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London top

for femalefund heads

LONDON has emerged as the equaltop location for female hedge fundmanagers, a new study publishedtoday finds.

The capital hosts 16 of the top 50leading women in hedge funds, whobetween them manage several billionpounds worth of assets, according tothe study by the Hedge Fund Journalin association with professional serv-ices firm Ernst & Young.

Traditionally, hedge fund business-es have been male dominated, but women are making an increasingcontribution to the sectors develop-ment and success.

There are also 16 female US femalehedgies on the list, the same numberas Londoners, in a sign that other cen-tres are eroding Londons traditionaldominance of the industry.

Among the UK female hedge fund bosses on the list is the embattledElena Ambrosiadou of Ikos, who isalleged to have ordered a privatedetective to snoop on her estrangedhusband and other colleagues at thefund.

The 50 Leading Women in HedgeFunds 2011 survey definitely showsthe role of women in hedge funds isexpanding, said Bill McIntosh, editorof the Hedge Fund Journal. This is anindustry that is innovative and chang-ing rapidly, in short, an ideal environ-

ment for talented women to tap newopportunities.FEMALE FUND STARS: P6-7

BY RICHARD PARTINGTON

HEDGE FUNDS

Nearly three in four financial workers named Asian cities as likely generators of the most jobs in the coming year Picture: REX

CITY workers are looking towards theFar East for the fastest expanding jobopportunities, a survey from a topheadhunting firm out today reveals.

Almost three quarters of banking orhedge fund staff named eastern Asiancities as the leading job-creators forfinancial services, according torecruiters Astbury Marsden.

Singapore will create the mostfinancial services jobs in the next year,according to more than one in three(37 per cent) respondents.

The news coincides with HSBCsdecision to boost its headcount inChina and Singapore by 2,000 in thenext five years. The finding also comesat a time when record numbers ofLondoners are looking East for workand career progression.

Cities close to emerging marketsare at the forefront of the globalexpansion in financial services, saidAstbury Marsden CEO Mark Cameron.

As well as Singapore, City workersnamed Shanghai (19 per cent) andHong Kong (17 per cent) as boomingareas for financial services. Fewerthan a quarter (22 per cent) expectLondon to lead the way for new jobs.Just one per cent named New York.

The news chimes with evidencefrom recruitment firm Hays and itsresearch partners Oxford Economics.

BANKING SET FORASIAN JOBS BOOMBY JULIAN HARRIS AND JOHN DUNNE

FINANCIAL SERVICES

www.cityam.comIssue 1,387 Monday 23 May 2011 FREE

Highly skilled westerners will increas-ingly migrate to emerging economiesin the east, they forecast.

I foresee a lot of people in the westmoving to places like China, wheretheyll be very welcome, economist Jens Tholstrup said. Whereas inwealthy countries, we put the shutters

down on migration.Demand for financial services willsoar as emerging economies develop

at a rapid pace, Oxford Economics, aconsultancy, is predicting.

Singapore ranks 28th in the worldfor competitive personal tax levels,with a 20 per cent top rate. The UKnow ranks 83rd out of 86 countriessurveyed by consultants KPMG.

Where companies are operating in

more than one country both businessand personal taxation become moreimportant, with the importance of

personal taxation increasing steadily with the number of countriesinvolved, a Deloitte survey found last year. Relatively high levels of busi-ness and personal taxation haveresulted in a significant perceiveddecrease in [the UKs] attractivenessover the past 10 years.

Corporation tax in Singapore wasreduced to 17 per cent two years ago.ECONOMICS: P12-13

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News2 CITYA.M. 23 MAY 2011

UK ready forObama visitPRESIDENT Obama will hold crunchtalks with David Cameron onWednesday to discuss the global econ-omy and the allied response to theconflicts in the Middle East.

Obama will arrive in the UK tomor-row morning, when he is scheduled tomeet with the Queen in BuckinghamPalace.

He will then go to Westminster Abbey to meet both David Cameronand Ed Miliband. The full meetingwith Cameron will be held the follow-ing day.

The trip will stress the importanceof the special relationship betweenthe US and the UK, with Obamaspress director saying Theres no closerally for the United States in the world.

He added: we are coordinating

with them and closely aligned withthem on issues ranging from ourefforts in Afghanistan, our counterter-rorism efforts, our ongoing efforts inLibya, our G20 agenda, and our non-proliferation activities.

Before arriving in the UK, Obamawill visit Ireland, where he will meet with President McAleese and PrimeMinister Enda Kenny.

He will arrive in France for the G8meetings on Thursday where he willalso meet President Medvedev ofRussia, before flying to Poland.

VOICE OF THE CITY PANEL: P9

BY STEVE DINNEEN

POLITICS

BAIN PULLS OUT OF RAC AUCTIONBain Capital has pulled out of the bid-ding for RAC, the roadside rescue busi-ness of UK insurer Aviva. The USprivate equity group last week droppedout of the auction after bidding lessthan its rivals, people close to the situa-tion said. That leaves Carlyle, ClaytonDubilier & Rice and BC Partners still inthe running for the company, which isvalued at about 1bn.

CDB SEEKS TPG STAKEChina Development Bank, one of thecountrys largest state-owned banks,has applied to regulators for permis-sion to join a group of sovereign wealthfunds buying a minority stake in buy-out firm TPG, according to peoplefamiliar with the matter. CDBs requestis the latest indication of the privateequity fever sweeping China as deal-

makers leave the major buy-out firmsto set up their own investment firms.

SHORT SELLERS SET TO TARGETLINKEDIN

Shares in LinkedIn are expected tocome under downward pressure thisweek, as they attract the attention ofaggressive traders who are preparedto bet on a fall in the business net-works stock price. Tomorrow restric-tions on short selling the stock will belifted. A short sale involves borrowingstock and selling it, in the hope thatthe price falls and it can be bought back more cheaply generating aprofit.

FOOD PRODUCERS ACCUSED OVERPALM OILPlantation owners and pressuregroups are calling on food producerssuch as Unilever and Nestl to stopexploiting an environmental offsetscheme to buy palm oil from unsus-tainable sources. Growing demandand spiralling prices in the $50bnpalm oil market mean plantation

owners are clearing forests to plantmore palm trees.

CITY WATCHDOG QUESTIONS FAILEDBANK OVER SIR FREDS OFFICEAFFAIRRoyal Bank of Scotland is braced forthe City regulator to refer to Sir FredGoodwins alleged affair with a col-league in its long-awaited report intothe banks collapse. As fallout fromSir Freds superinjunction spreads,the Financial Services Authority (FSA)has contacted the bank for details ofthe alleged liaison involving the for-mer RBS chief executive.

SIZE MATTERS AS COMPUTER MAKERSFALL ON HARD TIMESA combination of a tighter economicenvironment and the advent of tabletcomputers has put the squeeze onthe makers of traditional computersand laptops. Demand was at a stand-still in the first three months of this

year as consumers and businesses putoff buying new equipment.

JAGUAR LAND ROVER TO PROVE RECOV-ERY WITH 1BN PROFIT Jaguar Land Rover will this weekunveil record annual profits exceed-ing 1bn, completing the luxury carmakers remarkable recovery fromthe depths of the recession. JLR is fore-cast to post net profits in the region of1.1bn for the year to 31 March, com-pared with a gain of 32m last yearand a 281m loss in first 10 monthsunder new owners Tata Motors. Therecord profit comes only two yearsafter the car maker was forced to seekGovernment support

SOHO HOUSE SALE CALLED OFFSoho House has been taken off themarket after its two shareholdersagreed not to sell the business for atleast another year. The private mem-bers club business received a number

of private equity approaches valuingthe business at as much as 300m.

RUSSIAN FIRM LEADS IPO PACKEight initial public offerings willmake their US debuts this week, buttheres one standout: RussianInternet search engine Yandex NV.Consumer Internet stocks are a hotcommodity now, especially followingLinkedIn stellar initial public offeringlast week, during which its sharesdoubled on the f irst day.

TNT PRESSED TO SELL EXPRESS BUSINESSDutch logistics company TNT NV ispreparing to separate its mail andexpress operations, but pressure onmanagement at the express businessis mounting as doubts grow over itsability to deliver a turnaround andsome shareholders argue the compa-ny should explore a sale. If sharehold-ers approve the companys split-upproposal, Chief Executive Peter

Bakker will depart, leaving behindsome unhappy investors.

WHAT THE OTHER PAPERS SAY THIS MORNING

Greece is fast running out of money

IT is looking worse by the day forGreece as the debt crisis trundlestowards its inevitable and disastrousendgame. A default, however dressedup, can now only be a matter of time:the cash is fast running out.

There is growing panic in Frankfurt,home of the European Central Bank(ECB), which has emerged as one of thebiggest unforeseen victims of Greecesimplosion. The ECB, formerly a bastionof conservatism, has found itself sad-dled with vast amounts of dodgyGreek bonds. Their loss in value would be crippling were Athens to fail to

meet its next interest payment or evenif a softer rearranging of Greek loanstakes place. Astonishingly, the ECBcould actually become insolvent, trig-gering a major constitutional crisis in

Europe. A bust ECB could start print-ing itself out of trouble, in defiance yetagain of the European Treaties, butthat would surely be a step too far forGerman public opinion. Already, someGerman academics are suing theauthorities, arguing convincingly that the treaties ban bailouts of impru-dent countries and that these aretherefore illegal. Given that the Greekbanking system would have collapsedhad the ECB refused to accept Greekbonds as collateral for its injections ofliquidity, there is no easy way out.

One delaying tactic would be forGreece to privatise as much as possibleto raise cash. This process has alreadystarted. One of the countrys biggestproblems is its corporatist nature: real,deregulated, hard-core capitalism isneeded to start creating real jobs andto build a sustainable economy. The

idea floated by Jean-Claude Juncker,the Eurozone grandee, that Greece cre-ate an independent agency, includingforeign experts, to manage the privati-sation of state assets, is a sound one.

Such an agency could be modelled onthe German Treuhandandstalt agencythat very successfully privatised EastGerman companies after the fall of theBerlin Wall. Crucially, sell-offs need tobe conducted openly; this must be nopost-Soviet corrupt carve-up.

But while privatisation is a goodidea in theory, no foreign investor withany sense should touch any of theseassets. If Greece were to quit the euroand adopt a new currency, it wouldimmediately undergo a massive deval-uation of at least 50 per cent, with for-eign owners of Greek assets sufferingcommensurately massive losses.Unfortunately for the Greek govern-ment, it would be equally silly forGreek citizens or firms to invest in pri-vatised assets. For them, the only hopeis to export as much capital as possibleoutside Greece before all hell breaks

loose, the local banking system isnationalised, capital controls imposedand a far-left government elected.Local bank accounts and assets wouldsee their value trashed in the event of a

euro exit and devaluation; but moneyand assets invested abroad wouldretain their value. Capital has beenfleeing Greece for many monthsalready why would anybody buck thetrend and risk ruin by investing in theHellenic economy?

For investors, the strategy is clear:keep well clear of any institution withexposure to Greece or any other trou-bled Eurozone economy. For Europeanpoliticians, however, the task is alto-gether more difficult: the mighty eurothey spent so long building is underthreat, not from the dollar, anotherrival superpower or even from Britisheurosceptics, but from the internalweaknesses and contradictions that itsopponents had always warned wouldbe the single currencys downfall.

[email protected] me on Twitter: @allisterheath

MOTORSPORT tycoon BernieEcclestone yesterday played downtalk of Lakshmi Mittal, Britains rich-est man, taking full control of foot-ball club Queens Park Rangers.

Formula One boss Ecclestone, whoowns 62 per cent of the west Londonclub, compared the situation toRupert Murdochs recent interest in buying CVC, which owns the com-mercial rights to F1. Mittal put a

statement out to say he was going tobuy all the shares on Monday [today],said Ecclestone, who owns 62 per centof the newly-promoted PremierLeague outfit.

But its a bit like these Murdochpeople saying theyre going to buyCVC. They have forgotten to ask if itsfor sale.

Indian steel magnate Mittal cur-rently holds a minority stake in QPR.Ecclestone, 80, has previously said for-mer chairman Flavio Briatore hasfirst refusal on his shares.

BY FRANK DALLERES

SPORT BUSINESS

QPR takeover talk cooled Ecclestone owns 62 per cent of QPR Picture: ACTION IMAGE

NEWS | IN BRIEF

Iceland volcano shuts airspaceA new volcanic eruption is affectingflight paths around Iceland and couldspread into Europe, forecasters warnedyesterday. Icelandic airspace was shutfor parts of the day. European carriersincluding British Airways said last nightthey were not expecting any disruption

as a result of the Grimsvotn volcanoerupting, and volcanologists were hope-ful that the ash released would be lessdangerous for planes than the disruptiveclouds last April. Ash could reach north-ern Scotland tomorrow and parts ofBritain, France and Spain by Thursday orFriday, airlines were warned.

Cabinet to volunteer a day a yearPrime minister David Cameron hascalled on his Cabinet to volunteer theirservices for a day a year as part of hisBig Society initiatives. In a speech todayhe will say he wants to make givingmore of a social norm. And when I saywe - I mean literally we the Cabinet.Were all giving at least a day a year vol-unteering. And were encouraging all ourcivil servants to do the same. Cameronwill say he wants to prove the govern-ment is about more than just cuts.

EDITORS LETTER

ALLISTER HEATH

7th Floor, Centurion House,24 Monument Street, London, EC3R 8AJTel: 020 7015 1200 Fax: 020 7283 5334Email: [email protected] www.cityam.com

EditorialEditor Allister HeathDeputy Editor David HellierNews Editor David CrowNight Editor Katie HopeBusiness Features Editor Marc SidwellLifestyle Editor Zoe StrimpelSports Editor Frank DalleresArt Director Craig GaymerPictures Alice HeppleCommercialSales Director Jeremy SlatteryCommercial Director Harry Owen

Head of Distribution Nick Owen

Editorial StatementThis newspaper adheres to the system of

self-regulation overseen by the Press ComplaintsCommission. The PCC takes complaints about theeditorial content of publications under the EditorsCode of Practice, a copy of which can be found atwww.pcc.org.uk

Printed by Newsfax International,Beam Reach 5 Business Park,Marsh Way, Rainham, Essex, RM13 8RS

Distribution helplineIf you have any comments about the distributionof City A.M. Please ring 0207 015 1230, or [email protected]

Obama is expected tostress the importanceof the special rela-tionship between theUS and the UK.

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GREEK Prime Minister GeorgePapandreou will discuss new meas-ures with his cabinet today to cut the budget deficit, in an effort to con-vince lenders Greece can deal with adebt crisis without a restructuring.

At stake is a 12bn (10.4bn) aidtranche under the EU/IMF bailoutagreed last year, as well as additionalhelp as the country is not expected toreturn to bond markets in 2012.

Debt restructuring is not underdiscussion, Papandreou said in aGreek Sunday newspaper interview.

But at the same time he concededthat it does not appear at present

THE editor of a newspaper that print-ed the identity of a footballer whotook out a super injunction to hide analleged affair yesterday said he wantedto spark debate over current lawswhich fly in the face of logic.

In an interview with City A.M.,Sunday Herald editor Richard Walkersaid he does not believe his newspaperrisks falling foul of the courts.

He said: This information is avail-able to everyone, but newspapers arenot allowed to even mention it. So ourdecision to run the story wasnt basedon the individual case it was aboutlooking at press freedom.

The current situation flies in theface of logic. Everybody knows [thefootballers] identity we are nottelling anybody anything they didntalready know.

The newspaper, owned by regionalpublisher Newsquest, ran a front-pagestory featuring the face of a prominentPremier League footballer with a thin black line covering his eyes and theword censored written across it.

The caption below the photographread: Everyone knows that this is the

footballer accused of using the courtsto keep allegations of a sexual affairsecret. But we werent supposed to tellyou that...

City A.M. is not allowed to reveal hisidentity while the injunction stands.

Some lawyers have questioned thelegality of breaking the gagging order.However, Walker said: Injunctionsgranted through an English courtdont apply in Scotland.

Its not a case of declaring war onthe English courts. Were a Scottishnewspaper, we dont distribute inEngland, the story isnt on our websiteand we believe it was right to run thisstory. Former Miss Wales ImogenThomas claims to have had an affair with the player, who yesterday fea-tured in over 12,000 posts on Twitter.

A footballer last week launchedlegal proceedings against themicroblogging site in a bid to uncoverthe identity of a user who posted infor-mation about alleged super injunc-tions. In a separate case, a journalist whom we are also banned from nam-ing could face jail after postingdetails about an alleged injunction.

The Attorney-Generals office lastnight said it would investigate theSunday Herald if asked to do so.

Editor stands

by decision tobreak order

EMBATTLED cabinet minister ChrisHuhne came under renewed pressureat the weekend over allegations heasked someone else to accept penaltypoints on his driving licence for aspeeding offence.

The energy secretarys positionappeared to worsen, after it wasreported that he could be gearing up

to change his version of events.He was said to be prepared to tellpolice this week that he could not besure whether he was driving his car when it was caught travelling overthe speed limit by a camera in Essexin 2003.

It is alleged that the MP asked hisestranged Vicky Pryce to take thepoints in order to avoid a driving ban.

Huhne is fighting for his politicallife over the allegations.

Huhne faces freshspeeding questions

Greece vows to continue budgetcuts and avoid debt restructuring

BY STEVE DINNEEN

MEDIA

WORLD ECONOMY

Former Miss WalesImogen Thomasclaims to have hadan affair with theplayer, whose namehas been revealedin Scotland

Picture: GETTY

BYRICHARD PARTINGTONPOLITICS

News 3CITYA.M. 23 MAY 2011

that Greece will be able to cover itsborrowing requirements in 2012 nor-mally, from the markets.

Papandreou must present a fiscalplan this week that is credibleenough for the European Union andthe International Monetary Fund tocontinue bankrolling his country.

One year into its EU/IMF 110bn(96bn) bailout, Greece is strugglingwith weak revenues and deep reces-sion. The European Central Bank isopposed to any debt restructuring forfear of contagion.

Meanwhile the chairman of the 17-country Eurogroup Jean-Claude

Juncker said Greece should set up anagency to privatise its state assets.

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COMMERZBANK, Germanys second biggest bank, yesterday announcedplans to raise 5.3bn (4.6bn) by sell-ing new shares to repay state funding.

The issue price comes at a 45 per-cent discount to Fridays closing priceof3.95, and 30 per cent below thethe theoretical ex-rights price (TERP).

The bank stated it will sell 2.44bnnew shares at2.18. Shareholders will

be allowed to sign up for 10 newshares for every 11 already held from

24 May to 6 June, the company said.The rights issue is part of a series of

measures Commerzbank plans to useto return 14.3bn of the 16.2bn thestate injected into the bank duringthe financial crisis. This will help freethe bank from government controlssuch as a cap on bonuses.

Since the beginning of May,Commerzbank shares have lostaround 12 per cent in value.

Banks had guaranteed the full vol-ume of the proceeds and negotiated

the discount on the new shares priorto the announcement of the capitalmeasures in April.

Germany took a 25 per cent stakein Commerzbank and full ownershipof Hypo Real Estate during the crisis.

It also invested in so-called silentparticipations, a form of non-votingcapital, in Commerzbank, AarealBank and WestLB. The 5.3bnCommerzbank intends to raiseincludes the state Financial MarketStabilisation Funds partial contribu-tion of its silent participations, the

bank said yesterday.

Commerzbankissues sharesat big discount FRENCH economics ministerChristine Lagarde is the frontrunnerto take over the post of managingdirector of the International

Monetary Fund (IMF).Chancellor George Osborne said

over the weekend he will formallynominate her for the position, which

became vacant after DominiqueStrauss-Kahn resigned so he couldfight sexual assault charges.

Osborne said Lagarde was the out-standing candidate who had shownreal international leadership aschair of the G20 finance ministersthis year.

German Chancellor Angela Merkelcalled her an experienced figure ofexcellent standing and French interi-or Minister Claude Gueant, formerchief of staff to President Nicolas

Sarkozy, said Lagarde would make anexcellent head of the Washington-

based lender.However Mexicos finance ministry

said it would nominate central bankchief Agustin Carstens, placing aprominent emerging market nameinto the race to lead the global lender.

And the finance ministers of South Africa and Australia were also luke-warm about Lagardes candidacy, call-ing for candidates to be selected onability rather than nationality.

FALLEN IMF chief Dominique Strauss-Kahn worked on his defence againstsexual assault charges yesterday at aManhattan apartment where he isunder house arrest following releasefrom jail.

Under strict bail conditions,Strauss-Kahn, 62, was not allowed tostep outside the apartment at 71Broadway, in the heart of New Yorks

financial district.The building itself was besieged by

US camera crews with satellite TVtrucks and a contingent of French

journalists. The impressive tower astones throw from New Yorks oldestchurch and the New York StockExchange even quickly made it ontothe New York tourist route.

Tourist buses yesterday could beheard highlighting on your right isthe building where the IMF chief isnow under house arrest.

Lagarde tippedas frontrunnerfor IMF top job

Strauss-Kahn getting towork on his trial defence

Former IMF chief hides away in a Manhattan apartment Picture: REUTERS

BY JENNY FORSYTH

BANKING

WORLD ECONOMY


BYHARRY BANKSENFORCEMENT

ANALYSIS l Commerzbank

28 Feb 18 Mar 1 Apr 29 Apr 18 May

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SUPERMARKET chain Morrisons isbeing touted as the frontrunner in therace to buy into rival Iceland, aftermajority owner Landsbanki officiallylaunched a sales process for its holdingin the company.

The Resolution Committee forLandsbanki said last week that accord-ing to advisers UBS and Bank ofAmerica Merrill Lynch, market condi-tions are currently favourable for thesale of its 67 per cent stake in the com-pany.

Analysts have valuedIceland, which operatesaround 780 stores acrossthe UK, at about 1.5bn.

Buying the portfolio would help achieveMorrisons chief executiveDalton Philips aim ofstrengthening its presencein London, andexpanding into theconvenience storemarket.

Morrisons is theonly market buyerthat makes sense,though it may stillcome up against com-petition issues, saidan industry source.

If Morrisons wereto launch a bid, it islikely to face oppo-

sition from thecompanys man-

agement, led by chief executiveMalcolm Walker (pictured).

Walker, who owns 26 per cent of theretailer, bid around 1bn for theremainder last year and is likely to stayin the running as the auction pro-gresses.

Any potential bid by Morrisonswould be complicated by the fact thatboth Landsbanki and the Iceland man-agement have hired the supermarketgiants two go-to banks as advisers.

The Landsbanki committee hasmandated Bank of America MerrillLynch, while the stores managementis advised by Rothschild, which

worked for Morrisons on its takeoverof Kiddicare in February. Adding Icelands current marketshare of close to two per centwould take Morrisons within spit-ting distance of closest rival

Sainsburys, which has a 16.3 percent UK market share.

A spokesperson forMorrisons had no com-ment on rumours of abid.

Sainsburys alsodeclined to commenton speculation that itmight be interested,

but it is seen as theleast likely potentialbidder, after it lookedat Icelands portfolioin 2005 but only

bought one store.Tesco and Asda said

they did not commenton market speculation.

Morrisons isleading race

for IcelandBY ELIZABETH FOURNIER

RETAIL


Deal would shake up the supermarketsCOMPETITION objections notwith-standing, Icelands 780 stores wouldbe a huge boost to Morrisons forecastearnings, giving it the foothold in theconvenience store industry that chief

executive Dalton Philips made cen-tral to its growth plans last year. They would also cement

Morrisons presence in the south ofthe country. Though the Bradford-based company has made an impacton London and the South East sinceits takeover of Safeway in 2004, itsshare of the London market is stillhalf of what it is elsewhere.

UK grocers as a whole are trading

at a discount to their European peers,but Morrisons is particularly under-valued especially when you consid-er its shares are beating the STOXXEurope 600 retail index by nine per

cent. Though like-for-like sales in thefirst quarter of 2011 were up 2.5 percent and well ahead of analyst fore-casts, it remains discounted due to itslack of exposure to foreign marketsand to multichannel retailing acrossconvenience stores and the internet.

Its acquisition of both baby websiteKiddicare and a 10 per cent stake inUS online grocer FreshDirect earlier

this year will have gone some way toproving its ambitions, but a move forIceland would cement Philips plansand ease Morrisons transition intothe smaller-store market, currently

dominated by Tesco and Sainsburys.Morrisons clearly wants to play with the (even bigger) boys, and itsshare price is likely to start to reflectthat sooner rather than later.

Invest now and be rewarded for itsambition.

BOTTOMLINEAnalysis by Elizabeth Fournier

SUPERMARKET SWEEP | HOW MORRISONS AND ICELAND COMPARE

Founded in 1899 asa Bradford marketstall by WilliamMorrison

Runs 442 UK stores

Paid 3bn forSafeway in 2004 toexpand into thesouth of the UK

Bought 38 Co-op /Somerfield stores in2008 for 223.1m

Has an 11.9 per centmarket share as of

April 2011

First store opened inOswestry, Shropshirein 1970

Runs around 750stores across theUK

Headed by MalcolmWalker, who found-ed the company andreturned to its helmin 2005.

Taken private in2005 followingfour-year period ofdeclining profits

Has a 1.9 per centmarket share as ofApril 2011

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THE TOTAL value of assets undermanagement run by female hedgefund managers has more than dou-bled to over $200bn (122.8bn) inthe space of a year, according to thelatest Hedge Fund Journal andErnst & Young study.

Women managed just $45m inhedge fund assets last year,accounting for just three per centof the $1.5 trillion global market.

But a surge in the number andperformance of high-flying femalehedge fund managers has seentheir share hit ten per cent of the$2 trillion of assets now held infunds worldwide.

The money women are running

is at least $100bn if allocators areincluded, based on the 30 portfoliomanagers in this years HedgeFund Journal survey.

If the nine female chief operat-ing officers from the top hedgefund firms are included, the figureis pushed up a further $100bn.

Each fund manager in the listruns at least $1bn and has beenmanaging money for at least 10years.

Amongst the highflying London

fund managers on the list is MinaGerowin, the top lieutenant tosuperstar hedge fund chief JohnPaulson.

Gerowin is the managing direc-tor of the New York-based Paulson& Cos London operations, whereshe heads several funds.

Andrea French, the chief operat-ing officer for trading at the eliteBrevan Howard hedge fund, isanother high flying female execu-tive.

She is ultimately responsible forthe firms $30bn flagship fund, aswell as a clutch of UCITS launchesthat lie behind Brevans assetgrowth.

Two women from rival hedgefund giant Man Group, MichelleMcCloskey and Victoria Parry, also

make the list. Another 34 top female fund

managers also make up the list,from the financial centres ofSingapore, Hong Kong, Geneva andParis.

Michael Serota, global hedgefund practice co-leader at Ernst &Young said: We congratulate thewomen that made the list this year,and we look forward to workingwith them and their colleagues formany years to come.

Londons newfund queensBYRICHARD PARTINGTON

HEDGE FUNDS

Focus: Hedge Funds6 CITYA.M. 23 MAY 2011

MORE NEWSONLINE AT

www.cityam.com

ANDREA FRENCH

Partner & COOtrading,Brevan Howard.

VICTORIA PARRY

Head of productlegal, Man Group.

MICHELLE

MCCLOSKEY

Head of fundresearch, ManMulti Manager.

MARTINA

SLOWEY

Chief operatingofficer, EdomaPartners.

PENNY AITKEN

Global head ofinvestmentresearch, FQSCapital Partners.

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Focus: Hedge FundsCITYA.M. 23 MAY 2011 7

GERALDINE

SUNDSTROM

Partner, BrevanHoward.

KATHRYN

GRAHAM

Director, BTPension FundManagement.

MELISSA HILL

Managing principal,Sabre FundManagement.

DAHLIA DANA

Portfolio manager,J RothschildCapitalManagemen.t

FIONA CARPENTER

Chief financial offi-cer, TT International.

GALIA

VELIMUKHAMET

OVA

Portfolio manager,Man GLG.

EFFIE DATSON

product head,dbSelect Platform,Deutsche Bank.

EMILY PORTER-

LYNCH

Portfolio manager,USS.

MINA GEROWIN

Managing director,Paulson & Co

ANITA NEMES

Global head of cap-ital introduction,Deutsche Bank.

CATHERINE

CRIPPS

Investmentdirector, GAMMulti-Manager.

OF THE 50 leading women in hedgefunds, one name stands out abovethe rest.

Elena Ambrosiadou, who runsthe 1.8bn Ikos hedge fund, is well-known as a powerful hedge fundboss and as one of the wealthiestwomen in the world. But she is cur-rently in the news for more contro-versial reasons.

The Greece-born businesswomanis embroiled in a spying scandal forallegedly ordering a large-scale sur- veillance campaign against herestranged husband and other ex-staff.

She is alleged to have ordered aprivate detective to spy on MartinCoward, her ex-husband, to uncoverinformation that could potentially

be used in a legal dispute.A top fund manager who owns

the worlds largest private sailing yacht in the world, the 300ftMaltese Falcon, she set up Ikos in1993 with Coward in London.

She relocated to Cyprus in 2007for tax reasons.

She has been at the forefront ofhedge fund developments inEurope for two decades.

Coward, who quit the company

in 2009 yet remains a co-owner, is a

mathematician and mastermindedthe trading algorithms used by Ikos. Ambrosiadou is also alleged to

have ordered spying operationsagainst several other Ikos workers.

Snooping scandal hitshedge fund superstar

BYRICHARD PARTINGTON

HEDGE FUNDS

ELENA AMBROSIADOU

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LABELUX luxury goods group yester-day announced the acquisition of

Jimmy Choo, the upmarket shoebrand.

Labelux was founded by AustriasBenckiser family in 2007 with theaim of creating a significant newglobal player in the expanding luxurygoods sector. Its existing portfolioincludes Swiss luxury shoe brand

Bally, acquired in 2008, and Italianaccessories brand Zagliani. Under theownership of the private group

Jimmy Choo will concentrate onexpanding its presence in the US,

Asia and continental Europe. JimmyChoos experience in the US will alsohelp Bally expand there.

Jimmy Choo was founded in 1996in London by Tamara Mellon, a for-mer accessories editor for Vogue, andshoemaker Jimmy Choo.

Labelux was the frontrunner to

buy the luxury shoe group after out- bidding competition from TPGCapital, Investcorp and US retailer

Jones Group. Private equity firmTowerbrook Capital Partners is sellingthe shoe label which it bought four

years ago for180m. A source closeto the seller said the deal was wortharound 500m. Goldman Sachs andMorgan Stanley ran the auctionprocess for Towerbrook whilstRothschild acted as financial adviserfor Labelux.

Labelux ties up JimmyChoo shoe deal for 500mBY PHOEBE TORRANCE

M&A


MORE NEWSONLINE

www.cityam.com

ROTHSCHILDS Akeel Sachak led ateam of eight advising Labelux histhird involvent in a Jimmy Choo deal.

Sachak, who is Rothschilds global

head of consumer products, was alsoan adviser in the 110m sale of theluxury label by Phoenix EquityPartners to Lion Capital in 2004 andthe 180m sale by Lion to Towerbrook

Capital Partners.He said that while the latest sale

process had taken around fourmonths, dialogue started as long astwo years ago. Rothschild also advisedon Labeluxs debt financing.

Sachak described Labelux headPeter Harf as one of the shrewdestbusinessmen I have dealt with,adding that he was building a broadluxury goods portfolio.

Recent deals that Sachak has also

been involved in include the sale ofQuorn for Premier Foods, the sale ofConstellation Brands Australian andEuropean wine business and the $8bnsale of Femsa beer to Heineken.

MEET THE ADVISERS

AKEEL

SACHAK

ROTHSCHILD

Jimmy Choos creativehead Tamara Mellonwill stay at the company

Picture: REX

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Visit our space at ncp.co.uk

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HIGH street bookmaker Betfred haslaunched a last-minute scramble towin racing industry support for its bid to buy the Tote, the state-backed bookmaker.

The gaming firm has stepped upits bid by offering to create an advi-sory board for the Tote, with seatsfor racing industry executives.

Betfred is seen as the straggler inthe race to buy the government-owned turf accountant to a bidfrom Sir Martin Broughton, the for-mer Liverpool Football ClubChairman.

The Tote Development Boardbeing wagered by the firm wouldcomprise of senior executives from

the major racecourse groups, anelected representative from theindependent course and a seniorracing director from the Tote.

Betfred is offering the panel, which would help to bring thecommercial future of Tote in line with racing industry desires, inorder to allay concerns the book-maker has the best interests of rac-ing at heart.

Fears had been raised that thebetting firm was solely interestedin the Tote for its 517 shops andportfolio of 840 premises.

The racing industry has alreadycome out in vocal support for SirMartins Sport InvestmentsPartners (SIP) bid.

Several heavyweight industrygroups, including the British

Horseracing Authority, theRacecourse Association and theHorsemens Group, have pledgedto support his offer.

This new body gives racing adirect voice at the table to influ-ence the commercialisation anddevelopment of the Tote and willalso enable Betfred to benefit fromthe experience and knowledge ofthose who run the racecourses,said Betfred chief financial officerBarry Nightingale.

It will be a tight forum for deci-sion making and, consistent withour overall strategy for the Toteand for racing, it aligns commoninterests, he added.

A decision on the future of theTote is expected from the govern-ment as early as this week.

Betfred scramblesto woo racing execsBYRICHARD PARTINGTON

LEISURE

THE UKs five largest banks have failedto meet a Project Merlin target formaking 76bn of credit available tosmall and medium size businesses(SMEs) this year, the Bank of England isset to reveal today.

Preliminary figures showed that inthe first three months of the year, the banks RBS, Lloyds, Barclay, HSBCand Santander lent 16.8bn to smallbusinesses. That is a 12 per cent short-fall on the quarterly target of 19bn.

But the Treasury said it is cheeredby overall business lending, which hascome closer to the Merlin benchmark

during the last three months, with thefive institutions lending around47.2bn compared with an expectedquarterly rate of 47.5bn.

The Merlin deal set out annual

lending targets in a bid to improvetransparency in the banking sector,though the tallies from the latestquarter are the first indication of howthe banks are living up to this ele-ment of the Project Merlin commit-ments.

The firms said in February theywere able to lend 190bn during the year, 76bn of which was to go tosmaller businesses.

Yesterday a spokesman for the Bankof England refused to comment onthe figures, saying the Banks onlyrole was providing a statistical servicefor the government.

Bank chiefs will no doubt be on ten-terhooks waiting for government

reaction to the finalised figures today.Prime minister David Cameron has

already warned they could face a bar-rage of new bank levies and taxes forfailing to keep credit f lowing.

Banks miss smallfirms loan target

of Project MerlinBY JENNY FORSYTH

BANKING

TOTE ADVISORY BOARDSeats for racecourseexecutives on a steeringpanel for the futurecommercial direction ofthe Tote.

INSTANT CASH DEALBetfred has the moneylined up and ready topay the government forthe Tote. The Treasurycould be keen on a quicksale to fix the nations

battered finances.

RACING CASH PLEDGE11m guaranteed to beploughed back into theracing industry in thefirst year of Betfredsownership and then aminimum of 9m for thenext two years. The firmis offering the cash forthe next seven years ofthe lease it would winfor the Tote.

TOTAL OFFER200m

STOCK MARKET FLOATSir Martin Broughtonwould float the Tote onthe AIM market in orderto fund his purchase andthe future of the busi-ness.

BOARD SEATSThe public structure ofthe company wouldenable Sir Martin tooffer racing industryexecutives seats on the

board of the company todecide its future.

PRIVATE EQUITYTo allay concerns overthe difficulty of raisingequity on the AIM mar-ket, SIP has got backingfrom private equityhouse Oakley Capital.

RACING CASH PLEDGE11m per year to racingin perpetuity.

TOTAL OFFER200m

STAKE SELECTIONS TIME & MEETING STAKE SELECTIONS TIME & MEETING

City split on so-called Cadbury lawwhile Obama support stays strong

In association withPoliticsHome.com

Apply to join today atwww.cityam.com/panel

Almost as many City opinion formerswould back a Cadbury law making itmore difficult for foreign companiesto take over UK ones as oppose it.

According to the latest poll byPoliticsHome and City A.M., 44.6 percent would back changes to currentrules, with 47.9 per cent saying theywould oppose them. A further 7.6 percent said they did not know.

The poll also showed that over 50

per cent of respondents would votefor Obama, compared to 32.5 sayingthey would vote for a republican can-didate. Even among Tory votersObama fared well, with 36.7 per centbacking him compared to 43.4against.

The City also voted overwhelminglyin favour of outsourcing public servic-es, with 65.8 per cant in favour and

just 30 per cent against.

Pol itics Home .co mPol itics Home .co m PoliticsHome.comPoliticsHome.com

NESTLES chairman hopes to stay onthe board until 2017 and reiteratedthat the food producer has until 2014to decide on its stake in French cos-metics company L'Oreal, a paperreported yesterday.

Peter Brabeck said in a weekendnewspaper interview he aimed to stayon the Nestle board until the statuto-ry limit, which was 72 years old.

"I could therefore stay on the boarduntil 2017, which is my wish," he said.

The maker of Nescafe coffee, KitKatchocolate bars and Maggi soup hasbegun a push into the growth marketof foods with health-benefit claims,and plans to invest 500m Swiss francs(351m) in its new subsidiary in thenext decade.

Brabeck said he expected 10 per-cent annual growth for the unit.

Asked whether the health sciencepush was designed to position Nestlefor a full bid for L'Oreal, in which itholds 30 per cent: It is primarilyabout the long-term direction.

Nestle chair tostay on boardfor six years

FOOD MANUFACTURING

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Geoghegan spent his two-monthbreak after leaving Acision in Marchclimbing the worlds highest moun-tain in aid of The Ireland Fund.

Geoghegan reached the summit ofEverest at 2.30am last Thursday and,ever the banker, he organised a heli-copter to whisk him away from thesummit to Kathmandu, before flyinghome to Dublin to spend time withhis wife and four daughters beforestarting at Citi on 4 June.

RAINMAKING WONTSTOP PLAY AT CITYS

CHELSEA POWER SHOWTONIGHT the worlds of high financeand horticulture will collide at themost popular fixture in the City year:the Chelsea Flower Show charity gala.

BSkyB chief executive JeremyDarroch was spotted eyeing up gar-den sheds at last years Chelsea pre-

view, while Topshop boss Sir PhilipGreen known in the City as PG isalso a regular at the UKs most high-powered garden party.

There will be a terrific turnout,said Robert Swannell, chairman ofM&S (below), ahead of his confirmedappearance at this evenings sold-outgala near Sloane Square. For me itis always a particular pleasure as my

wife and I share a keen inter-est in gardens.

Swannell and his wife, both trustees of the KewFoundation, will no doubtmake a beeline to the Kewshow garden. However,other City names will gatheraround the Royal Bank ofCanadas New WildGarden and M&GInvestments M&GGarden, billed as a

modern take on the traditionalkitchen garden.

But never mind the planting. Whois actually invited to tonights gardenextravaganza, where 5,000 guests will

be served champagne and canapesbefore 1,000 sit down to dinner in var-ious corporate-hosted tents?

The Royal Horticulture Societyrefused to give details of the guestlist, but it is a safe bet that the seniorexecutives of M&G Investments, thelead sponsor of the gala and theshow, will have a strong presence.

So thats M&G Investments CEOMichael McLintock and its ownerPrudentials group CEO Tidjane

Thiam accounted for. Moving on tothe bankers, The Capitalist hears

Lazards London chief executive William Rucker is expected, as isMarcus Agius, group chairman ofBarclays apparently he and his wife

are both great f lower lovers.Simon Mackenzie-Smith,

investment bankinggrandee at BoAMerrill Lynch, istaking a party, while Alison

Last years gold medal-winning garden from Chelseas lead sponsor M&G Investments

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High-flier: Geoghegan at a Sherpa camp

Carnwath, chairman of LandSecurities, JP Morgan Cazenove chair-man David Mayhew, Standard Life

chairman Gerry Grimstone, andLloyds Banking Group chairman WinBischoff are also attending.

Throw in M&S CEO Marc Bolland, Tescos new chairman Sir RichardBroadbent and David Wormsley, thehead of UK investment banking atCitigroup who is advising onGlencores 60bn IPO alongsideMorgan Stanley and Credit Suisse, and

you have a dynamite combination.

Which could become even moreexplosive if Terra Firma boss GuyHands, Wormsleys former friend

who is still reeling from his hum-bling legal defeat by Citi over EMI,decides to put in an appearance...

LOFTY AMBITIONFROM Chelsea gardens to gardeningleave. Some resting bankers playgolf between jobs, but Citis incom-ing managing director of UK andIreland investment banking Basil

The Capitalist10 CITYA.M. 23 MAY 2011

EDITED BY

HARRIET DENNYSGot A Story? [email protected] The Capitaliston Twitter: @citycapitalist

FOUR Mayfair hedge funders started asthey meant to go on when they met forlunch at the Simon Parker-Bowles-ownedGreens Restaurant and Oyster Bar in StJamess. Crab salad and two-dozen oys-ters were accompanied by a vintage bot-tle of Krug champagne, followed by twobottles of Grand Cru Chablis to comple-ment their Dover Sole and steak tartareand then sticky toffee pudding, Stiltonand a bottle of port. They did, however,make it back to the office in time for closeof the markets rumours that the groupsettled in to the nearest Mayfair pub forthe rest of the afternoon after their1,300 Tuesday lunchtime blow-out areextremely wide of the mark.

BILL OF THE WEEK

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CHANCELLOR George Osbornesdeficit-curtailing efforts will comeinto focus tomorrow with the releaseof the governments net borrowingrequirement for April.

The figures will shed light on thestart of Osbornes first full fiscal yearof major cuts. The deficit could beslashed to 115.6bn by the end of2011-12, the Institute for FiscalStudies has estimated.

The government deficit was

reduced to 141.1bn in the fiscal yearto March, from 156.4bn in Laboursfinal year in power.

The implementation of a largescale fiscal consolidation pro-gramme is not optional, saidNomuras UK economist Philip Rush.

Structural damage to the publicfinances left them on an unsustain-able trajectory. The public sectorgorged on receipts related to thecredit boom that are not coming back, regardless of how long politi-

cians treat the financial sector as agiant piata.

Yet economists remain divided onthe optimum speed of the cuts, andeffect on the UKs recovery.

The plans for fiscal consolidation will inhibit economic growth butthey will have had a l imited effect onthe data released so far, said SimonKirby of the National Institute ofEconomic and Business Research(NIESR).

Removing most of the structuralbudget deficit over the course of thisparliament is essential, but only

when the economy could support it,Kirby told City A.M.

We certainly needed a credibleplan, but there is no evidence the taxincreases and spending cuts had tostart so early.

The deficit is hoped to fall to 7.9per cent of GDP in this fiscal year,from its recent height of 11.1 percent in 2009-10.

Nonetheless, the governmentsnet debt is expected to surpass 70 percent of GDP in 2013-14.

Osborne eyesstrong deficitcuts in 2011-12 GOVERNMENT proposals to reformthe welfare system will fail to makework pay for many parents, a thinktank report will claim today.

Despite the coalitions pledge thatpeople will be better off for each hourthey work under the new universalcredit scheme, parents throughout theUK will face negligible incentives towork, the Resolution Foundation said.

A single parent on the minimum wage would take home just 7.50 aweek more if they decided to work fortwo days a week, instead of one day.

Further increases in childcare costsrisk driving parents especially moth-ers -- on low-to-middle incomes out offull time work, said Gavin Kelly of theResolution Foundation, which co-authored the report with campaign-ing charity Gingerbread. Doing more

than part-time work just wouldntmake you better off, Kelly said.

Parents working fewer than 16hours a week will be subsidised forchildcare costs under the proposals.

But as the overall budget for child-care support within the credit is fixed,other working parents will lose out,the report said.

Iain Duncan Smith, the secretary ofstate for work and pensions, will holdconsultations over the Welfare ReformBill this week.

Coalition reformplans will fail tomake work pay

BY JULIAN HARRIS

UK ECONOMY

WELFARE


ECONOMISTS VIEWS: IS OSBORNES DEFICITREDUCTION PLAN ON TRACK? Interviews by Julian Harris

DAVID MILLER | CHEVIOT ASSET MANAGEMENT

Reining back the deficit had to happen and is being managed reason-ably well. Corporate sector tax receipts may surprise to the upside.

SIMON KIRBY |

NIESR

Unlike the Office for Budget Responsibility, we dont expect Osborne tomeet the primary goal of a cyclically adjusted budget balance in 2015-16.

PHILIP RUSH | NOMURA

We expect Aprils public finances to be in slightly better shape than in2010, with borrowing of 6.7bn excluding financial interventions.

Chancellor George Osborne is reducing the deficit Picture: Micha Theiner/City A.M.

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THE deterioration of householdfinances appears to be slowing, accord-ing to a survey released by Markittoday.

While Britons remain pessimisticabout their finances, the outlook thismonth was the least negative since

January.The household finance index edged

up by half a point (to 36) in May, whilethe index measuring the financial out-look for the coming year rose by 2.6points (also to 36). Nonetheless, figures

below 50 still indicate a decline inrespondents circumstances.

Mays survey showed a small butencouraging rebound in householdsfinancial outlook, following a recordlow during April and declinesthroughout the first quarter of 2011,commented Tim Moore of Markit,

which compiles the data.Workers reported a turnaround injob security, the index improving to42, from 39.4 in April. In the privatesector, the index jumped to 43.7, itshighest since January.

Inflation perceptions slowed thismonth, after hitting an all time recordhigh in April. Yet over four in five (81per cent) still perceived a rise in prices,

while only two per cent reported areduction.

Squeeze of UK householdfinances starts to relax

Rising prices and sluggish wage growth have squeezed households Picture: GETTY

BY JULIAN HARRISUK ECONOMY

Economics 13CITYA.M. 23 MAY 2011

NEWS | IN BRIEF

UKs factory wages edge upwardsWage settlements have begun to creepupwards in the manufacturing sector, asurvey reveals today. Settlements rose byan average of 2.5 per cent in the threemonths to the end of April -- the highest

since January 2009 and up from 2.4 percent in the three months to March.

Business morale starts to repairBusiness confidence has shot up this quar-

ter following four straight quarters ofdecline, according to a survey releasedtoday. The ICAEW and Grant Thornton UKbusiness confidence monitor recordedimprovements in all 14 financial perform-ance indicators.

Cook more to pare income crunchShoppers are looking to beat the squeezeon incomes by cooking more food fromscratch, the IGD shopper track has shown.

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Chinese expansion healthy for City of London

UNLESS witnessed first-hand, it isdifficult to grasp the sheerscale of economic growth inChina or the level of interna-

tional investment that has continuedunabated despite the recent financialcrisis.

As a member of the ShanghaiInternational Advisory Council

whose annual meeting I attended lastweek I have been left in no doubtthat China is determined to create a

financial services industry thatreflects its global standing.On the surface, it may seem count-

er-intuitive that the policy chairmanat the City of London is advising arival financial centre on how toimprove its business offer.

But whilst we are all competing forbusiness, we are not dealing with aneither/or situation firms want tohave a significant presence in Londonand New York and in the Asian mar-kets.

Chinas inevitable growth will help

sustain the expansion of the globalfinancial and professional servicesindustries ultimately creating a big-ger pie for us all.

It is thus in all our interests to help

China develop its financial servicesindustry by fostering closer coopera-tion, we can help to ensure the Citysposition as a leading global financialcentre for years to come.

It is also in all of our interests toensure that major financial centresare underpinned by a commitment toopenness, predictability and stability.

In recent years, Chinese policy-makers have demonstrated a keenunderstanding of the important roleinfrastructure be it transport, tech-nology or office space plays in creat-

ing a world-leading financial centreand a huge amount of money has

been spent in an attempt to attractleading firms to mainland China.

But significant barriers to progress

remain. One of the major concerns isthat until the renminbi has beenfully internationalised, the Chinesefinancial services industry will never

be able to fulfil its potential.Although at present this remains a

huge and complex long-term under-taking, London could have a vital roleto play. With one third of global forextrading taking place in the City agreater share than any other finan-cial centre London is a naturalhome for any such activity and will beat the forefront of any future market

growth.Many international firms still feel

they face huge constraints whendoing business in China, not least

with regards to a lack of consistency

and transparency when it comes to bureaucracy, regulation, licensingand competition. A lack of personalfreedom also makes it difficult torecruit top employees to work inthese markets.

However, there is no doubt thatChina will only become more impor-tant as a place to do business and thisis something to be encouraged. Astrong China will only serve toimprove the industry as a whole.

Stuart Fraser is policy chairman of theCity of London Corporation

RIO TINTO has failed to settleinvestor anger over its pay packagesfor directors, with one top-five share-holder pledging to fight on to over-haul remuneration at the mininggiant.

Around 22 per cent of UK share-holders refused to back Rios remu-neration package at its annualmeeting in April, though the figures

were not made public until afteranother investor meeting in

Australia several weeks later.In Australia, 38 per cent of

investors voted down the directorpay motion.

Standard Life, Rio Tintos fifthlargest shareholder, has called onthe board to bring forward sweepingchanges to the pay structure, afterthe firm merely pledged to examineits policies over the next two years.

We should like to see a full review

of remuneration policies conductedover the coming year, with appropri-ate recommendations being made toshareholders at next years AGM,said Guy Jubb, head of governanceand stewardship at Standard LifeInvestments.

Governance body PIRC said earlierin the month that chief executive

Tom Albanese received a 31.4 percent salary increase from the previ-ous year, while shareholders saw areturn of minus 34.7 per cent.

Rio Tinto pay sparks anger

TENS of thousands of people filledMadrids Puerta del Sol during the

weekend to protest against highunemployment and austerity meas-ures, defying a ban on demonstra-tions on the eve of local elections.

Protesters of all ages including fam-ilies with small children and pension-ers joined hundreds of young

Spaniards, who have been campingout in Madrid for a week, in peacefulprotest against the governments han-dling of the economic crisis.

The number of demonstratorsswelled to around 30,000 people onSaturday night. Protesters also gath-ered in Barcelona, Valencia, Seville,Bilbao and other cities urging peoplenot to vote for either of Spains twomain parties.

Spanish in mass protest at highunemployment and austerity drive

WORLDBYHARRY BANKS

MINING

CITY COMMENT

STUART FRASER

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FLEDGLING bank Virgin Money haskicked off a 2bn fundraising exerciseto stockpile the war chest it requiresto buy the branches being put up forsale by Lloyds and Northern Rock.

Sir Richard Bransons financialservices firm is in talks with potentialinvestors over the provision offinance for a bid.

Both Lloyds and Northern Rockwill be selling batches of branches tobidders over the coming year.

Led by Jayne-Anne Gadhia, VirginMoney has been in talks with privateequity firms in the United States andEurope. It is also said to be in talkswith wealthy individuals over possi-ble investment opportunities.

Investment bank Greenhill has been appointed to oversee theprocess.

Virgin Money has had a long-statedambition to expand in the UK, andhas been linked as a potential bidderfor the branches of Lloyds andNorthern Rock that are to be sold.

American investor Wilbur Ross hasalready given financial backing to

Virgin Money, with a 100m cashinjection and a pledge to invest a fur-ther 500m.

The rest of the cash to fuel thefirms acquisition war chest wouldcome from the fresh round of talkswith potential investors.

Management at Virgin Money aresaid to be keen on securing strongenough tier one capital before mak-ing an approach for the branches.

Established banks have scrambledto improve their financial buffers asregulators clamp down on the stabili-ty of lenders.

As many as 600 branches will besold by Lloyds by the end of this yearfor as much as 3bn, whilst a saledecision on Northern Rocks 70branches could come as early as nextmonth.

A rival bid to Virgin Money couldcome from City grandee LordLevenes NBNK, which is said to haveappointed UBS to advise it on anapproach.

Other bids could come in from USprivate equity house JC Flowers andNational Australia Bank, whichalready owns the Clydesdale andYorkshire banks.

Virgin Money

seeks 2bn tobuy branchesBYRICHARD PARTINGTON

RETAIL BANKING

THE banker leading a rival bid forToronto Stock Exchange owner TMXGroup has claimed the London StockExchange offer does not offer share-holders value.

In an interview with the Times LucBertrand, vice-chairman of Quebec-based National Bank of Canada, said:As a shareholder, I would say its not

a very good premium they are offer-ing.He also denied that his Maple

Group consortium is motivated bythe desire to keep the firm inCanadian hands. He said that if suc-cessful the bid could lead to furtheracquisitions, although he would notconfirm whether the LSE could itselfbe a potential target.

He said: A lot of people have said,arent you closing yourself into the

Canadian space. In fact, we are doingthe opposite. We want to create astronger company and participatefully in the international theatre.

The London Stock Exchange hastabled a C$3.2bn (2bn) all-sharemerger deal. The opposing Maplegroup bid consists of cash and sharesvalued at C$3.6bn.

TMX said it is pressing ahead withits merger with the London StockExchange, rejecting Maples proposals.

Rival bidder for TMX saysLSE bid bad for shareholders

Virgin Money chief Jayne-Anne Gadhia is building a war chest to buy bank branches.


BY STEVE DINNEENFINANCIAL SERVICES

THE internet worlds titans will alightin Paris next week for a two-dayforum hosted by French PresidentNicolas Sarkozy.

While the event is aimed at pro-moting the European digital econo-my, it could also see fierce debate overthe perceived draconian laws in theEU.

The US, with its flourishing inter-net hub in Silicon Valley, is the envyof many entrepreneurs in Europewho feel hampered by a lack of angel

investors, unhelpful regulation inareas like stock options, and a lack of

Sarkozy could be controversialfigure at the e-G8 event in Parislike-minded people.

Sarkozy himself is seen by many inthe industry as a barrier to digitalgrowth. He is well known for his anti-piracy stance and his proposal to levya tax on global internet companies.

He is responsible for passing a lawthat calls for internet access to be cutoff to people caught pirating copy-righted works three times.

However, his tone may be tempered by the powerful role the web hassince played in the tumultuouschanges sweeping the Middle East aregion with which France has a com-plex relationship because of its colo-

nial past.SEE: CNBC COLUMN P19

BY STEVE DINNEEN

TECHNOLOGY

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NEWS | IN BRIEF

Firms set up housebuilder loansSpecialist property financiers PlutoCapital and Mountgrande InvestmentManagement have set up a 50m fundto finance housing projects in Londonand the south-east, the firms said yes-terday. Pluto Finance, the fund manager,expects to provide mezzanine loans overthe next three years in a bid to bridgethe funding gap in residential projectsleft by larger lenders. Pluto partnerChris Philp said the fund aims to attractmore investors and extend its reach indue course.

TNK-BP to pay dividend: report

Russian oil venture, TNK-BP, is set tospend almost all of its 2010 profit in theform of a dividend, business dailyVedomosti said, citing two sources atTNK-BP. The newspaper said the boardof TNK-BP Holding, the traded unit ofTNK-BP, recommended paying 3.85 (8p)rubles per share on fourth-quarter divi-dend, or 59.47bn rubles total. The 2010dividend would account for 97 per centof net profit, according to RussianAccounting Standards.

Pirates break box office recordThe latest Pirates of the Caribbean filmmade $346.4m (213.2m) in its globalbox office debut this weekend, fallingshort of forecasts but still making it thebiggest opening weekend this year.Disney said Pirates of the Caribbean: OnStranger Tides set a record as the high-est international movie opening of alltime, with $256.3m coming from out-

side the US. The record was held byHarry Potter and the Half Blood Prince.M&S chief exec Marc Bolland is expected to set out his expansion plans tomorrow

HIGH STREET stalwart Marks &Spencer is expected to post a 12 percent rise in full-year profit tomorrow,as the retailer outlines plans forgrowth overseas and online.

M&S is likely to post a 710m pre-tax profit, according to consensus esti-mates, which is set to lead to a rise inits dividend to 16.5p, up from 15p last

year.The retailer will unveil how much

the warm April weather boosted sales,following peer Nexts bullish updateearlier this month, and whether therising global price of cotton will leadto price hikes instore.

A year into his role as chief execu-tive, Marc Bolland is also expected toannounce further plans for expansionin his debut full-year results.

He has already poached Laura Wade-Gery from supermarket group

Tesco to head M&Ss internet business,and Jan Heere from Spanish fashion

group Inditex to lead its push over-seas, as he seeks to double sales in

both divisions to about 1bn by 2013-14.Head of non-food, Kate Bostock,

insisted in an interview published yes-terday that the firm is stable at thetop, despite reports that several inter-nal candidates battled it out to replaceSir Stuart Rose as chief executive.

I didnt honestly want to do thatjob. I think that role in M&S is not forme. And I love the job Ive got,Bostock told the Sunday Telegraph.

High-end retailer Burberry, due toreport its own full-year results on

Thursday, is expected to report a 40per cent surge in profit as emergingmarkets continue to snap up thedesigners clothing lines.

Analysts expect the firm to reportan underlying profit of 300m, withall eyes on Burberrys outlook for

Japan, after disruption caused byMarchs earthquake caused shares in

the firm to sink nine per cent in aweek.

M&S set to outlineplans for growthalongside profit riseBYMARION DAKERS

RETAIL

THE DEVELOPERS of the new UBSheadquarters on the Broadgateestate are set to find out as soon asthis week whether the existingoffice blocks will be recommendedfor listed status, stalling progresson the 340m project.

English Heritages advisoryboard will meet on Wednesday todiscuss the groups recommenda-tions, which will inform the gov-ernments decision on whether toprotect 4 and 6 Broadgate.

UBS and site co-owners BritishLand and Blackstone won planningpermission for a new 700,000square foot office block in April,

but this could be superseded if the

department for culture, media andsport decides to protect the 1980sestate.

Buildings normally become eligi-ble for listed status 30 years afterconstruction, but can be protectedif they are under threat or are ofoutstanding quality. The Broadgateestate was first developed in 1985,short of the 30-year benchmark.

British Land called the movestowards listing a terrible signalto businesses at the weekend.

City of London policy chairmanStuart Fraser wrote last month inCity A.M. that it would be a mistaketo list the structures, and that theplans for the new building aptlydemonstrate the adaptability ofthe original Broadgate develop-ment concept and the vision of its

architect, Peter Foggo.But others, including original

Broadgate developer Sir StuartLipton and the Twentieth CenturySociety have called for the entireestate to be protected from demoli-tion.

English Heritage said in a state-ment: We have no desire to fos-silise buildings and we refute anysuggestion that listing does this in planning, there is always a bal-ance to be struck between creatingnew and big and recognising the

value of the existing. The properties at 4 and 6

Broadgate are largely vacant, withagent DTZ assigned to find short-term tenants until demolitionstarts later this year pending theEnglish Heritage report.

UBS awaits fate ofnew headquartersBYMARION DAKERS

PROPERTY

THE FOUNDER of property web-site Rightmove has come out ofretirement, setting up a con-

veyancing firm to try and cash inon the complexities of the UK realestate market.

Harry Hill has launched In-Deed, an online conveyancingservice that lets house-buyerstrack progress of their purchasethrough mobile phones and a

website.Hill, who stepped down as

chairman of estate agentCountrywide in 2009, said yester-day: Feudal methods of propertytransfer still apply unfortunately,and in the last five yearsincreased price competition tosecure a shrinking market hasdriven service standards in con-

veyancing that are unacceptablein many cases.

Hill is joined by co-founderPeter Gordon, a long-terminvestor who has worked at pri-

vate equity group 3i for nearlytwo decades. The In-Deed venture

is privately funded.Philip Williamson, the former

chief executive of Nationwide, hascome on board as a non-executivedirector.

The firm claims that more thanone in four homebuyers find con-

veyancing confusing, while 30 percent view the service as a rip-off.

A survey commissioned by thecompany found that half of allpurchasers have had to chase uptheir property lawyers, wastingan average of 10 hours over thelifespan of the transaction.

Property guru is back in businessPROPERTY

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The Investec Derby Festival is one of the most iconic events of the sportingand social calendars. With an anticipated 100,000 on Investec Derby Dayalone, the Festival is one of the most popular sporting events in Britain. Andfor good reason. The Festival attracts a diverse range of people, creating

Investec Derby Festival 3rd & 4th June 2011Featuring the worlds greatest flat race

Analysis18 CITYA.M. 23 MAY 2011

Why company chairmen face anincreasing level of investor scrutinyInvestors desertedPrudential chairmanHarvey McGrath inits annual vote. AlisonLock discovers whysuch protest matters.

THE 2011 AGM season is already deliveringsome stinging blows for company boards.

Recent meetings at the UKs biggestcompanies have seen shareholder iredirected at remuneration reports and occa-sionally directors. But chairmen have alsotaken flak for their companys directionand performance over the past year.

Prudential shareholders rapped HarveyMcGrath last week for his stewardship ofits failed $35.5bn (21.9bn) bid to buy Asianinsurer AIA last year, with 27 per cent fail-ing to support his re-election.

BP chair Carl-Henric Svanberg alsoreceived a seven per cent protest voteagainst his next term in office.

While the Pru played down the shockresult McGrath said he believed he had apretty good mandate to continue it isthe largest such rejection in a FTSE 100firm this year, and third-biggest revoltagainst a chair in three years (see table).

Why does this matter? For shareholders,particularly long-standing institutionalinvestors, targeting the chairman in a per-sonal attack is taken immensely seriously.

It is a rare occurrence for us to voteagainst a chairman. It is a signal of somedepth of concern about either the compa-ny leadership or the board and it is some-thing we certainly dont do lightly, onefund manager told City A.M.

A big no vote directed at a chairmancan mean several things, though. The AGMis shareholders single annual opportunityto formally protest at decisions madethroughout that year. Opposition toSvanberg, for instance, was viewed as aprotest against BPs Gulf of Mexico spill.

But it can also be a judgement on achairmans future. And while the Pru waskeen to stress opposition to McGrath wasthe former, one shareholder told City A.M.he believed it meant more.

It was more than just a protest vote, it

was questioning the leadership of the board, he said. The vote reflected con-cerns over the leadership of the board inthe context of how an extremely impor-tant decision was handled with sharehold-ers. It would have transformed thecompany in an extremely profound wayand we were concerned about the repre-sentation to shareholders of how regula-tors and other shareholders viewed this.

More than 20 per cent opposition is rarebut often repeats itself. Without a majorityrevolt a chairman is not bound to stepdown so some have shrugged off dissentfor several years.

Reckitt Benckiser chairman AdrianBellamy remains in post despite sizeable

votes against him in 2008, 2009 and 2010at the vast salaries paid to former chiefexecutive Bart Brecht as well as the board.

The most-opposed chairman in recenthistory is former Xstrata chair WillyStrothotte, who faced protest votes from2005 to 2010 due to outrage at executivepay and extras. He stepped down this yearrather than face re-election again.

One institutional investor said this wasnot unusual: You would never see when achairman goes because of shareholder

opposition, he said, adding that a chairwould retire once it became clear investorswould not support his re-election.

The alternative is for company andchairman to use the months after a vote torebuild bridges with investors.

The Pru may feel defensive for a whileyet though, one institutional investor said.In a couple of months they will come out

again and probably take soundings frominvestors to see if anger is still there. Ifthere is, there is a good chance he willstand down, he said.

Investors are clear that less than 95 percent support in an AGM vote should makea chairman review his role. As the institu-tional investor said of McGrath: It meanshe has a mandate but he has work to do.

Clockwise from left:Harvey McGrath ofPrudential; AdrianBellamy of ReckittBenckiser; Sir StuartRose, formerly ofMarks & Spencer;Willy Strothotte, for-merly of Xstrata

Forinstitutionalinvestors,targeting thechairman in apersonalattack istakenimmenselyseriously

MORE THAN 20 PER CENT DISSENT TO THE RE-ELECTION OF FTSE 100 CHAIRMEN

Company Name AGM year Total Dissent % Against % Abstain

Xstrata Willy Strothotte 2010 29% 23% 6%

Xstrata Willy Strothotte 2008 29% 11% 17%

Prudential Harvey McGrath 2011 27% 21% 6%

Reckitt Benckiser Adrian Bellamy 2009 26% 6% 20%

SEGRO (Slough Estates) Nigel Rich 2007 24% 8% 16%


Marks & Spencer Sir Stuart Rose 2009 22% 7% 14%

Marks & Spencer Sir Stuart Rose 2008 22% 5% 17%


Wolseley John Whybrow 2008 21% 2% 19%

Source: Manifest

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an exhilarating carnival atmosphere. This years Investec Derby Festival will be no exception. The twoday Festivalstarts with Investec Ladies Day on Friday 3rd June, followed by Investec Derby Day on Saturday 4th June.Hospitality packages are available. Book ahead and you can be there for the whole show.

Book now: 0844 579 3004 | epsomdowns.co.uk


Sarkozy could learn from Internet billionaires

NICOLAS Sarkozy has invited thegreat and good of the digitalindustry to pop round to Parisfor a few days this week to

chew the fat before the G8 summit.And Im going along for the ride.

You think Sarko would be busy,

what with all those red carpets toshampoo in Deauville and the babystuff he and Carla need to buy, butsuch is the buzz around the sectorhes found the time to host a forum

on how the Internet can accelerateeconomic growth.It is certainly the case that social

networking is coming of age, as wesaw last week. The LinkedIn crewmade a tonne of dough in a stellarIPO. And Lady Gaga knocked Oprahoff the top spot in Forbes MostPowerful Celebs list, proving 10mTwitter followers, in some circles atleast, beats a boring old print andtelly media empire.

And so to the e-G8 A name thatcan only have dreamed up in an i-

moment of desperation.com to getthe @kids on side.

At the Palais des Tuileries thisweek, as Producer Rose and I munchour way through a few dozen pains

au chocolat on expenses, attentionwill surely turn to the biggie in socialnetworking, Facebook.

Social media bazillionaire MarkZuckerberg will be there with hisCOO Sheryl Sandberg, who last weeksaid an IPO for the business is nowinevitable.

The question is, at what price? Andis this another bubble?

Plenty of people think so, citing thedoubling of LinkedIns shares in thefirst day of trade despite the lack ofprofits from the company.

Plus, money is pouring intoInternet start-ups again. Not as muchas a decade ago, but recent data fromThomson Reuters Deals Intelligenceshows more than $5bn (3.1bn) of

venture capital investment flowedinto young web companies globally inthe first four months of the year.

But if youre looking for reasons tobe optimistic about the outlook fortech investors cast your eye a little fur-ther down the attendance list EricSchmidt will represent Google and Jeff Bezos from Amazon is poppingalong too.

And goodness knows, theeconomies of several of the G8 coun-tries need all the help they can get inthe economic growth department.

There is a rather more shadowyside to this event, though. Sarkozy isknown for his espousal of the so-called civilised internet and his crit-ics believe hes the out and out enemy

of the free, open philosophy of thedigital community. They believe hesusing the event to finagle high-profilesupport for his philosophy of morecentral control and censorship of theweb.

In the meantime, Sarko and hisnewly-minted social networkingchums have to figure out how to savethe global economy in time to report back to the G8 on Thursday. Thatshould keep them busy.

Beccy Meehan is a presenter at CNBC.Follow her on Twitter @BeccyMeehan

CNBC COMMENT

BECCY MEEHAN

INDIAN-FOCUSED miner Vedanta islooking to revive its float plans forcopper miner Konkola in the comingmonths, after shelving the IPO inNovember due to market volatility.

Vedanta, which holds a 79.4 percent stake in Konkola, aims to timethe float to cash in on the commodi-ties boom while steering clear of lin-gering market turbulence that hasstalled several IPOs so far this year.

Vedanta said in its recent resultsthat it would examine a listing ofKonkola, a Zambian copper-miningoperation, some time this year.

Vedanta pulled the plug on a floatin November after only two days ofmarketing, but it is understood thatthe Zambian government, whichowns the rest of the firm, remainskeen to tap the London markets.

If successful, Konkola will beZambias first London-listed firm though Vedanta is expected to holdon to a majority stake.

Liberum Capital valued Vedantasstake in Konkola at $5.7bn (3.5bn) atthe time of the previous listingattempt in November. Since then, theprice of copper has yo-yoed fromaround $8,500 a tonne to hit a peak ofover $10,000 in January. Copper for acash buyer closed at $9,006 a tonneon the London Metal Exchange onFriday.

JP Morgan and Goldman Sachshave been advising Vedanta andKonkola on the float.

Vedanta, led by Anil Agarwal, is cur-rently awaiting government approvalfor its purchase of a majority stake inCairn India for up to $9.6bn, havingextended the share purchase deadlineonce more and announced a bondissue to fund the deal on Friday.

Vedanta aimsto resurrectKonkola floatBYMARION DAKERS

MINING

NEWS | IN BRIEF

Daimler rules out EADS saleDaimler has ruled out the sale of aminority stake in aerospace group EADS

to German suppliers and sees a roleinstead for Germany in the deal, the car-makers finance chief told a Germannewspaper. Bodo Uebber, who is alsochairman of EADS, poured cold wateron speculation that a group of supplierssuch as MTU or Diehl could get a 7.5 percent stake for which Daimler seeks abuyer.

Bargain bid for Barnes & NobleCable TV pioneer John Malone likes abargain, and his $17 (10.47) a share bidfor Barnes & Noble is already beingslammed for undervaluing the largestUS bookstore chain. Shares of Barnes &Noble jumped about 30 per cent to closeat $18.33 on Friday as Wall Street ana-lysts argued the company was worthmore, pointing to the growing success ofthe booksellers Nook e-reader as anopportunity to be exploited by Malone'sLiberty Media.

Shell to keep up deep-water drillRoyal Dutch Shell sees deep-water oildrilling continuing in the future and as ofnext year will produce more gas than oil,its chief executive was quoted as sayingyest

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