A week In books

Click to follow

Culture washes cleaner than mere cash, and the prestige of the arts can add lustre to your lucre. So there was something of a backstage beauty contest in the City when the Big Food Group (aka Iceland) decided to melt away from its sponsorship of the Booker Prize. Now we know that the Man Group plc turned up with the most alluring figure: a £2.5m investment in the prize over five years, and £50,000 for each victorious author too.

Arts reporters told this story dutifully, following the PR line that vaguely labelled Man "a leading global provider of alternative investment products". The group's own, rather franker, website describes it as "the international hedge-fund manager and futures broker". In fact, even a brief glance at the ascent of Man reveals an intriguing tale of British capitalism in flux, altering its priorities across oceans and markets for the past 200 years and more. This is just the type of wide-angled, post-colonial narrative that – in the hands of a novelist such as Timothy Mo or Caryl Phillips – traditionally sails on to the Booker shortlist itself.

These days, the job of Man chairman Harvey McGrath is – to quote that bastion of Bolshevism, the Mail on Sunday – "to make the rich even richer". (The paper estimates his personal fortune at £101m.) It's an objective he and CEO Stanley Fink pursue from their bases on Lake Zurich and in the City via lightly regulated hedge-fund investments. These instruments allow wealthy private clients to profit from downward as well as upward movements in share prices. In short, Man can boom while the markets plunge. In the bearish conditions of the past two years, that strategy enabled the group to do spectacularly well. It joined the FTSE 100 index last September as one of the year's starriest stocks, while its total funds hit $10bn.

This year, some of the shine has come off, with a 25 per cent drop in share price and a feeling that Man charges a lot for its undoubted expertise. Restaurateur Luke Johnson wrote that "the reasons for the success of its managers are disturbingly opaque". Many analysts salute Man's formidable record of growth, but a few recall that it was an over-extended hedge fund – the hilariously misnamed Long-Term Capital Management – that almost scuppered the whole financial system of the West in 1998.

This, then, is the thrillingly volatile sector of modern finance that now bankrolls the Booker. But the company name dates back to founder James Man in 1783. Coincidentally (or not?), Man's original enterprise as a broker and trader was the same as that of Booker itself: West Indian sugar. The firm of ED & F Man went on to trade in the classic colonial commodities – cocoa, coffee, spices, molasses. It even supplied the rum ration to the Royal Navy. Man's financial arm floated on the Stock Exchange in 1994. The commodity side split off and found new ownership in 2000: it carries on a separate business that Joseph Conrad would have recognised, and even boasts of a new pepper-preparation plant in Vietnam.

The Booker winner's fattened cheque will come not from pepper but from percentages (or rather, finely ground fractions of them). The Man Group's progress tells an exemplary story of City folk – the move away from shifting and selling the primary produce of poor countries to vastly complex computerised gambles on future events. As the plot for a historical epic, this story has it all. All we need now is for Tom Wolfe to tell it. And Harvey McGrath's loaded reference to the prize's special "resonance" in North America has already led to speculation that the Booker may open its doors to writers from the rebel nation that won independence in 1783 – the very year that James Man shipped his first, sweetly profitable cargo.