Briefing for '98: The trader who's cutting a whole new deal

City: Guy Hands: Briefing for '98: personalities to watch include a man who collects businesses for Nomura, and a man who's inherited one at De Beers
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The Independent Online
A Huge pay cheque. An Oxford graduate who combines a working-till- all-hours City career with lots of children. Only 38 years old. No, it's not Nicola "Superwoman" Horlick but Guy Hands, a young banker at Nomura International and father of four.

Bankers are supposed to make their money from giving loans to companies. Not Hands. He takes a, well, more hands-on approach. In his three years at Nomura, Hands has spent pounds 6bn of his employer's money buying real assets you can touch.

Nomura is in the unlikely position of being the nation's largest pub landlord. It may also be the nation's biggest landlord, full stop: the Japanese financial giant bought 57,000 service personnel homes from the Ministry of Defence. Between the Army house and the pub, the squaddie can even stop off and bet on the 3.30 at Wetherby courtesy of Hands. Nomura also owns high-street bookies William Hill.

Surely this is a risky business for anyone, let alone a bank? "Not really," says Hands. "Betting revenues tend to have a remarkably constant relationship to gross domestic product."

As with La Horlick, there is even a whiff of controversy about Hands and his activities. Nomura was one of the companies which famously picked up assets on the cheap by taking advantage of the last government's rush to privatise British Rail. Until just before Christmas Nomura owned Angel Train Contracts, one of three "Roscos" - rolling stock operating companies - that lease out the train sets previously owned by British Rail. Nomura sold Angel three weeks ago for a pounds 330m profit to Royal Bank of Scotland. Hands bought the business for a fraction of that last year. Even by City standards, that represented a lottery win.

Only three weeks before, Hands had sold off an American leasing business, AT&T Capital Corporation, that Nomura had bought 13 months earlier. The profit? Over pounds 400m.

Young Hands is clearly a man to watch. There are plenty of assets left to flog off. Even after selling most of the 1,800 pubs Nomura bought from GrandMet (some to Pizza Express entrepreneur Hugh Osmond), Hands is still landlord of 4,300 more it bought from Inntrepreneur and Spring Inns in September. It is hard to see Nomura sweeping up the betting slips and collecting rents in Aldershot and Catterick for too long.

Hands is a heavy metal music fan, a man who, like Richard Branson, began wheeling and dealing in his student days. After school at Judds, one of the excellent grammar schools that survive in Kent, Hands went to Mansfield College, Oxford where in his spare time he ran Art Sake, a shop specialising in silk screen printing. He kept the shop on, only selling in 1984, by which time he was two years into his first job at Goldman Sachs.

"I adored working for Goldmans," says Hands, who clearly took to the City as much as it took to him. By 1986 he was head of Eurobond trading for the prestigious US investment bank.

But there is more to the PPE graduate than buying low and selling high. Hands often pays more for assets than Nomura's competitors. "Lots of banks looked at buying Angel and thought I was crazy when we paid a lot more than they were prepared to offer," Hands recalls.

The trick was to "securitise" the assets and loans used to buy them. That is Hands' speciality. In the case of Angel Trains, for example, Nomura created bonds whose interest payments are covered by the virtually guaranteed leasing income, and then sold the bonds to investors. The proceeds covered the cost of buying the assets, leaving plenty of scope for pure profit should a new buyer appear. Royal Bank of Scotland duly obliged.

To work out these complex deals, Hands runs what he calls a "cyber room" where 20 brain-boxes - PhDs in maths, computer sciences and engineering - beaver away. "They produce computer models you wouldn't find in a lot of scientific institutions," says Hands proudly. "It's not just the maths that is complex, but the data itself." With Angel, the Hands team analysed the financial and operating performance of every train.

The young banker, a man in a hurry to do deals, says: "There are two things I loathe - administration, and the people management side of business. So I hired a guy 55 years old to take care of it." But he is clearly more human than this makes him sound. He married a local girl he met when he was 18, she 17. The couple have gone far. Mrs Hands (he will not name her, protective of their privacy) went to Cambridge and later worked as a lawyer at top City firm Linklaters, giving up only when expecting their fourth child, now just five months old. Their eldest child is 10.

Hands chafed at the bit at Goldmans, where he found it difficult to persuade the partners to enter the securitisation business on their own account rather than as agents for outside providers of capital. "I spent two years trying to do principal deals but it was seen as quite a risky thing to do."

Hands put together a business plan and looked for a potential employer who had what he wanted - "substantial capital, a worldwide organisation and a willingness to let me run the business on a stand-alone basis." Nomura took the risk, and so far at least has nothing to regret. Hands naturally speaks very highly of his employer, and rejects the usual charge that the Japanese are overly formal and excessively hierarchical.

"Access to senior management is much easier than in a British or American bank," says Hands. "I have no set capital budget, but I can ask for anything if I can justify it."

Hands takes a cab from his Kent home to the City at 5.40am each morning. Even on days at home over the Christmas period he spent some time preparing to bid on what he hopes will be his first continental European asset purchase.

"I'd like to do more business outside the UK," says Hands. "In this country the price of assets has gone up and the understanding of new financing techniques is now much greater than it was three years ago." There is greater competition from City rivals such as NatWest, Daiwa, CSFB, Morgan Stanley, even Goldman Sachs.

Ask Hands what he does with his spare time and money, and he looks blank. He struggles and comes up with: "I work ... I like wine, and that's about it."

Well, not quite. A few days after we met, Hands and his wife went out and bought themselves a huge residence in Sevenoaks, Kent. How much did it cost? "Well, the asking price was pounds 900,000," is all Hands will say.

But the acquisition is a little large even for the sizeable Hands family. The couple have gone into the property investment business and are turning the Edwardian pile into 13 flats. The building, of course, came with planning permission already granted. As in his day job, Hands leaves as little to chance as possible.

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