Lazard scraps its Lloyd's investment venture

A PROPOSED Lloyd's investment company abandoned its flotation yesterday after the renowned placing power of Cazenove, the most blue-chip of stockbrokers, proved insufficient to raise the desired pounds 60m.

The Nelson Lloyd's Trust, which was sponsored by Lazard Brothers, issued its pathfinder prospectus as recently as last Thursday. It soon became apparent - particularly after the recent stock market falls - that it would be difficult to raise pounds 60m.

Jonathan Kitchen, of Lazard, said Nelson's directors were unwilling to reduce the trust's size below this 'viable minimum'. He added: 'The market appetite for Lloyd's has eroded.'

David Mayhew, of Cazenove, said: 'It is felt there is a surfeit of choice (between the 15 or more Lloyd's investment vehicles). We felt unless we could do it in a meaningful way, there was not much point in doing it at all.'

Until recently, obtaining good underwriting capacity was seen as the main difficulty for the new companies, which will offer the first limited-liability capital to the insurance market. CLM Insurance Fund, backed by Barclays de Zoete Wedd and Sedgwick, had to scale back its plans substantially. Other funds have been abandoned.

David Mayhew, of Cazenove, said recent stock market falls were 'a factor, but. . . I would not shelter behind that'. Placing such a concept company without a track record was very different from Cazenove's normal business and he added: 'I would certainly not want to lever people into something as novel as this.'