Walk in the front door of any of London’s financial institutions and ask the question “Who are your rising stars?” and you will elicit a standard response: a short cough, followed by the polite explanation that “we don’t really talk about star individuals here, our success is built on teamwork.”
But walk in the back door and have a casual conversation with the same executives and the initial impression is that those in the financial community talk about precious little else, apart from what the ‘rising star’ in question might be earning.
It is obvious that success in financial markets is dependent on the quality of the people - the fastest, most creative brains produce the bulk of the profit.
However, the typical financial institution does not want to talk about who, precisely, their rising stars might be for an equally obvious reason. These people are assets with a very tangible value and keeping that value under wraps is crucial to holding a successful bank, broker or investment firm together. Sing the praises of your most gifted performer and they may simply get poached.
Nevertheless the perennial desire to promote a team-driven culture, rather than a vulnerable collection of star individuals, can never be met. It is second nature in an industry full of competitive tension to talk about who is on the “up” escalator and who is going down. Word gets out.
That does not mean that there is anything approaching a consensus on who the financial stars of the future might be. The matter is far too subjective.
But there are a collection of names that occur repeatedly, and have been tipped by their peers as ‘the ones to watch’.
It is an eclectic mix, ranging from stiff-collared corporate financiers to pugnacious market traders. For some of the constituents it is easy to trace their financial DNA, noting how they were assisted up the City ladder. Others have simply appeared out of left field – individuals thrown centre stage by fast-moving market developments.
The burgeoning hedge funds are a good starting point, where the names of rising stars are relatively easy to identify. The sector may be renowned for its secrecy, but the fact that successful hedge fund managers are of-the-moment means the names of those in the ascendancy are quick to circulate. What is more, because successful hedge fund investment is as much about spotting the right individual, as much as the right investment style, this is a personality-led business.
Further eye-catching action is expected, as a result, from Peter Davies and Stuart Roden at Lansdowne Partners. They left the asset management division at Merrill Lynch in 2001 to take over what was then a $2bn fund. That amount has since grown by nearly 70 per cent, with the duo achieving 27 per cent growth last year – a year when the average hedge manager generated just 9 per cent. Their success is credited to a noticeably patient style, concentration on long-only investment opportunities and avoidance of frenetic trading.
Elsewhere among the hedge funds, Michael Hintze of CQS is considered smart and focused, and friends say that the recent embarrassment over his unveiling as a discreet lender to the Tory party will not knock him off his stride. His ambition is to build the Fidelity of the alternative investment industry.
Similar sentiments are expressed about the determination and intellect of Alan Howard, the 42 year-old former head of global proprietary trading at CSFB. He left the investment bank in 2002 to set up his own fund, Brevan Howard, which enjoyed a successful launch in the spring of 2003 – an initial $870m in assets grew to $1.2bn within one month. The fund was closed to new investors when it reached $4bn, and is now reckoned to be worth about $8bn.
Peers say Mr Howard is exudes energy. He is seen as an industry leader in persuading traditional institutional investors to allocate a portion of cash to the hedge fund sector.
Amongst private equity firms, the names of those rising quickly through the ranks include William Jackson of Bridgepoint, now generally regarded as among the most polished buyout specialists in the mid-market sector in London, while Lyndon Lea of Lion Capital is also widely regarded. Still only 36, Mr Lea led the breakaway of Hicks, Muse, Tate and Furst’s European arm at the beginning of last year. The new firm has a decidedly consumer focus and is perhaps best known for bagging the Wagamama restaurant chain last summer.
Amongst the more traditional asset managers, the name Anne Richards, Chief Investment Officer at Aberdeen Asset Management, receives a prominent mention. Along with chief executive Martin Gilbert, she is widely credited with saving Aberdeen from ruin after the company was embroiled in the “split caps” scandal in the early years of this decade. The former manager of Mercury Asset Management’s fabled Alpha team, Ms Richards, who is in her early forties, made a brave decision to join Aberdeen in 2003. Peers talk of her calm influence and integrity, and note her efforts in making sure that some of her key fund managers, such as Hugh Young in Asia, did not flee in the fall-out from the split caps debacle. Over the past two years Aberdeen has gone from strength to strength. Ms Richards’ organisational skills are also said to have been crucial in the integration of Deutsche Asset Management, whose London operations Aberdeen bought last year.
Among fund managers, there is much praise for Mark Tyndall, chief executive of, Artemis Investment Management, which has grown from start-up to a fully fledged £7bn fund management firm in less than a decade. Mr Tyndall, the fund’s architect, is one of four former Ivory & Sime managers who founded the firm in 1997. Since then it has managed the difficult feat of achieving brand recognition among retail investors through a combination of performance and aggressive billboard advertising. Nearly three-quarters of its assets are in retail funds, presenting a threat to more established fund management names. It has recently added hedge funds, venture capital trusts and investment trusts to its suite of products.
In terms of investment banking, there is much interest in those charged with rebuilding Morgan Stanley’s reputation following the fall-out from the drawn-out departure of former chief executive Philip Purcell. Among the key figures in this process are Franck Petitgas, now head of European investment banking, and Brian Magnus, co-head of investment banking in the UK. Mr Magnus sprang to prominence in London as a lead adviser to Marks & Spencer during its repulsion of Philip Green’s putative takeover bid. He is said to personify a new breed of banker at Morgan Stanley, with a down-to-earth style and a straightforward approach to negotiation.
One man who is regularly mentioned in trading rooms is Darrell Uden, head of equity syndication at Citigroup in London. Now 38, he first learnt the ropes at Swiss Bank Corporation when that bank cutting a swathe through London in the early 1990s. He then found himself at the cutting edge of equity capital market development at Robert Fleming before that bank, in turn, was swallowed by JP Morgan Chase. Under the American owners, Uden worked closely with Ian Hannam, who initiated a wave of South African flotations in London, such as Billiton and Xstrata.
Now at Citigroup, friends say his focus on bringing overseas companies to the London market is now more relevant - and more lucrative as the introduction of onerous Sarbanes Oxley rules to the US has driven companies towards London.
Those driving some of the newer market segments include JP Morgan’s Blythe Masters who, working with Bill Winters and Tom Frost at JP Morgan Chase, has been part of a team that is largely credited with the development of the modern, bustling and complex credit derivatives industry.
Among the toilers in research departments in the City, James Ratzer of New Street Research also rates mention. A top-ranked telecoms analyst at UBS, Mr Ratzer stepped over to the fully independent research sector in 2003, joining a team of about eight telecom-related analysts. New Street was founded by Iain Johnstone, a former JP Morgan analyst, after the conflict of interest scandals on Wall Street. According to fund managers, there is a fast growing demand for the uncompromised services of research analysts like Ratzer.