring of people like him. But meritocracy rarely seems to have involved hiring senior women. In one priceless passage, one female JPMorgan junior, faced with the prospect of working with Cazenove, complains: “I can’t go . . . I’ve just looked at the dress code; women have to wear skirts, no pantsuits. I only own pantsuits for work.” It is unclear whether Pickering’s footnote — “I don’t know where she got this idea from. Women had been permitted to wear trousers at Cazenove since the early 1990s” — is tongue-in-cheek or not.
Pickering seems occasionally embarrassed by just how unreconstructed Cazenove was, but he was clearly a signed-up member of the fraternity himself. Names — from Blackstone’s Steve Schwarzman (“as smart as anyone I ever met during my City career”) to other Wall Street giants such as Michael Klein of Citigroup and Goldman’s Hank Paulson, and many more — are liberally dropped.
As Caz’s independent future becomes untenable in the face of mounting competition, there is a lengthy account of various rival bids — most notably from Lehman Brothers (a move that Pickering, in a deadpan aside, says would have been “a disastrous mistake”). Ultimately, a rather messy combination with JPMorgan ensued, beginning as a joint venture, with a wholesale buyout after a few years.
Perhaps the most surprising revelation is just how hapless Cazenove was when it came to managing itself. There are long, aimless discussions with potential buyers and a ham-fisted implementation of a joint venture that always looked set to be problematic.
Blue Blood is full of notable detail about the culture clash between a US powerhouse and an oh-so-British broker. Despite his insistence that much of his management focus was on cost-cutting, excessive habits endured. He recalls one awkward example of a trip to the US by several London-based JPMorgan executives who found themselves on the same flight as some Cazenove colleagues. Boarding the plane, the Cazenove contingent headed for first class, their JPM masters for business.
To any City watcher, one of the richest contributions of Blue Blood is the character portraits of famous Square Mile names, most notably David Mayhew, Cazenove’s fabled chair and dealmaker par excellence. Pickering’s descriptions of Mayhew’s slightly awkward charm, his unmatched client relationships and negotiating nous, are pitch perfect.
In an ideal world perhaps, it would have been Mayhew himself — the man so closely associated with the heyday of Cazenove — who would have written this book. But his chief executive made a pretty good stand-in.
Blue Blood: Cazenove in the Age of Global Banking by Robert Pickering, Whitefox £24.99, 416 pages
Patrick Jenkins is deputy editor of the FT
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