A less bright view from Ludgate Hill: For all his wealth and position, Lord Stevens is looking vulnerable. Clare Dobie explains

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The Independent Online
LORD STEVENS has all the trappings of power. He heads one of the City's largest fund management groups, he controls some of the country's biggest-selling newspapers, and he has a peerage.

How much will he lose when he gives up the chairmanship of Invesco MIM next year? The company announced on Tuesday that Lord Stevens would be stepping down at the annual meeting.

His departure was not unexpected, given the close connection between Invesco MIM, which manages more than pounds 30bn, and Robert Maxwell. Invesco MIM managed pounds 50m of the Maxwell pension funds and the two groups have long-standing associations.

But it also follows dissatisfaction among regulators about the fund management company's approach to compliance. The company was fined pounds 75,000 last year for failing to keep adequate records. It has been under pressure to improve its regulatory performance since then.

Investors were also disturbed at the underperformance at Drayton Consolidated, one of the investment trusts managed by Invesco MIM. These factors gave rise to uneasiness among the non- executive directors.

His departure represents a parting of the ways. Lord Stevens, 56, belongs to the pre-Big Bang, clubby atmosphere of the City, when what mattered was who you knew, rather than what you knew. This style has virtually disappeared in the Square Mile.

Friends credit him with a good intellect. Small and apparently serious, he 'is quick to cut through the guff and get to the point straight away', one associate said.

At first sight, his departure from the City looks like a minor setback. Lord Stevens will remain chairman of United Newspapers, owner of the Daily Express, Sunday Express and Daily Star. They are all strong supporters of the Tory government and give him access to the most powerful people in the country.

A closer look suggests that losing his City power base will be a serious blow for Lord Stevens, who has enjoyed having two constituencies. His choice of title - Stevens of Ludgate - is significant because Ludgate Hill joins Fleet Street to the City of London.

He became chairman of United Newspapers in 1981 from the springboard of Invesco MIM. Connections between the two companies were reinforced by a 4.3 per cent stake held by Invesco MIM in United Newspapers, which has now been reduced to less than 3 per cent. But they go back even further, to Harley Drayton.

Mr Drayton, who died in 1966, built up the business that forms the basis of Invesco MIM today. His style and investment approach hung around long after his demise.

He worked in a market place that was shielded from public gaze. His investment trusts had interlocking shareholdings, common directors and investments.

One of these was United Newspapers. His group acquired its first interest in the company in the 1920s and Mr Drayton became chairman in 1964. Lord Stevens was merely following in his footsteps when he took the top job 17 years later.

Many of his other posts derive from his City power base. The chairmanship of Alexander Proudfoot - colleagues said yesterday they expected he would keep it as he loves the company - is a case in point. Proudfoot was once City and Foreign Holdings, an investment company managed by Invesco MIM.

Lord Stevens' associations with Robert Maxwell date back to 1974, when the two men clubbed together to fend off a bid for Britannia Arrow from Guinness Peat. Britannia Arrow consisted of the remnants of Slater Walker, Jim Slater's defunct share-dealing operation.

Later, the two men came together again when United Newspapers took over Extel, the financial information service. MIM had held a stake in Extel for years and was helped to victory when Maxwell sold his 27 per cent stake.

Without Invesco MIM, which has a strong US business, and without his friend Robert Maxwell, Lord Stevens' future must be in doubt. His contacts are not as useful as they once were.

(Photograph omitted)