This surprised me. I remember the euphoria associated with the 2006 dinner, the tinge of fear in 2007, and then the despondency of the 2008-2010 dinners as bankers struggled to cope with a world that reviled them. This year, even though markets are booming, and some believe we may be witnessing a reprise of the bubble conditions that prevailed in 2006, the bankers seemed downbeat and even downtrodden. I ascribe this partly to increased regulatory scrutiny and partly to the fact that very few areas of investment banking are still growing. Growth brings excitement and a spring in the step. Dealing with regulators and paring back businesses leads to a furrowed brow.
A banker who does indeed have a spring in his step is Ken Moelis, chairman and CEO, of Moelis & Co, the advisory firm which went public earlier this year. At the Euromoney dinner, Moelis was named Euromoney’s banker of the year for his achievement of founding, and successfully growing and listing, his advisory business. As I have always found Ken interesting, open and fun to talk to, I went over to congratulate him and we had a brief discussion. A few weeks later, I saw Moelis interviewed with revered corporate activist, Nelson Peltz of Trian Fund Management, on a business television network. It became apparent that Peltz values Moelis’ advice highly and that the two men go back many years. Peltz even referred to Moelis affectionately as ‘Kenny’.
After watching the interview, it crossed my mind that maybe I had been a bit forward by wandering over to the top table, during the Euromoney dinner, to engage Moelis in small talk. But I swiftly dismissed this uncharacteristic bashfulness. After all, it’s not really in the DNA of a journalist to adopt the demeanour of a shy debutante.
Summer lull
As a summer lull descends, and London empties, I am turning a few things over in my mind. Why for instance, as the UK economy strengthens and sterling powers ahead, are the share prices of UK banks wilting? I understand the limp performance of Barclays. People have lost faith in the new broom of Antony Jenkins. But isn’t Lloyds the bank most closely aligned with the UK economy? Surely a strong Britain should mean a strong share price for Lloyds? HSBC’s share price is also going nowhere. Is the bank tainted with the whiff of emerging markets, or is it perceived to be ‘too big to manage’?
And my antennae are on red alert when it comes to Standard Chartered. The share price was as high as £18 in March 2013 but is down by a third. We seem to be in a circle of falling profits and fleeing executives. Pressure is mounting on both the dividend and the job security of chief executive, Peter Sands and chairman Sir John Peace.
This drift is painful for stakeholders and I would not be surprised if there was a big shake-up before the year is out.
McNally and Kilsby
Finally, a shout-out to Andy McNally, UK chairman of Berenberg, who is leaving the bank after 12 years. He was instrumental in building the firm’s robust equity platform and I will be interested to see where he surfaces next. And many congratulations to Susan Kilsby, chairwoman of UK-based pharmaceutical company, Shire, which has just agreed to a £31 billion takeover from America’s AbbVie, at a hefty premium. I met Kilsby, several years ago, when she was a senior investment banker at Credit Suisse, and found her charming and competent. Susan was only appointed to chair Shire this spring, and pundits are starting to whisper about where ‘can-do’ Kilsby might hang her hat next, should she choose to move on.