One of the hubs of City deal-making from the past decade is to become the power base for the new financial services regulator.
The Bank of England is set to announce as early as next week that the Prudential Regulatory Authority – the part of the soon-to-be disbanded Financial Services Authority that will be folded into the Bank – will have its headquarters at 20 Moorgate, the old HQ of broker JPMorgan Cazenove.
The choice of building, which is still subject to the final details of lease negotiations, according to people close to the process, fulfils several key criteria for the Bank. In contrast to the FSA’s current offices in Canary Wharf, 20 Moorgate is close to the Bank’s base on Threadneedle Street – only about two or three minutes away on foot.
It is also large enough to accommodate the 1,000-1,200 people who are expected to constitute the PRA, and strikes the requisite balance between being smart and decent value for money.
Other potential choices included the smart, new-build Walbrook complex a few hundred metres to the south-west, but most alternatives were apparently discounted on grounds of cost or excessive glitz.
The building – erected in 2001 with a neo-classical exterior design and a modern glass-and-steel interior – has nine floors in total, comprising more than 14,000 square metres, according to agents DTZ. It was opened with some fanfare – and neat symmetry – by the last governor of the Bank of England, Eddie George, later Lord George.
Former Cazenove chairman David Mayhew sees 20 Moorgate as the place where the broker came into its own. “It was very good for our health – it was beautifully light and airy,” he told the Financial Times. “But it was also the place where we moved our brand into the mainstream.”
Cazenove was founded in the early 19th century and had been based around the corner in a maze of buildings in Token House Yard for decades. But when the broker decided to end its partnership structure – first with a plan to float, then later via a joint venture deal with Wall Street giant JPMorgan – modern offices in a prime location became crucial.
Mr Mayhew, the embodiment of the Cazenove brand until his retirement a few months ago, remembers 20 Moorgate was the setting for a decade of big client deals – from the mammoth restructuring of BT in 2001 to HSBC’s record £12.5bn rights issue in 2009, with Cazenove’s own gradual takeover by JPMorgan, sealed along the way between 2004 and 2009.
The Bank has been looking for a home for the PRA for the past year, following the decision by the incoming coalition government in mid-2010 to break up the FSA into a prudential regulator and a separate supervisor of companies’ behaviour, the Financial Conduct Authority.
The FCA, which accounts for about three-quarters of the FSA’s staff, is expected to remain in the current Canary Wharf building, potentially sub-letting freed-up space to outside tenants.
Although the legal framework for making the changes officially has yet to be enacted – and may be a year away – the FSA this month split itself internally, in effect creating a shadow PRA and FCA. Any move of staff to the new building is also likely to be some time away.