There were few more nervous gazes aimed at the financial chaos unfolding in Dubai last week than those cast by London’s private equity industry. And with good reason.
The pipeline of initial public offerings being planned for the first half of next year is dependent above all else on stock market stability.
Gartmore, the fund manager, is the only private equity-backed company so far to announce formal plans for a listing, although the queue is growing.
Merlin Entertainments — in which Dubai International Capital has a significant shareholding — New Look and Pets At Home will all be close behind.
Securing profitable exits from some of these businesses is crucial if the buyout firms are to convince investors to support their next fundraisings.
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The Central Bank of the United Arab Emirates may have stepped in to provide short-term reassurance over liquidity, but events in Dubai are a reminder that next year’s initial public offering boom remains on a knife-edge.
? Sir David Walker’s report on bank governance was judged a whitewash by those who believe that individuals earning more than the Prime Minister should be publicly disclosed. The process to recruit new directors to the boards of Northern Rock’s “good” and “bad” divisions shows, however, that searches to fill boardroom roles in the sector are not getting any easier.
I’m told that the company is having real difficulty finding non-executives, particularly for “AssetCo”, for which it is seeking people with extensive banking experience.
It’s not difficult to see why the search is proving difficult. “BankCo”, the healthy wing of Northern Rock that includes the bank’s deposit base, its branch network and most creditworthy customers, is unlikely to survive as an independent company for very long. Its sale, after all, forms a key plank of government policy to promote competition in retail banking.
AssetCo is superficially no more attractive, given that it will essentially be in run-off mode. Ron Sandler, the bank’s chairman, is expected to chair this bad bank, with a counterpart being sought for BankCo. Gary Hoffman, the chief executive, will run both parts of the divided institution.
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? An intriguing piece of gossip reaches me about the selection for a new chairman of the Court of the Bank of England, which concluded in the spring with the appointment of the industrialist Sir David Lees.
It is common knowledge that two people with a banking background made the original shortlist but that the post was re-advertised at the behest of Alistair Darling, the Chancellor, on the ground that the prevailing attitude towards bankers would make such an appointment politically untenable.
Only one of those final candidates has been identified: Gerry Grimstone, the chairman of Standard Life and a heavyweight adviser to Gordon Brown on the privatisation of state-owned assets.
Now, I understand that the other candidate was none other than Sir Win Bischoff, the new chairman of Lloyds Banking Group.
Whether Sir Win had already been lined up for the Lloyds job at the time of Mr Darling’s decision about the Bank of England shortlist isn’t clear.
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Given that the former Citigroup chairman was also asked by the Chancellor to consider taking on the chairmanship of UK Financial Investments (UKFI) at around the same time, it’s safe to say that Sir Win was receiving some mixed signals from Whitehall during the summer.
? John Kingman’s appointment as a managing director at Rothschild was among the worst-kept secrets in the City during the past few months, but the outgoing UKFI chief is not quite assured of his transition to the milieu of investment banking just yet.
Mr Kingman showed some chutzpah by turning up last Tuesday to a cocktail party thrown by Sir Victor Blank, the man whose departure from Lloyds he orchestrated in May.
Perhaps he was seeking some swotter’s advice, since, before he joins Rothschild, he has an important hurdle to clear: he has to pass exams set by the Financial Services Authority to demonstrate his competency for the role.
? Mark Kleinman is City Editor of Sky News
www.skynews.com/kleinman