Sir Nigel Althaus
Government Broker whose expertise facilitated the smooth deregulation of the UK's financial markets
Saturday 01 September 2007
Nigel Frederick Althaus, stockbroker: born 28 September 1929; Partner, Pember and Boyle (Stockbrokers) 1955-75, Senior Partner 1975-82; Senior Partner, Mullens & Co 1982-86; Senior Broker to the Commissioners for the Reduction of the National Debt (Government Broker) 1982-89; Kt 1989; married 1958 Anne Cardew (three sons, one daughter); died 30 July 2007.
Nigel Althaus's stockbroking career bridged the years of the "Old City", before 1986, and the period that followed, after the "Big Bang" had revolutionised the City and its institutions. Althaus's contribution was a major factor in the smoothness with which the far-reaching changes were effected. He, and the job of Government Broker for which he was best known, epitomised the seemingly illogical nature of the City's traditions and the combination of informality, calm, and shrewdness required to maintain the smooth and unobtrusive running of government finance. Although, unlike his predecessors, Althaus was not trained for the job, he proved a brilliant player at what can only be described as a gentlemanly poker game, as the intermediary between the Bank of England and the stock market.
But it would be unfair to describe him as merely an archetypal City figure. He had an intelligence far superior to that of the majority of his City brethren – as proved by the scholarships he won to Eton and Magdalen College Oxford and by his interest in the technicalities of the government bond market, an interest marked by his editorship of the 1976 edition of British Government Securities in the Twentieth Century, the authoritative work on the subject.
At times, indeed, he could display a certain ironical detachment to the world in which he played a distinguished role. Asked by a journalist what he was doing during a boom in the gilts market in August 1982 he replied, "paddling with my bucket and spade in Cornwall", and later, when asked about the problems of his job as Government Broker he replied: "Things are fine as long as you remember to stand on your head every morning." He read voraciously, but also loved gossip, and was happy to announce that in the latest newspaper birthday list "he was on top of Brigitte Bardot". While at Oxford he was a member of the wine-tasting team, and he retained a prodigious memory for the wines he had drunk; yet later on, after retirement, he rejoiced when he won the competition as the maker of the best marmalade at the village show.
Nigel Althaus was born in 1929. Like many other City families the Althauses were of German descent although, unlike most of the others, they never Anglicised their surname. Three brothers sought refuge in Britain in 1852 after a fourth had been imprisoned following the collapse of the 1848 revolution. Theodor, one of the three, wrote an early life of Thomas Carlyle but his son, called by the same name, became a partner in a leading stockbroking firm, Pember & Boyle.
From its foundation in 1878 Pember's had been one of the handful of firms which specialised in dealing in gilt-edged government stocks, dealing almost exclusively with financial institutions rather than the general investing public (Nigel Althaus once remarked, not entirely jokingly, that "my ignorance of equities is as wide as it is deep"). Although Theodor's son Fred – Nigel's father – was the first chairman of the Stock Exchange's Public Relations Committee, he was a profoundly traditional figure and chairman of a committee which came out against the idea of formal qualifications for membership of the exchange. But he retained enough of the family's intellectual interests to found and edit the scholarly publication British Government Securities in the Twentieth Century, a task in which his son succeeded him.
Of his sons, only Nigel was allowed to join Pember's – by family tradition his brother had to work for another firm. He joined in 1954, after National Service in the Green Jackets. Within a year he had been made a partner and in 1975 followed his father and grandfather in becoming Senior Partner while still in his mid-forties. He was already renowned for his conciliatory temperament and for a quiet persuasiveness which led his clients to believe that they owed him business.
He was also deeply involved in the professional analysis of the many government stocks with their very different redemption dates (some, like War Loans, being without any redemption date, while "short-dated" stock would be redeemed within five years). Switching between different stocks involved considerations such as the country's financial and economic state and the way the market viewed the situation, reinforced, of course, by personal judgment.
Althaus's only appearance in public came with his denunciation of the idea of "indexing" gilts, tying them to the rate of inflation, a proposal launched at the time of hyper-inflation in the 1970s, and one which he denounced as a "South American solution". More traditionally he upheld the firm's reputation for providing superb lunches accompanied by the finest of wines at a time when the idea of a Michelin guide to the dining rooms of City institutions was by no means absurd.
But in 1982 he was appointed Government Broker, and from being an outsider he became the ultimate insider, a true case of poacher turned gamekeeper. For the Government Broker, traditionally attired in a top hat and carrying a tightly rolled umbrella even in the finest weather, was responsible not just for advising the Bank on the state of the gilts market but also for the more formal task of announcing changes in its Minimum Lending Rate to the Stock Exchange and thus to the wider world.
The appointment was a major departure from historical practice. The incumbent, Lord Cromwell, himself newly appointed, had died in a riding accident at the age of 42. Cromwell, like all his predecessors, had held the job in his position as senior partner of Mullens, one of Pember's traditional rivals. Theoretically this was a ridiculous situation since the broker had to keep to himself the state of the market as the Bank of England saw it, as well as the decisions it was making without leaking them to his fellow-brokers. But in this, as in a handful of other cases, this incongruous and very British "Chinese Wall" remained secure over the centuries and of course provided the Bank with an incomparable feel for the state of the market as perceived by an insider.
Because there was no one in Mullens with enough experience to take over, Althaus was appointed, an unprecedented step and a tribute to the esteem in which he was held. Although it was obviously a wrench for him to leave the family firm, he had told his wife early in his career that the one job in the City for which he would love to have been eligible was that of Government Broker, though until his appointment he had always assumed that it was the one to which he could never aspire.
He held the job for four years during the high tide of Thatcherism and as a result, alone in the history of the job, he could fulfil the ambition summarised on the official title of a post established by William Pitt the Younger in 1786, that of "Senior Broker to the Commissioners for the Reduction of the National Debt" and be more involved in the redemption of debt than in new issues.
But his view of his job remained traditional: "It's important", he once said, "to have a good working relationship [with the market-makers] since the system depends heavily on personal contact". The abolition of the 200-year anomaly by which a practising broker also served the Government was one of the many changes in what became known as "Big Bang". As a result, in October 1986, Althaus changed employer and for the three years until his retirement in 1989 became an employee of the Bank of England. Since then the job has been held by one of the Bank's senior officials.
His retirement demonstrated his gentlemanly side, for he ignored the many offers he received for lucrative directorships and returned to his other interests, in golf, cricket and the opera. Previously he had been active in the Skinners' company, of which he became Master in 1977. He had remained a Territorial Army Officer for over a decade after leaving the army and became Honourary Colonel of a regiment associated with the Skinners. Other roles included that of Treasurer of the Imperial Cancer Research Fund.
In 1999 he and his wife moved to Wiltshire where he was content to help with the finances of the village church rather than those of Britain, for he was in essence modest and unambitious.
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