COMPANIES Relocation is so popular with hedgies and daytime TV that a collision is inevitable*:
Amanda Lamb: Welcome to Escape from the Bulge Bracket! Our guest today is Deepak Gulati who wants to get away from JPMorgan in Zurich, while giving London a wide berth. So why Zug? Is it the fresh Alpine air? Or the incredibly low tax rates?
DG: Hard to say, Amanda. Above all I’m determined to integrate with the locals.
AL: By taking on voluntary work?
DG: I was thinking more in terms of setting up a $1bn hedge fund.
AL: That would do it round here. Last week I helped an ex-UBS guy buy a B&B in the Dordogne. Are you redundant too?
DG: Absolutely not. JPMorgan wanted to inject my proprietary trading operation into its asset management arm in anticipation of Dodd Frank. But I’d rather strike out on my own.
AL: Hope you like our featured property, a traditional Swiss chalet. If you bought it, you could make it your own with cushions and knick knacks.
DG: Or by installing an emergency generator in the cellar, a trading room on the ground floor and helipad on the roof.
AL: Ooh, I like the idea of a helipad! Staying in contact with old friends is so important when you relocate. Particularly when you’re a prop trader who suddenly finds himself without access to valuable data flows of the kind you only get within an investment bank. Not to mention billions in low-cost capital.
DG: I expect I’ll rub along.
AL: If it doesn’t work out you could always join the delta operation of another bank. They’re often prop desks in all but name. Or you could open a B&B too.
DG: You can stop filming, thanks.
*As imagined by Lombard
The anticipation is like the audience buzz before a play starts, writes Alison Smith. In among a string of deals announced in the US – including the merger of American Airlines’ bankrupt parent and US Airways and the $28bn cash purchase of HJ Heinz by Warren Buffett and 3G Capital – comes news that Vodafone has discussed a bid for Kabel Deutschland. Is this the moment the curtain goes up on the long-awaited City revival in M&A?No. The factors that have contributed to the UK telecoms group’s decision to seize the moment for a foray into European cable consolidation are pretty specific. They include entrepreneur John Malone being busy elsewhere buying Virgin Media, and do not translate to other sectors.While the other deals signal change in the air in the US, they do not guarantee that US corporate cash piles will find their way across the Atlantic.First, they are not really expansionary. The airlines deal is about reducing excess capacity, while the Heinz takeover is about long-term value. Neither is as positive for M&A as a trade buyer acquiring a strategic asset in a way that prompts rivals to look at acquisitions too.Second, even if these transactions do presage a wave of M&A by US companies, the UK is not an attractive destination, combining as it does uncertainty about access to EU markets with politicians prone to complain about the loss of a so-called national treasures. Anyone on the edge of their seats for a 1980s-style wave of M&A can safely sit back.
