Keith Mullin, IFR Editor at Large
UKFI is having a good run. The agency tasked primarily with selling the UK government’s stakes in RBS and Lloyds pulled off the sale last night of a chunky 6% stake in Lloyds through an accelerated bookbuild seemingly without a hitch.
In the process, UK taxpayers clawed back a small £61m book profit from the £3.2bn institutional placing and perhaps more importantly, the sale sets the scene nicely for the next stage of the unwinds.
At the same time, UKFI dismissed my inspired but fully tongue-in-cheek advice to appoint ousted RBS chief Stephen Hester to be its new CEO, bagging instead the more suitable services of James Leigh-Pemberton, currently UK CEO of Credit Suisse, as its chief executive; and Oliver Holbourn, BofA Merrill’s UK, Ireland and South Africa ECM head, as its head of capital markets, a new position.
Leigh-Pemberton will take over as executive chairman from January when current incumbent and former UBS man Robin Budenberg steps down after four years’ service. At that point, UKFI will dispense with the CEO role. (Current UKFI CEO Jim O’Neill is returning to BofA Merrill, making way for Leigh-Pemberton).
I’ve known Leigh-Pemberton for around 20 years and I can’t think of (m)any people better qualified for the role. When I ran IFR’s ECM desk back in the early 1990s, I got to know Leigh-Pemberton after he joined the then CS First Boston in 1994 as head of equity syndicate from SG Warburg, where he’d been since the end of the 1970s. You ECM dinosaurs will recall that JL-P replaced Philip Mallinckrodt, who’d jumped ship to his family investment bank J Henry Schroder Wagg & Co to keep an eye on the silver.
A safe pair of hands
JL-P was a thoroughly decent bloke (and even though we haven’t spoken for some time, I’m sure he still is …) – always generous with his time and insights. I learned a lot from him. He’s perfect for the UKFI role. Having spent the past five years as CS’s UK CEO and close to 20 years at Credit Suisse, the timing is good, too. He’s worked on all aspects of the equities business – sales syndicate and origination – and knows the advisory world well following his switch from ECM to investment banking before taking on the UK CEO position in 2008.
He’s done business with clients right across the spectrum, has worked on numerous privatisations and was a key UK government adviser at the time of the part-nationalisations of RBS and Lloyds in 2008. His broad experience should position him well to manage that fractious line between political interference and the government’s rights as a shareholder.
The fact that UK finance minister George Osborne was able to fire RBS chief executive Stephen Hester didn’t do a lot for the UKFI’s raison d’être and it spoke to a poor governance structure. JL-P may have his work cut out to keep the various parties dancing to the same tune, but on the plus side, the dynamics are shifting and there’s a distinct sense that as the Lehman Brothers collapse hits its five-year anniversary, (and leaving aside for a moment the thorny issue of whether RBS will be broken up) we’re entering an end-game of sorts vis-a-vis the UK government’s adventure as a bank shareholder.
With JL-P at the helm, we’re in safe hands.