Bankers: the new locusts?
Some private equity players seem to have become so resigned to the “locust” label first given to them by a German politician in 2005 that they now take consolation from the fact that the furor over the recent buyout boom has taught their children what they do for a living.
“At least now my daughter tells people Daddy is a locust as opposed to before when she couldn’t say what I did for a living,” a German based buyout partner said.
When the conference started on Tuesday, a gaggle of protestors were outside the venue in Munich waving traffic signs emblazoned with a locust symbol.
The industry and its investors would seem to agree.
Asked in an electronic poll about the success of the industry’s efforts to improve its image in Europe, 62.9 percent of respondents chose the option “no impact – still locusts.” Another 21 percent decided that it had been “unsuccessful – worse than locusts,” while 15.3 percent plugged for “successful – better than locusts.” Only 0.8 percent deemed the efforts “very successful – no longer insects.”
Yet according to several of the more candid speakers at the event it’s not them, but bankers who are the bad guys.
Adding to harsh criticism of the banking industry from Alchemy Partners’ Jon Moulton, Terra Firma Capital Partners CEO Guy Hands compared some of them to the musical talent spotters he believes to have been over-empowered at EMI, the British music company he is currently trying to overhaul.
“The A&R (Artists and Repertoire) guy gets up very late in the day, he listens to a lot of music, he goes to clubs, he spends his time with artists and he has a knack about what will sell – sounds very similar to structured finance to me,” he told delegates.
He said investment banks would be seen in years to come as a classic case-study of a business making ever-increasing profits year after year even as their very success hid where the profits really came from.
He gave another music industry comparison: “To give you an example that is close to my heart, it reminds me of EMI and all the major record labels in the 1990s believing their success was due to their personal genius and ability to find and market new music, when in fact it was only due to the baby boom generation replacing their vinyl with CDs.”
(Reporting by Eleanor Wason)