Sir David Arculus likes a challenge, so at 67 he has entered the world of wealth …

“We eventually sold IPC at quite a large profit and the bonds had to be bought
out at 110p in the pound so I made a very nice profit on it thanks to Yogi.”

To repay that friendship, Sir David will become chairman of the business and
an investing partner. Sir David agreed to take on the role a year ago, and
has spent the past three months gaining regulatory approval from the
Financial Conduct Authority, which, given he stood down as chairman of
broker Numis Securities just a few weeks ago, was not overly taxing.

Hassium’s bread and butter is discretionary wealth management for a select
group of around 25 high net worth clients, as well as investor consulting
and acting as an expert witness in third-party disputes.

Sir David jokes that although he won’t quite be going through his Rolodex to
bring in clients, “there may be a few introductions coming in. I haven’t
started knocking on doors yet”.

“The most important thing is governance. As you get bigger, you’ve got to have
proper governance,” he says. His role will be to build out the board and the
firm’s advisory panel — current members are largely ex-Goldman associates of
Dewan — and to help Dewan organically grow clients.

“Why would we want to buy anybody else’s clients? We wouldn’t,” says Sir
David. “Frankly if you bought somebody else’s clients they wouldn’t be happy
as they had the relationship with somebody else. The whole concept of the
personal approach is really important in wealth management, as you’re
dealing with families and people who want the wealth to cascade down.”

Sir David is, however, critical of the wider wealth management industry. “It
is an incredibly fragmented industry. Even the big banks will have 5pc
market share or something like that. I think the weakness all the big banks
have had is they ended up pushing their own product at the clients and the
clients naturally got pretty suspicious.

“I think the wealth management business has lost its way at the big firms.
They’re basically selling products to people and have short time horizons.
That’s not a criticism of any particular firm — it’s just the way the
industry is set up at the moment with the banks.”

The advantage Hassium has, he says, is that as it’s not tied to any products,
it can just “cherry pick” from different providers.

Although new to wealth management, Sir David is no stranger to financial
services. As well as Numis, which he chaired for five years, he sat on the
board of Barclays from 1997 to 2006, a role which he says he got by
circumstance rather than experience.

During his time at Emap — where he rose from corporate planner in 1972 to
group managing director until his exit in 1997, in which time it grew to
become a media powerhouse, with more than 500 magazines and a large
exhibitions business – he found out that McLaren Publishing was being sold
by United News and Media.

“But they hadn’t signed the deal with the prospective buyer, and I found out
that the boss of McLaren had gone off on the Great Britain power boat race,”
he says.

When the race was over, Sir David was waiting on the quayside, and offered him
£1m more to buy the business. Emap ended up buying it for £10m – which he
admits was rather more than its market value at the time – despite having no
financing in place at the time the deal was clinched.

“Barclays were absolutely wonderful to me,” he explains, with the branch
manager in Peterborough where Emap was based, referring him to the regional
manager, who agreed to the financing over the course of a weekend. “A little
time after that Barclays were looking for a non-establishment non-executive
director and they just knocked on my door and said, ‘Would you be

“I couldn’t believe it … it was sheer happenstance. I had not had a career in
banking, and here it was, pretty much one of the biggest banks in the world,
wanting me to be on its board. Emap was capitalised at £20m at the time, it
was a pretty tiny company.”

He looks back fondly on his time at Barclays, and acknowledges he was lucky to
stand down, in accordance with corporate governance guidelines, some two
years before the financial crisis hit.

“I do regret so much of what’s happened in the banking industry in the last
few years. I think everything has got more short-term. It got more
short-term from about 2004 onwards, from then everyone was concentrating
more on their bonuses and payback in the next year,” says Sir David. “It
wasn’t just Barclays, it was all the banks that were like that and I think
there had to be an adjustment.”

Despite the resetting of much in the banking world, he still believes more
change is necessary. “I think the guys in the banks still haven’t got it,
the people on the board might, but there’s still enormous pressure for
bigger salaries, bigger bonuses, this kind of stuff. Banking and the whole
financial industry has become a little disconnected from the rest of the
population, I’m sorry to say.”

Sir David has held key boardroom seats in a string of major companies,
presiding over a series of major “bumps in the road” as he calls them, both
good and bad. Although stepping down as chairman of Severn Trent in 2004,
events at the water company came back to haunt him two years later when a
regulatory and Serious Fraud Office investigation led him to stand down as
deputy president of the CBI. But he had success at O2, where the share price
under his chairmanship rose from 40p in 2003 to 201.5p when it was sold to
Spain’s Telefonica three years later in a £17.7bn deal which he notes
proudly is still the largest all cash deal ever completed in Europe.

Following his exit from Numis, his remaining public company role is as a non-executive
director of Pearson, the Anglo-American publisher which is owner of the
Financial Times.

As well as City life, he has also “given back”, as he puts it, sitting on the
boards of the British Library and Cranfield University, and having chaired,
from 2002 until 2006, the Better Regulation Task Force, under Blair. There
he lists his achievements as bringing in the “one in, one out” rule for red

Although this has since been surpassed by Michael Fallon’s “one in, two out”
rule, he says his achievement shouldn’t be underestimated.

“I did get quite a lot of flak as people on the Right of the Conservative
Party said, ‘You must take two, or three, or four out’, but I sowed the
seeds for it, and Tony Blair supported it.” He also penned a report for
Cameron ahead of the 2010 election, but since then has stayed away from any
formal interaction in the political sphere, albeit admitting he has spoken
to Francis Maude, Ed Balls and Danny Alexander each “once or twice” about
issues of business and regulation.

Instead, Sir David says he prefers to spend his time with smaller companies.
He points to ShortList Media – the publisher of free magazines such as
Shortlist and Stylist – which he started with a few friends seven years ago,
and in which DC Thomson took a majority stake last year.

He is also investing his own money into start-ups such as FMFX, which matches
foreign exchange sellers with buyers.

“Having chaired quite a lot of big companies, I would say that I quite like
chairing small companies because you can influence those a little bit more
directly,” he says. “I’m 67 so do I want to take on the chairmanship of a
big bank at 67? I probably don’t. I’d sooner do something smaller that’s
interesting and challenging. I’m a business builder basically.”

Hassium’s Dewan must be hoping some of Sir David’s magic touch might rub off.


Saturday, May 31st, 2014 EN

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