by Craig Taylor
To allow bankers to justify themselves. To normalize the language of banking, of usury, greed, of wealth, of ownership, of inviting men and woman who have pillaged elsewhere, who have stolen from the Russian public, or from the Arab world, who have thieved and lied, and moved money from tax haven to tax haven. To create a city for them to burrow into, to dig into the streets, to create caves of wealth down there, swimming pools and private cinemas? That’s London. I love how one road in West London actually collapsed into one of these great empty holes. How could you not look at that photo in the paper and say, that’s London. Wealth collapsed into its own hollow self. I loved it. Let it all come down, I say, all these big empty hollow houses.
You look at it and you think: honestly, it’s a sad city, no pride. Here is this needy city that makes nothing of its own and relies on very questionable people spending their questionable money in questionable ways. And I’m not talking about crime. I’m talking about greed.
Let people speak and they will justify themselves. They should – it’s their lives. They have to find a reason to live them. London always justifies itself in the voices of its people because it has to. It’s not a religious city, it’s not an arts city. So justify: the stakes are high. Too many of the world’s young people show up here. Do these bright, highly educated children learn trades? Do they learn skills? Do they flock to work at climate-change charities? No. They learn numbers. They learn how to skim. They learn how to shift money. Skimming, shifting, shifty skimming. Of course they’re going to make it sound important. That’s what it runs on. And who uses their services? Who do you think? Oh, these people over here? They aren’t crooks who have bled Russia dry. No, no, no. These are ‘international businessmen’. How did they become international businessmen? Because we said, come over to London. Bring your flash, your wife’s spending account, your mistress’s credit card, bring all your troubles, bring your squabbles – remember that Russian who was poisoned? – bring it all here.
You can’t cut the defiance out of London. The police force people to announce their protests now, announce their routes. And that works – it works until it doesn’t. It works until something goes wrong. They kettle students, but someone’s always going to be putting up a banner in this city, some stupid divorced father is going to be putting on the Spider-Man suit or Batman suit and hanging off Buckingham Palace. Someone’s going to throw a johnny full of powder at the Prime Minister’s head during question time. Brilliant. Because there are parts of the City, there are people in London, who look at Beijing with great envy. To be able to call in the tanks, to be able to push people around. That’s the sort of thing that makes them salivate. Oh, the things we could do if we never had to worry about the streets, as if that was not the most important thing about this place – as if London was anything other than a place of defiance, a staging ground. The danger is that it gets turned into a nice day out. Remember Iraq? Come and protest, have a nice day out, chant, go home. What was the result? Nothing. You can get things done in London but it’s not going to happen on a single afternoon in a nice orderly march.
PAUL HAWTIN
Hedge fund manager
Next to the Rolls-Royce showroom sits the cavernous entry hall of Berkeley Square House. Men in suits queue for security passes. There are nine floors of investment companies: capital management, capital management, capital management. Up an escalator, up in a lift, past hushed meeting rooms, I reach Hawtin’s office. It is a single room with barely enough space for his desk and one for his partner – his brother. A small space heater behind them gently blows a Christmas card onto the floor.
Me and my brother, we’re country boys from Derbyshire. Our parents live in a house in a field with sheep and cows and that’s what we’re used to. It’s quite an isolated environment. I was so excited when I got the opportunity to be a trainee stockbroker in London, but it was very intimidating. I came on a Friday, and my job started the next Monday. Just: suit and tie, immaculate, turned up – it was a really smart building – and said, ‘Oh, it’s my first day.’ You soon realize that it’s a very aggressive environment. You’re expecting everything to be laid out for you as the new boy but it wasn’t at all. It was quite a small office, just a rack of desks down the middle with brokers sitting opposite each other; there was probably like eight on one side, eight on the other, the more senior ones at one end and the trainees at the other. The more senior chaps were earning a fortune, and they looked at us like tea boys.
It reminded me very much of boarding school, when you’re one of the new boys in the lower years and the older boys beat you up. You become like a little unit and look after each other. We were given a list of thousands of names, and we’d pick up the phone at nine o’clock in the morning and just call these people non-stop. ‘I’m calling from this company, are you interested in the stock market, do you buy shares?’ These guys had just woken up, they were like, ‘Shares? What are you talking about, I’m about to have my coffee.’ It was hell. We must have been making hundreds of calls a day, most of them just putting the phone down on you. But it doesn’t really effect you, it just becomes a spiel that comes out naturally. And eventually you’ll get one that says, ‘Oh, actually yeah, I am quite interested.’ Then you’re like, ‘Christ, what do I say now?’
We’d probably make about 300 calls a day, and we sent about 10–15 packs out a day. Out of those packs you might get two or three that are remotely interested, and then you might get one out of every fifty packs that actually opens an account. So it’s a real numbers game.
I progressed quite quickly actually, and I was able to become a trader. They wouldn’t tell you what they were selling. They’d just come in one morning and say, ‘Right, this is what we’re selling, this is this company, this is the spiel.’ You’d have a 7.30 meeting and you’d have to sell this at nine o’clock. ‘Right, Paul, you’re going to have fifty grand’s worth of stock to sell,’ and if I sold that, I’d get five grand. And I’m thinking, Jesus, five grand, for a day’s work! This is what all this pain has been about.
They used to have a big white board on the wall with a list of all the brokers and the amount of stock that we’ve each got to shift on that day. Say it’s fifty thousand: you make your calls and if someone buys five grand’s worth, you put, ‘45 grand left’, then, ‘35 grand’, right to the bottom. You’re competing with each other to see who can get rid of their stock fastest, and then when you get to the end they used to just put a smiley face, ‘Done’. I remember a guy called Brian, a brilliant salesman, absolute genius, he used to be done within like two or three hours, and he’d just take the day off. Boss would say, ‘Okay, well done Brian, go home,’ and he’s just made four grand or something. And then you could see the guys that were struggling, you can see their amounts going down in small amounts, taking a long time to get down. If you didn’t shift it, you might be given the next day to try and get rid of it, or they’d take it off you and give it to another broker to sell it. It’s very transparent, how you perform, in front of everybody, and very aggressive.
There was a guy called Phil, who was a real Essex boy, like, gold chain, no brains. He was just so vulgar on the phone. He used to really struggle. But he’d get there in the end, because he was a grinder. He’d just grind and grind and grind and finally get there, but he was always the last one. He’d get off the phone and pant like he was out of breath.
They had this thing where they cut your tie when you put your first trade through. I can’t remember what company this was that I had to sell, but I’d built up this relationship with a guy, very wealthy guy, up in North London, Harrow he lived in, Asian chap, and I could tell he was a high net worth, so fifty grand to him was not a lot of money. He was a busy guy as well, and I remember calling him that morning and I thought, right, I’m going to try and sell the whole lot to this one guy, first call. Let’s see if I can do it, cos it’ll be brilliant. And I called him up, and I did my pitch, and he said, ‘I’m actually just in the car, Paul, I’
m about to go to work. I haven’t really got time to listen to what you’re saying, but I’m happy to give you a go. Let’s just do whatever you’re gonna say.’ I was like, oh my god. I said, ‘Okay, so we’ll buy fifty thousand of da-da-da, this price,’ gave him the risk warning. He was like, ‘Yeah, fine, just do it.’ I put the phone down and tried to keep myself really calm. And I went up to the board, it had fifty grand right at the top by my name, and I put a line straight through it, wrote ‘0’ and a smiley face. And everyone was like, ‘Fucking hell!’
You soon realize it’s very lucrative, but you look at the performance of all these stocks, and they can just go to nothing. Clients can lose 80 per cent of their investment. You then try to pick up the phone and sell them again, and say, ‘I’m sorry about the last one, it didn’t work out but this one’s even better,’ and I just thought, I can’t do this, this is not for me. That’s when I moved on. I don’t care how much they’re paying me, I’m not interested in ripping people off.
When I started this business, I thought, well, I’ll move to Sheffield: very low overheads. It doesn’t matter how small I start, with how small a client base – if I can constantly deliver and look after them, things will grow organically. If someone gives you 10, 15 grand, 20 grand to invest, and in six months time you show them a 10 per cent, 15 per cent return, nice steady return, things are going to start loosening up. They’re going to say, ‘I like this, this is good, I’m going to give you a bit more’; ‘I’m going to introduce you to a friend of mine who I play golf with’; ‘This guy I go shooting with, he’d be interested in this,’ and then it starts to expand. It’s so much cheaper to grow your business like that, because a recommendation hasn’t cost you a thing. Whereas these firms spend a fortune advertising because they are losing all their clients all the time, so they have to constantly keep getting fresh clients in.
But from a business point of view, I just don’t think people take you seriously if you’re in the provinces. If you have a Sheffield address – it’s stupid, but people don’t take it seriously. And it’s a shame, because you can do a great job. For this kind of work, there is just a credibility to having a Berkeley Square, Mayfair address. Curzon Street, which is just down there – probably 70 per cent of the UK’s hedge funds are based there, I’d say. It’s a lot, just on that one strip. The money that’s under management on that street is so powerful. If you combine them all together, you’ve probably got $150 billion there, which is being managed by maybe only forty or fifty people. So it’s an extremely powerful entity. These guys can snap up a football club, they can buy a huge company. The big players in the game, the high net worth individuals, know that that’s where the real expertise is. The way a hedge fund charges fees, it’s called 2 and 20. You take a 2 per cent admin fee, so if you’ve got £100 under management, you take £2 a year, paid monthly. And then you take a 20 per cent performance fee, so whatever you make in profit you take 20 per cent. These hedge funds, some of them have got 10, 15 billion dollars under management. Say they’ve got a billion dollars, what’s 2 per cent of that? That’s $20 million a year. So they’re getting $1.6 million a month guaranteed income, just as an admin fee. That’s a lot of money. And then obviously they get their bonus at the end of the year. And this is split between maybe twelve, twenty guys in some instances. And obviously the bulk of that will go to the top four or five, because a lot of them are just support staff. They’ll go to the Connaught or Claridge’s and they’ll just spend two, three thousand pounds on lunch; not even think twice about it. What’s £4,000 over lunch? It’s like, half an hour’s work. So I thought, if I get an address there, it’s going to help our credibility. Berkeley Square, Mayfair? Oh great, that’s a box ticked in their mind. If you said ‘Ecclesall Road in Sheffield’, not a clue.
So that’s why we’ve got the Berkeley Square address. If you look around here, every room there’s traders and financial firms. Whereas in Sheffield, people were like, ‘You what? You’re – you’re a trader? What do you trade, fruit?’ ‘No no, I trade the stock market, with derivatives.’ ‘Derivatives? What’s a derivative?’ They had no idea. That’s not a bad thing, but it’s just that you’re thinking, how am I going to try and raise a network? A lot of our clients come from all sorts of social events that we do. Networking and talking to people, that’s how we grow our business; in Sheffield it’s very limited.
It’s a relationship business, this. It’s about getting on with people and they’ve got to trust you. And then you’ve got to deliver.
When I first came down here, Dad said, ‘Don’t ever change, don’t let London change you.’ He said, ‘I’m really excited for you and it’s a great opportunity but just don’t let it change the person you are.’ Because London’s like a pressure pot. He said, ‘Don’t get caught up in that style of life, and make sure you realize that life isn’t all about making money.’
I’d like to get to the point where we generate good returns, so we’ve got happy clients, they trust us, that we can deliver; and we build this fund so our £10 million fund becomes £100 million, and then £500 million, and then a billion and so on. And then I’d like to give back, to do a lot of things that I feel the City hasn’t been able to give me, out of my life. I mean at the end of the day, look at us, we sit in front of four screens … What do we actually do for the world, to society? How do we contribute to the world? I don’t think we contribute really. We don’t build anything, we don’t make anything, we’re not helping people … My girlfriend’s a doctor. She helps people every day. I’d like to set up a charitable foundation, and maybe put a percentage of the profits that we make into that.
I’d also like to help small businesses. Entrepreneurship is so important – commerce wouldn’t exist without those who go out and take a risk and set up a business. So I’d like to set up a fund where we help small businesses. Whether it’s students or even younger than students, or older, who’ve got an idea, they can pitch it to us, we can help them. A £5,000 loan without any security, so if it doesn’t work out, we lose it. If we can make money out of that fund, which I doubt, then great; but it’s not really for that purpose, it’s just to help start up businesses. Whereas if you go, traditionally, to a bank, they’re never going to get any money. I’d love to do that. Seeing lots of bright enthusiastic people with great ideas and saying, ‘Yeah, here’s five grand.’ Which is massive to them. I remember when I was trying to start businesses; five grand would be huge. To help them, and see it grow. That would be thrilling.
GEORGE IACOBESCU
Chief Executive Officer, Canary Wharf Group PLC
He is waiting for me in a marketing suite on the thirtieth floor of 1 Canada Square in Canary Wharf. There are models throughout the room: models of Canary Wharf now, models as it will be, models of the proposed Canary Wharf Crossrail station with a park installed on its top. On the walls are photoshopped images of Canary Wharf’s development, peopled by the sort of well-dressed individuals who are rushing around Canary Wharf, thirty floors below. And old photographs of the Isle of Dogs, taken from the air: slack water, dirt piles, the remains of the docks, Canary Wharf in 1987 when it was still a brownsite. Pastries are laid out, coffee and water. An angular man in a crisp suit and striped shirt, he sits with his back to the window so that from one angle the Gherkin seems to rest like a charm on his shoulder. His legal counsel sits across the table, notepad in hand.
Probably from 1700, London was the biggest port in the world. But it was very slow to unload because all the boats were being unloaded at the edge of the water. And there was a lot of piracy, goods were stolen. All the ship-merchants got together and said we need to create a place which is very secure, so in 1802 they opened the London Docklands, which were locked. But by the mid-1960s to mid-Seventies, lots of the things that were produced by the British Empire or in the UK started being produced much cheaper in other parts of the world, so there was less export. And they discovered containers, which meant you could unload the boat in the sea – you cou
ld be in the sea and just take the container and that’s it. In ten years the whole area died. The whole area had about 75,000 people working here, so there was huge despair and everyone was thinking, how do we bring the docks back to life?
I came to London and I couldn’t see the logic of it. I got lost in the north-east area of Canary Wharf, which is mostly populated by Bangladeshi people. I had never been to London in my life, so it was for me a shock, to see more poverty there than anywhere else. In my mind, London was the London you see in the pictures, but you don’t realize that you see a very limited part of London in the pictures. So my personal opinion was not to touch it. And most of the management was not thrilled with the idea. We were very doubtful about the project. Just to show how valuable our opinion was, that was in June; that July the 17th we signed the project.
The government said, we are opening the area for development, but by the way, there is no transport, there are no services, there are no streets. You know, small details. Normally you would expect the government to provide all the infrastructure. If you go and buy a piece of land in the City, you are surrounded by 500 years of infrastructure, by services, by history, by life. You didn’t have all these benefits here, it was just a plain piece of land. There was no electricity, no water, there was no way to get here. Limehouse link did not exist, the DLR existed in that little form from Tower Hill to the tip of the island, but there were no trains running, and that was it. Ultimately it was agreed that we would pay £400 million towards the Jubilee Line, which was unexpected. It wasn’t in the numbers and you wouldn’t probably have started the project if it comes to the point where you have to pay for transport. Just imagine, in Toronto, New York, or Paris, where a developer has to pay for transport?
