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Barclays’ debt to Martin Taylor

May 15, 2009

Martin Taylor was a brave choice as chief executive of Barclays following its crisis-before-last in 1994. Unfortunately, nobody would claim the appointment was a runaway success, and when he quit in 1998, the disillusion was mutual.

Yet one decision he made in 1995 has now been brilliantly vindicated. He approved the purchase, for $440 million, of an obscure little fund management business owned by Wells Fargo and Nikko Securities. This business pioneered the idea of the exchange traded fund, whereby investors could effectively buy (or sell) an index, or could inject index constituent shares into it in exchange for units.

This has now grown into Barclays Capital Investors, the world’s biggest fund manager which last year contributed 15 per cent of group profits. A couple of months ago Barclays’ hapless PR, Alistair Smith, was deputed to write to the FT to have a go at its Alphaville site for having the temerity to suggest that this “core” asset might be for sale.

He’s in the firing line again today, with a dead-bat response to the FT’s front page story that the whole of BGI might go, rather than just the iShares half that CVC Capital Partners has agreed to buy. The interest in the whole shooting match is, naturally, “unsolicited” (otherwise CVC might demand rather more than its $175 million break fee if it’s pipped at the post).

If one of these unsolicited bidders does pay $10 billion, it would suggest that Barclays owes rather more to Taylor than subsequent managements have ever admitted.

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  • About Neil

    "City Editor, The Daily Telegraph 1986-2005 City Editor, The Sunday Times, 1984-1986 City Editor, Evening Standard, 1979-1984 Director Templeton Emerging Markets Investment Trust plc, Finsbury Growth and Income Trust plc Passion: fly fishing (and wife Julia and seven-year-old twins)"
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