I am not going to pretend, like some high-flying executives, that my holiday reading list will include any mighty tomes of business and finance – the only financial writer that I can stomach for relaxation and recreation purposes is Michael Lewis, a wonderful author who I have read extensively since picking up Liar’s Poker while working as a tech analyst in the City nearly 15 years ago. Having been reminded of its content by Philip Ryland’s look at the birth of the US junk bond market on page 35 of this week’s issue, I am minded to reread it this week.
The first time I read Liar’s Poker – a semi-autobiographical, semi-historical look at life at aggressive mortgage bond broker Salomon Brothers – I remember thinking how very far away it seemed from the City I worked in just a decade after the events described take place. My broker was hardly salubrious, but the Wall Street of the 1980s came across as the Wild West, a dog-eat-dog world where appalling and brutish behaviour was not just acceptable but desirable and twenty somethings without qualifications made millions. It seemed implausibly awful, but, as I have subsequently discovered, Michael Lewis is not a writer too prone to embellishment.
The 1980s Wall Street was also the era that saw the rise of the activist investor, which is the subject of this week’s cover feature. Such corporate raiders were, of course, immortalised in the film Wall Street and the character Gordon Gekko with his mantra “greed is good”. I suspect that, just as I didn’t recognise the world of US mortgage bond broking, so many working in the Square Mile at the time wouldn’t really have recognised Gordon Gekko, because US-style activism was an import that we never really took to.
Until now that is. It was also Philip Ryland – whose own City career began in the early 80s – who suggested a couple of years ago that US activists might begin to wake up to the wealth of opportunity here in the UK. Scanning the pages of the magazine over the past few weeks, there do now appear to be far more shareholders agitating for corporate action than previously. I reckon we should welcome them: unlike the corporate raiders of yesteryear, the interests of today’s activists are far more aligned to shareholders like you and I – that is shaking the sometimes cozy corporate and fund management worlds out of their slumber to deliver better returns. And now, for me, a week of inactivity...
