Huguenot exiles who founded swashbuckling City icon

Cazenove's Joint venture with the number two US investment bank, JP Morgan, which could lead to a full takeover of Cazenove in five years' time, marks the end of an era for Britain's oldest independent stockbroker.

The firm was established in 1823 as a partnership and remained one until incorporating as a private company in April 2003, letting in external shareholders for the first time.

Unlike many of its rivals, such as Smith New Court and SG Warburg, which were taken over by foreign predators several years ago, Cazenove managed to hang on to its independence until yesterday.

Cazenove is the leading corporate broker in Britain, acting for 43 blue-chip companies. It also manages funds on behalf of a wide range of clients, including the Queen and England's football captain, David Beckham.

The origins of Cazenove can be traced to the Huguenot financiers who left France for Geneva in the late 17th century after the revocation of the Edict of Nantes, which had defined the rights of the French Protestants, drove them out in 1685.

Among the Huguenots who later left Geneva to seek wealth and freedom in London were members of the Cazenove family.

Philip Cazenove first joined the business of his brother-in-law John Menet in 1819, and in 1823 they became partners. John Menet died in 1835. After teaming up with Joseph Laurence and Charles Pearce, Mr Cazenove branched out on his own, and eventually formed a partnership with his son and nephew in 1854.

The business prospered, managing stock issues and fund-raisings. It acted as broker for an issue by the Metropolitan District Railway Company which helped to build the London Underground. Cazenove was also involved in exotic new issues such as His Highness the Nizam's State Railway Company, as well as the rather more mundane Metropolitan Sewage and Essex Reclamation Company.

By the mid-1930s it had established a reputation as one of London's pre-eminent stockbroking partnerships and was known for its discretion. Its partners generally hailed from the upper tiers of British society and wore bespoke suits. One banker recalled a meeting where a Cazenove partner was asked if he wanted to take off his jacket. The partner replied: "Gentlemen wear coats, not jackets."

In the 1980s Cazenove played an important role in most of the British government's privatisation issues. Even during the turbulent period of "Big Bang" in the mid-1980s, when the stock market was deregulated and brokers and merchant banks were allowed to merge, Cazenove managed to stay independent despite being courted by bigger investment banks, while many other brokerages merged or were taken over.

Throughout the 1980s and 1990s it expanded its business, reaching out abroad. Today, Cazenove has about 1,000 staff - 750 in London, with the rest in New York, Frankfurt, Paris, Hong Kong, Singapore, Beijing and Johannesburg.

The firm changed from a partnership to corporate status in April 2001, raising equity and debt finance from institutional investors including many life companies, who together obtained a 10 per cent slice of the company.

The incorporation formed part of Cazenove's plan to work towards a flotation, which was eventually abandoned in January 2003 when the stock markets slumped.

Increasing competition from the large US investment banks eventually forced Cazenove to consider approaches by various suitors, including Lehman Brothers, Citigroup and Barclays.

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