Lazard is getting static for yet again landing a lucrative contract from the Government. This time it’s the mandate to sell the £5bn of state-owned land around King’s Cross train station in London.
That takes to at least seven the number of state asset sales Lazard has been awarded since the Coalition Government arrived: it’s already handled the Tote, the blood plasma service, two tranches of Lloyds, the Hinkley nuclear power station contract and then, of course, the Royal Mail. As MPs on the Business Select Committee concluded, Lazard’s advice led to that last crown jewel being sold for £1bn less than it was worth.
To be honest, the advisory fees aren’t generally great for Her Majesty’s Government’s work – a million here, a million there – but it does look good when you’re pitching for more lucrative private business. As The Independent outlined last year, Lazard old boys are liberally sprinkled through senior positions in Whitehall, particularly in the Department for Business, Innovation & Skills, which holds state assets on behalf of the taxpayer. But that’s not entirely the problem.
More of an issue is the perception that there aren’t enough specialist advisory shops without conflicts of interest elsewhere. The perception is wrong. The City isn’t just made up of Citigroups or JP Morgans; other independents do exist, and increasingly so. Just ask the City’s Zaoui brothers, Robey Warshaw or Fenchurch Advisory – partnerships stuffed with deal makers who left the big, conflict-ridden investment banks.
Whitehall must throw its net wider to ensure the best brains are selling our plum assets.