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Caroline had always wanted to run her own online business. Now she has three.
To book your place and read Carolines story visit www.cassmba.com The Cass MBA. Inspiring stories. Cass MBA Evening Information Session:
Wednesday 13 February 2013
The Cass MBA.
Inspiring stories.
FTSE firms to
put brakes
on bonuses
BLUE-CHIP companies plan to rein
in bonus payouts for their execu-
tive staff this year, though bosses
can expect to see their pay packets
grow in the long run, according to
research out today.
One in five FTSE 100 firms
expect executive bonuses to fall
by at least 10 per cent this year,
and 17 per cent will impose a
drop of more than a quarter, a
PwC survey suggests.
Around half of the FTSE 100
expect bonus payments to be
equal to last year, while almost
four in 10 are freezing salaries for
executive directors in 2013 as they
bow to regulatory and
shareholder pressure.
And roughly half of the top-
flight firms surveyed plan to
make changes to their executive
pay policies this year, ahead of
new rules on binding shareholder
votes due in 2014.
The calls from shareholders for
pay and bonus restraint appear to
have hit home, said Tom Gosling,
head of PwCs reward practice.
Following a number of years in
which bonuses had crept up to
around 80 per cent of maximum
pay on average; we expect them to
fall back towards target levels of
around 60 per cent of pay this
However, Gosling pointed out
that most companies think pay
levels have now bottomed out,
and many expect to see longer-
term rises to ensure top staff stay
with the firm.
Nearly two thirds of
companies said the scrutiny on
executive pay is making the UK an
unattractive location for
executives, he said.
Todays figures make more grim reading for chancellor George Osborne following the decline in UK GDP at the end of 2012 announced last week
HOUSEHOLD consumption may
take five more years to fight its way
out of the worst consumption
slump since the great depression
and back to its pre-crisis peak,
Deloitte warned this morning.
Consumer spending has improved
only marginally since it fell off a
cliff during the credit crunch, and
this gloomy trend is set to continue,
the accounting giant said.
This came after the most recent
forecasts from the official budget
watchdog, the Office for Budget
Responsibility (OBR), also predicted
it would take until 2017 before
households were consuming as
much as in 2007 a Japan-style lost
decade for consumption.
The consumer faces a long haul,
top Deloitte economist Ian Stewart
said in a note seen by City A.M. It is
likely to take another five years for
consumer spending just to get back
to where it was in 2007.
Deloittes consumer tracker, out
this morning, did little to calm wor-
ries that consumption spending
would be held down for years.
Though the headline sentiment fig-
ure improved from minus 39 per
cent in the fourth quarter of 2011 to
minus 33 per cent in the same peri-
od of 2012, this still suggested con-
sumption budgets were being
pushed in the wrong direction.
And consumers still said they were
cutting back expenditure on going
out, clothing and major consump-
www.cityam.com FREE
tion purchases though at a slower
rate than in 2011.
These downbeat statistics chimed
with Fridays revelation that the
economy had contracted faster than
economists expected.
GDP shrunk 0.3 per cent in the
fourth quarter of last year, the
Office for National Statistics said in
its first output estimate, confound-
ing analysts who mostly thought it
would edge back only around 0.1
per cent, and raising the frighten-
ing threat of a triple-dip recession.
The data was so bad that Citis
Michael Saunders predicted real
GDP per head would not reach its
pre-recession peak until 2020. And
even with continued weakness,
Saunders guessed that consumer
price inflation would stay above tar-
get for an extended period.
Despite all this bad news,
Deloittes Stewart told City A.M.
things were getting a bit better.
The outlook is hardly rosy, but
there are reasons for thinking that
the worst has passed for the UK con-
sumer, he said, pointing out that
the coalitions main tax rises had
already happened, inflation
though still high was on its way
down, and buoyant equity markets
were raising consumer wealth.
FTSE 100 6,284.45 +19.54 DOW 13,895.98 +70.65 NASDAQ 3,149.71 +19.33 /$ 1.58 unc / M1.17 -0.01 /$ 1.35 +0.01
Entrepreneurs, Page 22
Interview, Page 16
MORE: Forum, Page 18


Certified Distribution
from 26/11/12 to 30/12/12 is 127,678
Consumption stuck well below pre-crisis highs
Q32010 Q32007 Q32004 Q32001 Q31998
Real householdexpenditure,
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Follow me on Twitter: @allisterheath
THE SECOND phase of the 33bn
High Speed Two (HS2) railway will
be unveiled by the government this
morning, with communities learn-
ing whether they will be affected by
the twin lines from Birmingham to
Leeds and Manchester.
However plans for a direct link to
Heathrow have been postponed
while the government decides on
the future of airport expansion.
Sources with knowledge of todays
announcement suggest one leg of
HS2 will head north of
Birmingham, passing through
chancellor George Osbornes Tatton
constituency before stopping at
Manchester airport and Manchester
Piccadilly station. There will also be
a short branch line to Crewe and a
connection to the existing West
Coast route, cutting journey times
to cities such as Liverpool.
The other leg is expected to run
north-east from Birmingham to a
new station in the Nottingham sub-
urbs. There will be a further stop on
the outskirts of Sheffield before the
route ends in the centre of Leeds.
Labour peer Lord (Andrew)
Adonis, who commissioned the HS2
project, yesterday told City A.M. why
he believes it must be built: There
is a very strong business case for
HS2. Without a new high-speed line
Hands to move on with fundraiser
Guy Hands, founder of private equity firm
Terra Firma, aims to bolster his plans to
raise funds this year by returning 3bn to
investors through disposals within the
next 12 to 18 months. Mr Hands is pressing
ahead with a 3bn fund to buy green
energy infrastructure assets, people with
knowledge of the matter said.
Banks to test water with new CLOs
Bankers in Europe are testing the water
with new variations of a type of
structured finance product that boomed
until the subprime crisis, as they seek to
take advantage of strong investor
demand for high-yielding assets.
Barclays and Credit Suisse are both
preparing collateralised loan obligations
which bundle corporate loans primarily
for leveraged buyouts into a single vehicle
for investment groups Pramerica and
Cairn Capital, said sources.
BofA shifts derivatives to UK
Bank of America has begun moving more
than $50bn of derivatives business out of
its Dublin-based operation and into its UK
subsidiary, according to sources.
Residency allowed for the wealthy
Debt-stricken European Union member
states are being flooded with inquiries
from wealthy Chinese seeking to
capitalise on increasingly generous
schemes that allow them, in effect, to buy
permanent residency.
De La Rue loses Chinese deal
The banknote printer De La Rue, which
celebrates its 200th anniversary this year,
has been dealt a blow, missing a large
contract for the Chinese government.
Boeing chief under pressure
Boeing chief executive Jim McNerney has
been warned to fix the black eye
inflicted on the companys reputation as
he prepares to face Wall Street for the
first time since the 787 Dreamliner
Mercedes F1 boss to keep rival shares
The new boss of Mercedes Formula One
team has no plans to sell his 15.4 per cent
stake in its listed rival Williams despite
possible concerns of conflict of interest.
Fonterra says New Zealand milk safe
Fonterra Cooperative Group, the worlds
biggest exporter of dairy products,
moved to reassure global customers
Sunday regarding the safety of New
Zealands milk supply.
Truck maker Volvo to enter China
Swedens Volvo is betting nearly $1bn
that the struggling Chinese market for big
trucks will rebound, a move that could
also bolster the name of its Chinese
partner abroad.
PRINTING money to lower interest
rates has blown open pension
fund deficits, making firms pile
money in to plug the gap and
denying the taxman a major
stream of revenue, according to
analysis of new data from the
Pension Protection Fund (PPF).
Quantitative easing (QE) is one
major factor in increasing the
deficits, which the PPF estimates
have increased by 135bn from the
start of QE in 2009 to March 2012.
A Pension Insurance
Corporation analysis of the
numbers suggests this has taken
away money that firms could have
invested in productive activities or
recorded as taxable profits,
potentially leaving the Treasury
37bn worse off.
Pension funds have to fill these
deficits money is coming out of
corporate sponsors of pension
schemes into filling the deficits,
and theres a tax consequence of
that, the Pension Insurance
Corporations Mark Gull told the
Sunday Telegraph.
The firms instead suggest the
Bank of England use QE money to
buy overvalued PFI and
infrastructure assets from banks
then sell them to pension funds at
a lower price, unburdening banks
and giving pension funds a good
long-term asset in one action.
Meadowhall (for Shefeld)
Manchester Airport
Manchester Piccadilly
TotonSidings(for Nottingham)
UK tax takes hit
as QE increases
pension deficits
To contact the newsdesk email news@cityam.com
F we want to identify a problem
correctly, it is vital to get the facts
right. The economy is doing
poorly: the official statistics
suggest it shrank by 0.3 per cent in
the last three months of last year;
even when one excludes the oil and
gas sector, growth was feeble in 2012.
We also know that the chancellors
budget plans are in tatters, with the
deficit going up again.
But there are lots of less well-known
facts that demolish the increasingly
mainstream explanation of our poor
performance over the past few years,
namely that austerity has gone too
far and too fast or that monetary pol-
icy has been insufficiently loose and
we now need quantitative easing (QE)
to be expanded even further, perhaps
to include other kinds of assets.
My first fact is that public spending
as a share of GDP has gone up, not
The state is still growing this isnt the right kind of austerity
down, according to the OECD. Its lat-
est estimate is that it increased from
48.6 per cent of GDP in 2011 to 49 per
cent of GDP in 2012. The state is get-
ting relatively bigger, not smaller, the
very reverse of what was meant to
happen. Of course, parts of the state
are shrinking infrastructure spend-
ing is much lower than it was (and
the government has stupidly failed to
allow the private sector to take on
extra projects to compensate), coun-
cils are closing libraries, and there
has been a much larger than expected
reduction in the public sector work-
force, down by another 128,000
between September 2011 and
September 2012.
But overall government spending,
bolstered by higher interest pay-
ments, an increase in spending on for-
eign aid and the fact that several
departments have seen their spend-
ing protected has grown again rela-
tive to the overall output of the UK
economy and thus relative to the pri-
vate sector. We are seeing the wrong
kind of austerity, focused on higher
taxes rather than a genuine downsiz-
ing of the state, and a government
that has horrendously failed to gain a
grip on current spending.
If you need more convincing, con-
sider my second fact. As everybody
knows, there is meant to be a pay
freeze in the public sector and yet
Money that should have been saved
has not been. This is symptomatic of
the coalitions lack of control.
My third fact is that real wages are
collapsing, depressing consumer
spending inflation on the retail
price index is 2.7 per cent and 3.1 per
cent on the consumer price index.
Private sector workers have on aver-
age seen the purchasing power of
their pay slashed by up to 1.7 per cent
over the past year alone. Again, this is
the wrong kind of austerity.Im all
in favour of changing the Bank of
Englands remit but more inflation
and even more depressed consumers
is the last thing we need.
It is high time for more facts and
less propaganda in the debate on
Britains economic policy.
the average total pay for state employ-
ees increased by 2 per cent over the 12
months to November 2012 in nomi-
nal terms, which astonishingly is
more than the 1.4 per cent in the pri-
vate sector. There are partial mitigat-
ing factors. Perhaps the cuts to the
states payroll are primarily happen-
ing by not recruiting entry-level peo-
ple, who are paid less, reducing the
average wage (but this ought to be
partly compensated for by the retire-
ment of more expensive staff). Lots of
hard-working nurses and others in
the public sector have genuinely seen
no pay hikes, and are struggling.
But on average pay has gone up sub-
stantially in nominal terms in the
public sector since the coalition came
to power. People are being promoted
or moved up career rungs to ensure
they get a raise, bypassing instruc-
tions from the Treasury to freeze pay.
we will end up spending more money
upgrading the existing Victorian rail-
way which is nearly 200 years old and
incapable of adding significant extra
HS2 will halve the journey
between London and Manchester to
1hr 8min.
But the government is braced for
furious attacks from people who fear
their homes and businesses will be
blighted and by economists who
believe the costs are greater than the
benefits and that other projects make
more economic sense. Phase one is
timetabled to open in 2026, with the
second stage following in 2032.
The government is deluded if it
thinks HS2 will regenerate the North.
The regions long-term economic
problems will not be solved by faster
rail links to London, said Dr Richard
Wellings of the IEA think tank.
Towns such as Doncaster already
enjoy fast links, but remain among
the poorest places in the country. HS2
will be used as an excuse to waste bil-
lions more on flawed regeneration
schemes in northern cities, at further
expense to taxpayers.
The new jobs website for London professionals
Ireland looks to change debt deal
nIreland will make changes to its
proposal to ease the statess bank debt
burden, government ministers said
yesterday, adding that failure to reach
a deal with the European Central Bank
could have catastrophic
consequences. The ECB rejected
Irelands preferred solution over how
to reschedule part of its state-owned
bank debt, it was reported at the
weekend, according to EU sources
familiar with the discussions.
Singapore in rate rigging row
nInternal reviews by banks in
Singapore have found evidence that
traders colluded to manipulate rates in
the offshore foreign exchange market,
according to a source with knowledge
of the inquiries. The discovery widens
a global lending rate scandal into new
markets, as fallout from the Libor case
puts banks under added scrutiny and
spurs both regulators and institutions
to reconsider how certain key interest
and currency rates are set.
State of emergency in Egypt
nEgyptian President Mohamed Mursi
declared a month-long state of
emergency last night in Port Said,
Ismailia and Suez along the Suez Canal,
which have been the focus of anti-
government violence that has killed
dozens of people over the past four days.
Seven people were shot dead and
hundreds were injured in Port Said
during the funerals of 33 protesters killed
at the weekend. A total of 49 people
have been killed in demos around the
country since Thursday.
High Speed Two railway
to North unveiled today
UK FIRMS paid out a record 4.9bn in
redundancy payments in the year to
31 March 2012, a nine per cent rise
on the previous 12 months as public
sector job cuts offset a fall in private
sector layoffs.
According to new research by
commercial law firm EMW, since the
beginning of the recession in
September 2008 UK employers have
shelled out a total of 18.4bn in
redundancy payments, with last
years figure up by almost half a
million pounds from the 4.5bn
recorded in 2010-11.
The recent rise in redundancy
payouts has been driven in
particular by increasing numbers of
redundancies in the public
sector,said Louise Holder, principal
at EMW. The strong unionisation of
the public sector also means public
sector redundancy payouts tend to
be higher than those available in
equivalent private sector jobs.
In 2011-12, 410,000 redundancy
payments were made by UK
employers, with an average
settlement of 11,951 or around six
months pay for workers on the
median UK salary of 26,200.
UK firms shell
out record 5bn
on redundancy
ECONOMISTS and campaigners hit
out at the incoming Bank of England
governors plans for the British econo-
my yesterday, arguing that higher
inflation would damage the economy
rather than promote a recovery.
Mark Carney told the World
Economic Forum that the immedi-
ate priority is to ensure economies
reach escape velocity, and that there
should be tolerances around the
inflation target in a downturn.
But he raised fears that the long
squeeze on incomes will continue
under the new governor.
High inflation could make
growth worse by undermining con-
sumer confidence, government
pensions adviser Ros Altmann told
City A.M. Inflation makes those
with money spend less as they worry
about the future, particularly with
City fears over
Carneys plan
for high prices
an ageing population.
RBS economist Ross Walker said he
fears higher inflation will not help.
The objective is to nurture a recov-
ery in real output, he said in a
research note. Simply fuelling infla-
tion would be macroeconomically
destabilising and result in an unjust
redistribution amounting to a breach
of the states existing contract to
limit the erosion in the value of
money to two per cent a year.
Last week outgoing governor Sir
Mervyn King warned that scrapping
the inflation target risks pushing
inflation expectations higher, itself
creating more inflation.
And former policymaker Adam
Posen said extra volatility in inflation
would hurt the economy.
FSA head Lord Turner is set to make
a speech on the future of the inflation
target next month, and it is anticipat-
ed he will favour a change of target.
M&A deals in emerging markets
surge in 2012 following slump
GLOBAL spending on mergers and
acquisitions (M&A) in emerging
high-growth markets rose by five
per cent last year, following a 25
per cent slump in 2011.
However, spending by British
firms more than halved, according
to figures released today.
Research by law firm Freshfields
Bruckhaus Deringer puts global
investment in the worlds 24
fastest-growing economies in 2012
at $162.4bn (102.8bn), as sluggish
growth in domestic markets
encouraged more foreign
BY JAMES TITCOMB investment in countries such as
China, Mexico and Russia.
US firms were the biggest
investors, with acquisition spending
rising 70 per cent to over $22bn.
Belgium was the next biggest
spender at $20.5bn, although this
was almost entirely down to brewer
Anheuser-Busch Inbevs $20bn deal
for Mexicos Modelo. UK firms were
the fifth-highest spenders, with
$10.7bn worth of deals in high-
growth countries.
China came out as the most
popular destination for investment,
with $35bn spent on acquisitions by
foreign companies.
The food and beverage, insurance,
metals and mining, and banking
sectors accounted for almost half of
foreign investments.
After a period where many
investors have been concentrating
on matters closer to home and have
held off investing in higher growth
markets, we are seeing a gradual
return of corporate appetite for
more sizeable investments in these
economies, Freshfields global head
of corporate, Edward Braham said.
2011 proved slow, 2012 was more
active and the early signs for 2013
point to deal flow in higher growth
markets picking up further.
COMPANIES killed off pension
schemes at a record rate last year
as mounting costs led to a slew of
fresh closures, figures out today
A survey by the National
Association of Pension Funds
(NAPF) found that open defined
benefit schemes plunged by a
third in the private sector last
Pension schemes are closing at
the fastest rate ever as costs hit
year, down to just 13 per cent
the fastest closure rate ever.
Closures fell by nearly 10 per
cent between 2010 and 2011.
The pressures on final salary
pensions have proven too great for
many businesses, NAPF boss
Joanne Segars said.
The poll also found just 10p out
of every 1 of pension fund cash
was invested in listed UK
companies last year.
NAPF chief executive Joanne Segars said businesses were under cost pressures
Source: Freshelds
Value of Transactions ($bn)
COFFEE chain Starbucks yesterday
insisted it is absolutely committed
to a massive expansion in the UK,
despite reports its chief executive
raised doubts about the investment
with Downing Street following recent
allegations of tax avoidance.
A Starbucks spokesman confirmed
to City A.M. that last Friday UK manag-
ing director Kris Engskov met with
Number 10 officials and the topics dis-
cussed included negative comments
made by both David Cameron and
Treasury minister Danny Alexander
about the companys tax affairs.
But Starbucks insists the issue will
not delay its plans to open 300 new
stores and create 5,000 new jobs by
We had a very constructive meet-
ing which was long-scheduled, the
spokesman said yesterday.
Last week the Prime Minister used
his speech to the World Economic
Forum at Davos to take a stand
against companies who use aggressive
Starbucks plays
down claims
of tax threats
BY JAMES WATERSON tactics to minimise their tax bills, say-
ing they should wake up and smell
the coffee.
This was widely interpreted as a ref-
erence to Starbucks tax arrange-
ments, which saw it pay just 8.5m in
UK corporation tax since launching in
the country 15 years ago.
Following a public outcry at the end
of last year the company has voluntar-
ily agreed to forgo legal tax deduc-
tions, guaranteeing the Treasury an
additional 20m in revenue over the
next two years.
The company is keen to make it clear
that it is paying the full amount of cor-
poration tax that is due after dropping
the controversial arrangements, as
opposed to simply making a donation
to fend off criticism.
Meanwhile criticism of tax avoid-
ance schemes will continue on
Thursday when the Big Four account-
ancy firms appear in front of the
House of Commons public accounts
committee. MPs are expected to
demand details of which large compa-
nies they advised on tax planning.
Kris Engskovs company claims to contribute 300m a year to the UK economy
Bumi board to unveil radical
shakeup ahead of crunch vote
THE MANAGEMENT of troubled
Indonesian miner Bumi is set to
unveil a drastic overhaul of its
senior leadership today in a bid to
shore up support ahead of a key
shareholder vote on the future of
the business next month.
Bumi, led by chief executive Nick
von Schirnding, will propose
downsizing the current board from
14 members to eight and ditching
the Bumi name to distance the
firm from the wranglings of the
past, a person familiar with the
matter said.
The new listed entity, which has a
working title Asia Coal PLC, will still
control 85 per cent of Berau Coal,
the operational arm of the venture.
A new chief executive will be
appointed at Berau. Von Schirnding
will also unveil plans to ramp up
production of coal from 22m tonnes
a year to 30m tonnes, as part of the
organisations development.
Bumi shareholders are set to vote
on rival plans put forward by major
shareholder Nat Rothschild, who
wants to replace 12 of the 14 current
members of the board, when the
owners of the company meet at an
emergency meeting, scheduled for
21 February.
Rothschilds vehicle NRI said on
Saturday it had reported two hedge
fund investors in Bumi, Route One
and Orchard Capital, to the UKs
Takeover Panel for allegedly
breaching concert party rules.
Both Orchard Capital and Route
One are invested in or affiliated
with companies that have exposure
to the Bakries margin loans, the
NRI statement said.
Neither firm could be reached for
comment yesterday.
OVER TWO thirds of directors and
senior managers at UK firms said
the government should slash VAT
in 2013, according to a survey out
this morning.
Sixty-seven per cent of senior
managers surveyed by Interim
Partners called on the government
to cut VAT back down to size in the
coming year, up on last years
slimmer majority of 56 per cent
who backed slashing the
consumption tax.
Managers also called for a steady
monetary policy, Interim Partners
said, with a large majority 88 per
cent opposing increased interest
rates and more than half 57 per
More and more firms want VAT
cut to help businesses recover
cent coming out against more
quantitative easing (QE).
Both majorities had increased
since managers were asked the
same questions last year, as the UK
has continued to find itself unable
to fight its way out of the clutches
of economic slump.
The support for continued low
interest rates has increased as the
economy has continued to
struggle, said Interim Partners
managing director Doug Baird.
However, there appears to be
growing concern about the impact
of QE many senior managers do
not see QE as a long-term solution
to the UK economys problems. He
said they thought QE had come up
against diminishing returns.
THE number of new corporate
manslaughter cases opened by the
Crown Prosecution Service (CPS) rose
40 per cent from 2011 to last year as
more companies face accusations
over work-related deaths.
Law firm Pinsent Masons, which
compiled the figures, said there were
63 cases opened last year, compared
to 45 in 2011.
Records only date from 2009 two
years after the introduction of the
Corporate Manslaughter and
Corporate Homicide Act, which allows
the convictions of companies for
deaths from management failures
which constitute a gross breach of a
duty of care.
There have only been three convic-
tions since the law was put in place,
but Pinsent Masons said this figure is
the tip of the iceberg as cases take so
long to prepare and take through
Specialist health and safety lawyer
Simon Joyston-Bechal said: High-risk
industries and companies cannot be
reassured by the current lack of con-
victions for corporate manslaughter.
He added that companies should
think twice about excessive cost-cut-
ting that could affect employees
health and safety.
Companies that do this could find
their cost-cutting decisions leave them
liable for prosecution if there is an
More firms in
the dock over
deaths at work
EASYJET chairman Sir Mike Rake
plans to step down from the board
this summer, after three years of
locking horns with the budget air-
lines founder and biggest share-
Sir Mike faced down calls for his
resignation last year from Sir Stelios
Haji-Ioannou, whose family holds a
37 per cent stake in EasyJet. Sir
Stelios dubbed the chairman Mr
Conflict of Interest over his non-
executive roles at Barclays and BT.
Sir Mike said the timing was right
for his resignation, as EasyJet stands
on the threshold of entry to the
FTSE 100.
Sir Mike is the chairman of BT,
another FTSE 100 component,
meaning he would fall foul of corpo-
rate governance guidelines if
EasyJet was promoted to the blue
chip index during the next reshuf-
fle in March.
Sir Mike will still stand for re-elec-
tion at the firms annual meeting
on 21 February to ensure a smooth
handover to his as-yet-unnamed suc-
cessor by the summer.
EasyJet chair to
quit after three
turbulent years
Charles Gurassa, deputy chairman
since September 2011, has been
named as a contender to take over
the chairmanship.
Sir Mike was often the target of Sir
Stelios ire over EasyJets plans to
replace some of its fleet.
It is thought that Sir Stelios was
ready to voice fresh criticism of the
chairman as the shareholder meet-
ing drew near.
In advance of the forthcoming
AGM I wanted to make my position
clear, said Sir Mike in a statement
over the weekend.
EasyJet has by any definition
enjoyed a period of success and prof-
itable growth in the last three years.
Airlines ambitions to join the
FTSE 100 sped Rakes departure
T first sight, the departure of
Sir Michael Rake as EasyJet
chairman is a victory for Sir
Stelios Haji-Ioannou, the
companys founder turned thorn-in-
its-side. Sir Stelios sought Sir
Michaels removal last summer,
following the BT chairmans
appointment to deputy chairman at
Barclays, arguing overcommitment.
However, despite public criticism
by EasyJets largest shareholder, Sir
Michael held onto his role when
shareholders voted 53.3 per cent in
his favour in August.
Perhaps Rake has had enough. But
if so, it is only after surviving three
years of infighting. More likely, even
the multi-tasking knight, who is also
a director at McGraw-Hill, may have
seen that his EasyJet chairmanship
would be impractical to retain if
EasyJet entered the FTSE 100.
The rule that used to explicitly
forbid holding two FTSE 100
chairmanships was changed in 2010.
However, the rule does still provide
that individuals must have the
necessary time and resources before
taking on multiple blue chip
chairmanships. There are only so
many hours, even in Mike Rakes day.
Sir Michael Rake is also chairman of BT and deputy chairman of Barclays
EasyJet plc
25Jan 21 Jan 22Jan 23Jan 24Jan
950 p
US private equity giant Blackstone is
set to reap a multi-million pound
windfall after pushing forward plans
to sell its stake in the Broadgate
estate, home to some 30,000 City
workers in London.
The New York based business, the
biggest real estate manager in the
world, is in line for an eightfold
increase on its investment in
Broadgate if it sells its equity stake at a
price in line with the areas current
valuation of 3.1bn. A deal at this
value would make Blackstones stake
worth around 600m, delivering a
stellar return for the firm, which
bought the stake from British Land
for a snip at 77m in 2009 at the
height of the financial crisis.
The future of the estate and
Blackstones plans is likely to crop up
when British Land reports its third
quarter management statement
tomorrow. The estate is home to some
of finances biggest names including
UBS, Deutsche Bank, Icap and a host
Blackstone set
to cash in on
Broadgate sale
of money managers, and around
30,000 employees work out of 16 build-
ings throughout the district.
City A.M. ran a campaign backing suc-
cessful plans to stop part of the area
being listed by English Heritage in
2011, in order to promote develop-
As part of the deal, Blackstone
through its Real Estate Partners
Europe III and Real Estate Partners VI
funds took on 987m of third party
debt but it is still not clear who would
take on the debt when the group cash-
es in its equity stake. Blackstone
declined to comment.
A sale would be the latest in a string
of crisis-era London property coups for
Blackstone. It is currently mulling
plans to sell its investment in Chiswick
Park. With a price tag of 800m, a sale
would be at around a 65 per cent pre-
mium on the 480m Blackstone paid
for it. Blackstone is also understood to
have snapped up the campus at
Devonshire Square for 340m back in
May, continuing its deal making pres-
ence in Londons financial district.
GORDON RAMSAY has turned his
restaurant empire around after a
turbulent few years, including a
costly feud with his father-in-law,
to report a return to profitability.
Kavalake which includes
restaurants such as the Savoy Grill
and Gordon Ramsay at
Claridges delivered pre-tax
profits of 2m in the year to
August 2012 after suffering a
4.4m loss in 2011.
Ramsay, who runs the business
with managing director Stuart
Gillies, said this weekend he
was proud of the group
delivering its best year to date.
We have negotiated a
difficult path over recent years
and Im delighted all our hard
work has paid off in what is
still a challenging
climate, he said.
Total sales fell six
per cent to 43.1m in
the period but UK
turnover increased 13
per cent thanks to
new openings such
as Bread Street
Kitchen in the City.
The group has pressed
ahead with expansion plans,
particularly in the US where
it has launched three
restaurants in Las Vegas and
one in Los Angeles. It also
opened two sites in
Doha and plans to
open more sites in the
UK and abroad this
The Broadgate complex houses tens of thousands of City workers close to Liverpool St
Gordon Ramsays
restaurants include
Petrus and Maze grill
GERMAN Chancellor Angela
Merkels centre-right coalition will
today decide on changes to a draft
law to clamp down on ultra-fast
trading on stock exchanges, which
it sees as stoking excessive market
High-frequency traders use
computer algorithms to generate
numerous, lightning-speed
automatic trades that make money
from tiny price differences in the
market. These trades hold
investments for short periods only
and have been blamed for causing
market volatility, such as the so-
called flash crash in the US in May
2010, when the stock market fell
more than 1,000 points, or nearly
German government to agree
a law on high-speed trading
BY CITY A.M. REPORTER 10 per cent, within minutes.
Keen to avoid similar crashes on
German exchanges, Merkels
government wants to implement
regulation requiring traders to
register with stock exchange
regulators and disclose their
algorithms. It also wants to limit
the number of decimal points given
in market prices and to prevent
traders from requesting pricing
information without intending to
trade. Other practices like scalping,
which involves using misleading
market signals to influence prices,
will be classed as misuse.
Once the coalition has agreed on
amendments to the draft law with
the Bundestags finance
committee, it will need to be
approved by the parliament.
Gordon Ramsay back on form
as his empire returns to profit
up 26% on the third quarter 86
Equal to 15% of quoted companies
warnings during 2012
26 companies cited delayed or cancelled contracts, a new record
Profit warnings rise to highest
rate since during credit crunch
LISTED UK firms issued more profit
warnings in 2012 than at any point
since the height of the financial
crisis, according to data out
Firms listed on the main and
junior markets issued 86 profit
warnings between them in the
final three months of the year,
Ernst & Young said, up 26 per cent
compared to the third quarter.
This brought the 2012 total to
287 the highest figure since 2008
saw the world economy hit by the
worst crunch for decades.
In total, some 15 per cent of UK
firms quoted on one of the main or
alternative exchanges issued profit
warnings last year, again the
highest since 2008, when 18 per
cent of firms were forced to issue
Profit expectations dropped
sharply in 2012 as economic
forecasts fell and escalating risks in
key global economies unnerved
businesses, leading to delayed
investment and purchasing
decisions, explained Ernst &
Youngs Keith McGregor.
The UK economy lacked the
strength to gather momentum
against this difficult global
backdrop and finished 2012 with
nothing more than a low growth
landscape on the horizon.
Business services firms issued the
most warnings FTSE support
services companies issued 46
warnings between them over the
year, while FTSE software &
computer services issued 24. But
industry was also hit close to two-
fifths of FTSE-listed industrial
transport firms had to issue a
warning in 2012.
THE FINANCE watchdog will this
week lay out the process for firms to
apply for compensation if they think
they were mis-sold interest rate swap
products, opening the door for poten-
tially billions of pounds of claims.
Small firms argue they have lost
out, sometimes to the tune of mil-
lions of pounds, by splitting a fixed
rate loan into a variable rate loan and
a swap product to fix the rate.
That meant they missed out on the
chance to save interest payments
when rates fell and they blame the
banks for selling them swap products
which turned out to be expensive.
The Financial Services Authority
(FSA) is designing a redress process to
avoid lengthy court battles.
It may try to differentiate between
sophisticated firms who have only
themselves to blame and unsophisti-
cated small firms who were misled by
the banks who were supposed to be
But business lobby groups fear that
a crude guide based on business size
is a poor way to estimate sophistica-
tion and will leave business owners
with little financial knowledge out of
pocket. It is thought the FSA could
draw the boundary based on head-
count or the capital stock of a firm.
We have always looked at this
debate with a degree of scepticism
and think it should be revised,
Graeme Fisher from the Federation of
Small Businesses told City A.M. This
could class ordinary farmers as
sophisticated just because they have a
lot of seasonal labour and a lot of cap-
ital value in terms of land.
Instead he favours looking at the
way a loan and swap are structured to
determine whether misselling took
place for example, covering any
swap for a period longer than the
underlying loan.
Meanwhile reports suggest the chief
executives of the UKs biggest banks
have met over their joint concern that
the new Financial Conduct
Authoritys (FCA) is taking an overly
aggressive approach to the mis-selling
of interest rate-hedging. Sky News said
last night the bank bosses were con-
cerned that FCA chief Martin
Wheatley was pursuing a compensa-
tion scheme over misselling that
could cost them a total of up to 10bn.
ITALIAN bank Monte dei Paschi di
Siena is seeking a financial investor
to help revive the ailing lender and
will remove a current cap on voting
rights to help raise 1bn (822.5m),
its chairman has said.
I would like to have a long-term
financial investor, Alessandro
Profumo told Italian business daily
Il Sole 24 Ore in an interview
published yesterday.
Nationality is not a problem.
The important thing is that it
believes in our project.
Late on Saturday the Bank of
Italy gave its approval to Monte
Italys Monte dei Paschi seeks
new investor to revive lender
BY CITY A.M. REPORTER Paschis request for 3.9bn of state
loans, which Profumo said would
be issued by February. The central
banks backing was the final stage
required to free up the financial
help for Italys third-biggest lender,
which this week revealed loss-
making derivatives trades that
could cost it about 720m.
Profumo said he was confident
the bank would generate enough
cash to pay back the state bailout
over the next five years and may
not need to turn to investors to
raise the 6.5bn. We believe in
this. The objective is to return to
profits already during the course of
this year, he said.
Alessandro Profumo said the banks state aid funds would be issued by next month
Barclays is expected to launch a
new bond in the coming months in
response to the Bank of Englands
demands that the UKs biggest
banks shore up their finances.
The Bank believes the
institutions are underestimating
the amount of capital they need by
tens of billions of pounds.
Barclays issued a contingent
convertible (coco) bond late last
year that was lapped up by
enthusiastic investors, putting it on
a strong footing for more issuance.
The bank declined to comment.
Barclays mulls
bond issuance
FIVE foreign banks are now allowed
to trade Chinas stock index futures,
it emerged over the weekend, as the
country takes another step in
opening up to international
The Qualified Foreign
Institutional Investors programme
is being run by the China Financial
Future Exchange and allows
foreigners to trade shares and
bonds in the country.
Morgan Stanley, UBS and BNP
Paribas are among the five, the Wall
Street Journal reported.
China open to
more trading
Banks brace for
new wave of
swaps claims
Call 0300 200 1999
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When the Sage of Omaha Warren
Buffett has a wager with a friend
he doesnt do things by half. A $1m 10-
year bet struck with a New
York hedge of hedge
funds in 2008 seems to
finally be paying off.
Buffet bet the S&P
500 would outperform
hedge of hedge funds
over a 10 year stretch.
Buffett took
the lead on
Friday for the
first time:
Omaha 1 Wall
Street 0.
The Capitalist spent the weekend
juggling the two greatest pleasures
this world has to offer: watching
high quality tennis and reading the
latest report from the Office of
Budget Responsibility (OBR).
So while most of the world was
wowed by Novak Djokovics
performance in the Australian Open
final, we had other things on our
mind. Namely, the uncanny
resemblance between sports most
famous Serb and Robert Chote, the
close-cropped boss of the OBR.
Unfortunately for Chote, the UKs
economic umpires last week said the
economy shrank in the fourth
quarter leaving the OBRs growth
forecast looking optimistic. Time for
a Plan B? Or at least new balls?
Left: Robert Chote, head of the UK budget watchdog. Right: tennis ace Novak Djokovic
Budget watchdog chief cannot
match doppelgngers accuracy
Got A Story? Email
IT is more subtle than Ben
Bernankes and, according to
Christine Harper of
Bloomberg, less dark
than its owner would
like. But Lloyd
Blankfeins beard
managed to catch
everyones attention
in Davos, even against
the wintry backdrop.
Blankfein told
CNBC he was extending his holiday
look, a laidback sentiment for the
head of an investment bank. We
like to think Blankfein could also
be tipping his hat to some early
City bankers: the Lombards, or
Lango Bardi, named for their long
beards. If so, Blankfein wont be
reaching for his razor just yet.
Blankfeins beard has already
had its first TV interview
Blankfeins snowy beard is a
standout success at Davos
BOARD members of online bookie
Sportingbet are set to cash in almost
10m between them when the
company completes its 485m sale to
William Hill and GVC Holdings.
The seven board members are due
to receive exit payments, bonuses
and share options valued at around
9.6m when the deal completes in
Chief executive Andy McIver will
receive a 2m payout when he
leaves after six-and-a-half years at
Sportingbet equivalent to two
years salary and benefits. He also
owns stock worth 1.7m and is
sitting on share options worth
another 1.7m.
Finance director Jim Wilkinson
has a similarly structured package
of a 1.2m payout and a
combination of shares and options
worth 1.7m.
The other five board members
non-executive directors including
chairman Peter Dicks will have
the remainder of their contracts
paid off. Dicks, who owns nearly
400,000 in shares, will receive a
60,000 bonus as well as an 80,000
payoff. One director, Marie Stevens,
will get 187,500 having signed a
three-year contract when she joined
just four months ago.
Shareholder advocacy group Pirc
has criticised Sportingbets
remuneration plan, claiming it is
not based on performance.
board set for
10m payday
LISTED private equity firm 3i has
entered the fray to snap up a minori-
ty stake in the UKs air traffic control
agency amid an ownership shake up
at the air controller, it emerged yes-
3i, led by chief executive Simon
Borrows, is understood to have regis-
tered its interest in bidding for a 12
per cent stake in National Air Traffic
Services (Nats), which has been put
up for sale by Thomas Cook Airlines
and Tui Travel.
The FTSE 250-listed firm, which
makes investments through its listed
3i Infrastructure fund, is in the
midst of a restructure as manage-
ment seeks to make infrastruc-
ture and debt management a
larger part of the business.
3i, which has seen its share
price rally close to 20 per
cent since December,
declined to comment yester-
If 3i does bid, it
is likely to face a
flurry of rival
offers for the
Sale of UK air
traffic attracts
interest from 3i
stake, which is valued at around
Serco, Lockheed Martin and Global
Infrastructure Partners, which owns
Gatwick, have all been tipped in the
past as potential investors.
The Treasury, which owns a 49 per
cent stake in Nats on behalf of the
Crown, reversed a plan to sell its stake
last year citing security concerns.
Another 42 per cent chunk is owned
by a seven strong consortium of air-
lines called The Airline Group
which includes Thomas Cook Airlines
and Tui Travel as well as British
Airways and Virgin Atlantic.
The last set of accounts filed for The
Airline Group show its 42 per cent
stake valued at 227m.
The combined Thomas Cook and
Tui stake would be worth around
64.8m on that basis.
3is infrastructure division was
uprated to a buy rating by Oriel
Securities last week, with RBC
Capital also putting a sector per-
formance rating on the stock late
last year.
SUTTON & East Surrey Water
(SESW) has become the latest bit of
British infrastructure to attract
bid interest from China.
Beijing Water Authority, one of
the worlds biggest water
companies, has hired HSBC to help
it prepare a bid for the utility,
according to the Sunday Times.
Current owner Icon
Infrastructure expects to take final
offers for SESW this week, having
put the firm up for auction last
If successful, Beijing Water
Authority would join a growing list
Beijing bidder eyes up Sutton
& East Surrey Water auction
BY MARION DAKERS of Chinese investors swooping on
British infrastructure.
Chinas state-controlled CNOOC
spent 9.7bn on North Sea oil
producer Nexen last summer, and
a year ago China Investment
Corporation took a stake in
Thames Water.
Chancellor George Osborne, who
is courting overseas investors to
plough money into projects in his
national infrastructure plan,
hailed the latter deal as good
news for both the British and
Chinese economies.
HSBC declined to comment,
while BWA, Icon and SESW could
not be reached.
Water companies including Sutton & East Surrey are popular with Chinese funds
Original Thinking Applied
The government has just
imposed a 15% tax on your
product. Your customers have
signed a petition, but theyve
stopped buying. Think you
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3i boss Simon Borrows
was appointed in May
THE long-awaited next generation of
BlackBerry smartphones will be
unveiled this week, in a make or
break moment for manufacturer
Research in Motion (RIM).
The Canadian company will unveil
two new devices running BlackBerry
10, the first major overhaul to its
software in years. The much-needed
upgrade has been beset by technical
delays while RIM has dramatically
lost market share to Apples iPhone
and smartphones running Googles
Android software.
At a launch event in New York,
chief executive Thorsten Heins will
emphasise the multitasking and reli-
ability of the new devices. One will
be a touchscreen phone, similar in
size to the iPhone, while the other
will have a physical keyboard.
The company believes that much of
its software, such as its email func-
tionality and BlackBerry Messenger
chat service, will still be in demand.
The handsets and new operating
RIM hoping that
new BlackBerry
will bear fruit
BY JAMES TITCOMB system will be heavily marketed,
including with a 30-second advert at
the Super Bowl next Sunday evening,
estimated to cost around $3.7m
(2.3m) for the slot alone.
Despite BlackBerrys declining mar-
ket share and RIMs mounting losses,
investor confidence in the company
has improved in recent months. Its
market capitalisation has trebled
since Septembers lows and now
stands at $9.2bn, while Chinese com-
puter giant Lenovo last week identi-
fied the company as a potential
acquisition target.
Research in Motion boss Thorsten Heins will unveil new smartphones on Wednesday
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Diageo offer for United Spirits
hits rocks amid Indian concerns
DIAGEOS takeover of Indian drinks
company United Spirits is set to be
pushed back this week, with
regulators in the country yet to
approve the next stage of the deal.
The owner of Johnnie Walker
and Smirnoff agreed to buy a 27.4
per cent stake in United Spirits
from its founders in November.
With that completed, it was set
to launch a mandatory open offer
to shareholders for another 26 per
cent, with the combined offers
totalling $2.1bn (1.3bn).
This offer was supposed to have
been made by 18 January, but
Indian concerns have pushed this
part of the deal back.
The acquisition, which would
merge Diageo with the maker of
Dalmore and Whyte & Mackay in
the worlds biggest whisky market
by volume, is being scrutinised by
Indias Competition Commission
and the countrys Securities and
Exchange Board.
It is now believed that the deal
may not go through until the
second quarter of the year.
Shareholders are due to be
updated on the situation at Diageos
half-year results on Thursday.
The company did not comment.
A NEW standard for companies
use of personal data will be
launched today amid increasing
fears over privacy.
Organisations will now be able to
sign up for Fair Data accreditation,
a standard that it is hoped will have
the same effect as the Fairtrade
mark applied to consumer
products such as coffee.
The Fair Data standard, applied
by the Market Research Society
(MRS), is backed by UK information
commissioner Christopher Graham
and global firms PwC and
GlaxoSmithKline. Firms that want
to sign up will be audited by the
MRS and will have to sign up to a
code of conduct.
Fair Data standard to launch in
bid to combat privacy worries
BY JAMES TITCOMB The launch of the mark comes in
the wake of increasing concern
about data privacy regarding the
likes of Facebook and Google, with
web users often unsure about how
much personal information they
give away and how it is used.
Both web firms have been
scrutinised by European regulators,
and a band of MEPs are looking to
introduce tougher curbs on data
usage. London lawyers Olswang are
representing individuals launching
legal action against Google over
alleged tracking of iPhone users
web habits.
If the public are to let their
personal data be used then they
need to know which organisations
they can trust to use it properly,
Graham said.
Brit agency wins Maigret books
nBritish talent agency The Right
House has bought the rights to the
entire catalogue of Belgian writer
Georges Simenon, the creator of
fictional police detective Maigret.
The purchase, which saw The Right
House fend off competition from
Simenons son John, means the
Maigret books a hit in mainland
Europe will be published in English
for the first time. The books will be
published by Penguin, with a new TV
show also in the pipeline.
Lords to quiz Ofcom chief exec
nOfcoms plans for media regulation
could be revealed tomorrow as the
regulators chief executive Ed Richards
is grilled in the House of Lords. The
Communications Committee will quiz
Richards as part of an inquiry into
media convergence, which has
become an increasing issue with
BSkyB selling internet connections
and BT and Virgin Media entering the
pay TV markets. Firms have
complained about Sky exploiting its
dominance of the pay-TV market.
Nokia launches Spotify rival
nNokia yesterday launched a paid
music service in a bid to encourage
more people to buy its Lumia
smartphones. The Finnish company,
which moved into profit at the end of
last year due to improving Lumia
sales, announced Nokia Music+, which
costs $3.99 (2.53) a month. Although
the service is cheaper than the likes of
Spotify, listeners are restricted to a
selection of pre-made playlists on the
service, rather than their own choices.
THE GLOBAL technology patent wars
hit a new high in 2012, with a record
number of applications made for
international computing patents.
A flurry of costly court cases
between smartphone and tablet com-
panies such as Apple, Samsung and
Nokia has upped the value of patents
in the last 12 months, and this was
responsible for a 19 per cent rise in
applications last year, according to
legal information firm Sweet &
Some 14,205 technology-based
applications were made under the
global Patent Co-operation Treaty last
year, compared with 11,974 in 2011.
Intellectual property lawsuits
between technology firms were
thrown into the spotlight last year
when Samsung was order to pay
around $1bn (633m) to Apple after it
was found to have used patented
Apple technology in its smartphones.
The case, one of many that has been
fought between the two companies
around the world, is being appealed
by Samsung.
Meanwhile, Google spent $12.5bn
Patent wars hit
record high as
tech firms fight
on acquiring lossmaking phone man-
ufacturer Motorola, with the value of
Motorolas patent arsenal believed to
be a key factor.
Virtually every major company in
the consumer electronics market is
now involved in intellectual property
litigation with at least one of its com-
petitors, said Gwilym Roberts, a part-
ner at intellectual property lawyers
Kilburn & Strode. Everyone involved
is now arming themselves with a war
chest of patents.
The record figures come amid warn-
ings that patent litigation stifles inno-
vation. Samsung and Apple have both
been warned by regulators to calm
their legal aggression.
International patent applications for computers
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FASHION chain Reiss said the Duchess of Cambridges public appearances in outfits by the
brand helped to raise its profile and boost sales last year. The family-owned retailer said
total sales excluding franchises rose four per cent to 91.1m in the year to 31 January 2012,
up from 87.5m in 2011. Pre-tax profits were flat at 3.64m, according to accounts filed at
Companies House.
UK STEEL firms were only able to
drag their output up slightly in
2012, according to industry data
out this morning.
Firms in the steel industry pro-
duced 184,264 tonnes per week on
average during 2012, EEF subdivi-
sion UK Steel said, an increase of
only one per cent compared to
2011s 182,269 tonnes per week.
This virtual standstill position
is despite the export-oriented
plant in Teesside re-starting last
spring under new ownership, and
leaves UK steel output still around
30 per cent below 2008-9 levels,
said UK Steel director Ian Rodgers.
Rodgers said that the continuing
weakness in euro area car produc-
tion was one major factor con-
tributing to the lack of substantial
recovery in the sector, as well as
reduced construction output.
He also called for more govern-
ment spending on infrastructure,
echoing calls from other business
Eurozone crisis
leaves UK steel
output in a rut
BY BEN SOUTHWOOD lobby groups.
Heavy industry has suffered dur-
ing the recession, with steel out-
put falling from its 2007 high of
14.4m tonnes to 13.5m tonnes in
2008, before collapsing to 10.1m
tonnes in 2009.
A recovery false-start in 2010 did
not help output to increase it
sunk to 9.7m tonnes that year
before inching down to 9.5m
tonnes in 2011.
The 2012 improvement only
brings yearly production up
around 0.1m tonnes.
Steel production inches up as Eurozone crisis continues
2012 2010 2008 2006 2004 2002 2000 1998 1996 1994 1992
20 milliontonnes
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Winston & Strawn
The law firm has appointed
Costanza Russo as a partner in its
London-based corporate
department. She joins from DLA
Piper. Russo focuses on eastern
Europe, and specialises in
advising on cross-border project
and infrastructure finance,
particularly in the transport and renewable sectors.
The broker solutions business, part of BNY Mellon, has
appointed Kevin Bonar as its chief executive. He joins
from Citigroup, where he was head of investor middle
office and wealth management in Europe, Middle East
and Africa. Bonar also previously worked at J Henry
Schroder & Co.
The investment support service provider has appointed
Deborah Yang as head of its index business across
Europe, the Middle East, Africa and India. She joined
MSCI in 2001, and was most recently managing director
and head of client coverage for MSCI Asia excluding
Japan. Yang has also held roles at Donaldson Lufkin &
Towers Watson
The professional services company has appointed
Jeremy Spira to the thinking ahead group in its
investment business. He joins from Mercer, where he
advised clients on investment strategy. Spira has also
held roles at Alexander Forbes, Southern Life, and at
Gemini Consulting.
Trowers & Hamlins
The law firm has appointed Ned Beale as a partner in its
dispute resolution and litigation department. He joins
from Olswang, where he was a senior associate. Beale
specialises in complex commercial disputes.
Quilter Cheviot
The asset management firm has announced two
appointments to its investment management team.
Peter Butcher and Nigel Olliff join from Quartet Capital
Partners. Butcher has also held roles at Killik & Co, and
Olliff has also worked for Adams & Remer.
VTB Capital
Bryan Ko has been appointed head of investment grade
credit trading in Asia at the investment bank. He joins
from Citibank, and has previously held a series of
positions at Morgan Stanley, in both Hong Kong and
+44 (0)20 7092 0053
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
in association with
HOUSE PRICES stayed completely
flat in January, according to data
released this morning.
After inching down a tenth of a
percentage point in each of the
last two months, house prices
stayed flat in the first month of
2013, Hometrack said.
But demand and supply in the
market both seemed to be falling
with Hometrack identifying a 9.9
per cent dive in new buyer
registrations and a 6.8 per cent
slide in the volume of property
listings, all in just one month.
This was the biggest fall in
supply for 48 months since
January 2009, on a rolling six-
month basis, marking an
unusually sharp fall even for a
typically rough period.
House prices
flat in January
INDUSTRIAL firms in China enjoyed
healthy growth in profits in
December, according to official data.
Profits climbed 17.3 per cent to hit
895.2bn (91bn), the National
Bureau of Statistics revealed.
Decembers figure meant that
Chinese industry made some 5.56
trillion in profit over the whole of
2012, up 5.3 per cent on 2011.
These profit numbers are yet
another set of statistics suggesting
the worlds second-largest economy
may have overcome its slowdown.
Growth picked up for the first
time in eight quarters in the last
three months of 2012. And HSBCs
purchasing managers index
business survey for the
manufacturing sector climbed to a
two-year high in January.
China factory
profits grow


OR A man whose airport was
closed by almost half a foot of
snow just days ago, Declan
Collier was remarkably upbeat
when City A.M. met him at the
airports headquarters last week.
Im satisfied that we brought as
much as we possibly could to bear to
the problem, in terms of equipment
and manpower, said Collier, who had
spent the last few days in hourly con-
tact with London City Airports dozen
airlines as they battled unsuccessfully
to stay airborne.
We have the right type of equip-
ment, weve got the expertise, weve
got the crews, weve got the people in
place so its really just down to the cir-
cumstances... That dictates how suc-
cessful youre going to be, added
Collier, after his first brush with snow
since joining the Docklands airport in
March 2012.
The garrulous
Irishman is keen to
emphasise the dif-
ferences between
his firm and the
other London air-
ports, and says City
Airport with its
focus on business
travellers is com-
plementary to big-
ger rivals such as
Heathrow or the mooted Thames
Estuary hub.
In a small way we can help con-
tribute to a solution in terms of slots.
But for the rest of it I dont think we
will impact on an estuarine airport if
thats what happens.
Colliers first project since taking
over the top job has been to re-exam-
ine City Airports own ambitious
expansion plans, having won permis-
sion in 2009 to increase traffic from
60,000 flights a year to 120,000 with a
goal of rising from 3.1m to 10m pas-
sengers within the next 12 years.
The airport will submit fresh plans
to Newham Council in a few months,
which are set to include provisions for
new aircraft stands, a parallel taxiway
to make better use of the runway and,
eventually, a new arrivals terminal.
Underpinning the expansion is a
shift in the whole centre of gravity in
London towards the east, says Collier,
with the redevelopment of Stratford
and a burgeoning enterprise zone
near the airport drawing in millions
City Airports boss
on why Londons
future is in the east
of potential passengers.
He is speaking to firms at the
Silvertown Quays project across the
docks about direct flights to their
main markets. Siemens has already
brokered such a deal with airline
CityJet, this week enjoying the first
services from City Airport to its base in
Nuremberg, and the next generation
of planes will enable links to Africa,
the Middle East and eastern Europe.
I think its one of those virtuous cir-
cles where the development of an
international airport with the develop-
ment of these opportunities ... ratchets
up the benefits, said Collier.
The service offered to businesses is
only possible thanks to the airports
close links with its airlines a refresh-
ing change for Collier, who spent
seven years on the receiving end of
Ryanairs ire as boss of Dublin Airport.
CityJet chief exec
Christine Ourmires
cheers Colliers
fresh perspective
and the speed at
which he has gotten
to grips with a busi-
ness-focused airport.
Collier hopes to
use the growth
plans to create jobs,
for example at the
airports unusual
retail facilities, which track customers
using facial recognition.
Were really space-constrained here.
We cant build though wed love to
a Bluewater type of retail offering.
What that forces us to do is look at
new, innovative ways.
Collier hopes to trial virtual shop-
ping experiences by the end of the
year, allowing time-pressed passengers
to place orders for groceries on a pro-
jected shop shelf, for delivery upon
their return to London.
The airport is currently funding this
upgrade work with existing financing,
and further cash will depend on
Newhams planning decision, he said.
He is tight-lipped about the long-
term plans of Global Infrastructure
Partners and Highstar, the airports
main investors since 2008, though says
they are strong and supportive
I would have to say that theyre very
happy investors in the airport and
were meeting the expectations that
they have quite rightly put on us.
Declan Collier moved from Dublin Airport Authority in March 2012
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Education: MSc in
economics from Trinity
College, Dublin
Lives: Moved to London
from Dublin with wife
and children last year to
take City Airport job
1978: Joins Esso Ireland,
moved up the ranks at
parent company
ExxonMobil in Ireland
and the UK.
2005: Takes up the chief
executive role at Dublin
Airport Authority
2009 - June 2012:
Non-executive director at
Allied Irish Banks
March 2012: chief
executive of City Airport
Were really
here... it forces us to
look at innovative
ways to grow

The Docklands hubs chief executive Declan Collier talks

to Marion Dakers about his ambitious expansion plans
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In association with
HE UKs corporate calendar is
packed this week as many of
Britains biggest companies
deliver their results before the
months end.
Both AstraZeneca and Royal Dutch
Shell are set to give full-year results on
Thursday, while British Sky
Broadcasting, Haynes Publishing and
Rank Group will give interim reports.
Trading announcements are also
expected that day from Gem
Diamonds, Brewin Dolphin,
Enterprise Inns, Babcock
International Group, Investec,
Mitchells and Butlers and Great
Portland Estates.
The busy reporting week starts today
with final figures from Amino
Technologies, Porvair, SThree and
Telefonica, plus trading announce-
ments from Aveva Group and Mitie
Tomorrows news includes an inter-
im report from consumer goods giant
PZ Cussons and trading updates from
Carpetright, British Land, The
Paragon Group, National Grid,
William Hill and Hyder Consulting.
On Wednesday Safestore Holdings
will give its year-end figures while
United Utilities and Imperial Tobacco
will make trading announcements.
On Friday telecoms group BT, ban-
knote printer De La Rue and sweeten-
er manufacturer Tate & Lyle are
expected to update their investors.
Ishaq Siddiqi, of ETX Capital Markets,
was bullish about the expected earn-
This week will be the busiest week
for European earnings and following
on from the better-than-expected earn-
ings we have seen Stateside, expecta-
tions are building from a similar
showing from European blue-chips,
he said.
On the economics front, the week
includes the release of Nationwide
housing figures on Thursday.
Howard Archer, of IHS Global
Insight, said: We expect house price
data to be released during the week by
the Nationwide to show that prices
were flat month-on-month in January,
which would leave them down by 0.7
per cent year-on-year. Latest data from
the Nationwide show that house
prices edged down 0.1 per cent month-
on-month in December having been
flat in November.
On Wednesday, mortgage approval
and lending figures will reveal
whether the sluggish house buying
market is coming back to life.
Friday sees the release of Markit
manufacturing figures for both the
UK and Europe, giving a glimpse of
how private sector manufacturing is
faring. Economists are hoping it will
be more good news after UK manufac-
turing activity rose to a 15-month high
in December. The Purchasing
Managers Index (PMI) edged up to 51.4
in December, up from 49.2 in
November and above the 50 reading
which shows growth.
UK firms set for
busy week of
trading reports
25Jan 21Jan 22Jan 23Jan 24Jan
25 Jan
US indexes are
close to highs
after stock lifts
TOCKS have been on a tear in
January, moving major indices
within striking distance of all-
time highs. The bearish case is a
difficult one to make right now.
Earnings have exceeded expecta-
tions, the housing and labour mar-
kets have strengthened, lawmakers in
Washington no longer seem to be the
roadblock that they were for most of
2012, and money has returned to
stock funds again.
The Standard & Poors 500 Index has
gained 5.4 per cent this year and
closed above 1,500 climbing to the
spot where Wall Street strategists
expected it to be by mid-year. The Dow
Jones industrial average is 2.2 per cent
away from all-time highs reached in
October 2007. The Dow ended Fridays
session at 13,895.98, its highest close
since 31 October, 2007.
The S&P has risen for four straight
weeks and eight consecutive sessions,
the longest streak of days since 2004.
On Friday, the benchmark S&P 500
ended at 1,502.96 its first close
above 1,500 in more than five years.
Once we break above a resistance
level at 1,510, we dramatically
increase the probability that we break
the highs of 2007, said Walter
Zimmermann, technical analyst at
United-ICAP, in New Jersey.
This week will see a wide array of
economic releases which will reveal
whether the current confidence is
well founded.Data out this week
includes figures for durable goods
orders and house sales, out today, fol-
lowed by news on house prices and
consumer confidence tomorrow.
On Wednesday there will be
announcements on mortgage applica-
tions and purchasing prices and the
Federal Reserve will give an interest
rate decision and monetary policy
statement. Figures for spending,
unemployment, construction and
vehicle sales will follow on Thursday
and Friday.
Peel Hunt rates the broadcasting group hold with a target of 845p ahead of first
half results due on Thursday. The broker expects BSkyB to report 3.4 per cent
revenue growth to 3.45bn and flat operating profit of 577m as a result of higher
programming costs. Longer term, Peel Hunt has concerns about growing
competition from the likes of BT in the paid TV market.
Morgan Stanley rates the property firm overweight and has a price target of 570p.
The broker expects British Land to post steady net asset value when it updates the
market tomorrow, leaving it well placed for an expected rise in high-quality real
estate prices this year. Morgan Stanley remains bullish even after a two-month spell
of outperformance that has left the stock close to the brokers target.
Liberum has cut the power group from buy to hold, maintaining its target price
at 730p. The broker sees the stocks value as undemanding yet unexciting,
expecting it to deliver nine per cent annual return over the rest of the decade. Once
regulator Ofgem reveals its latest direction within the month, National Grid
shareholders will have eight years of clarity over 60 per cent of the firms assets.
AHEAD British Sky Broadcasting Group PLC
21 Jan 22 Jan 23 Jan 24 Jan 25 Jan
p 805.0
25 Jan
British Land Company PLC
21 Jan 22 Jan 23 Jan 24 Jan 25 Jan
p 572.5
25 Jan
National Grid PLC
21 Jan 22 Jan 23 Jan 24 Jan 25 Jan
p 710
25 Jan
HROUGHOUT its history the
Square Mile has always been
about far more than just
business. It is also part of
London, part of wider
society, and contributes to the life
of the broader community in
creating an environment
conducive to serving and
supporting business.
Key to this is the City of
Londons role as a leading centre
for arts and culture. We are
fortunate to have some of the most
talented organisations and
individuals in this field right on
our doorstep.
As one of the largest supporters
of the arts and culture in the
country, the City of London
AST weeks grim news that the
economy is flatlining causes two
headaches for the chancellor.
First, his tentative deficit
reduction plan is losing
credibility by the day. Already he has
postponed the date when he will
balance the budget to the middle of
the next Parliament. But his hopes of
closing the UKs unsustainable deficit
are based on growth returning to the
But secondly, growth is desirable on
its own terms. Even without a colossal
budget deficit, any government with a
hope of survival seeks to ensure the
population is richer on re-election day.
The coalition should have thought
through a strategy for growth in its first
weeks of office. If growth is to be a cen-
trepiece of its strategy, a much bolder
approach is needed now. Here are five
simple steps the chancellor could take
with almost immediate effect.
First, he should increase the age range
at which the youth-rate national mini-
mum wage applies. With unemploy-
ment among young people hovering
around 1m, there is a real fear of a lost
Britain needs a
pledge for the future
that proceeds of growth
will go on tax cuts
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.

Dear chancellor: Five steps to inject
some life into a flatlining economy
generation which loses touch with the
labour market. Regionalising the mini-
mum wage or scrapping it altogether
would be the best option. But if this is
unpalatable for the coalition, it should
extend the 4.98 minimum wage to
cover those up to the age of 24, rather
than allowing the higher rate of 6.19
to kick in at 21. Getting people onto the
first rung of the career ladder is an
urgent priority. No-one pretends some-
one in their early twenties can easily
raise a family on an income of less than
5 an hour. But if the alternative is lan-
guishing on welfare, then the alterna-
tive is worse. Just like anything, if you
decrease prices, people will consume
more. We need people to consume
more labour from our young people.
Secondly, we should look at exempt-
ing small businesses and start-ups from
a swathe of regulations. Ideally, a full
scale bonfire of red tape would be
undertaken, rather than the feeble
smouldering overseen by the coalition
to date. But, at the very least, we must
ensure that small business is given
room to grow and breathe.
Multinationals can cope with complex
regulations with relative ease. It is
smaller enterprises that feel the pain of
state interference disproportionately.
Companies with a turnover of under
5m should be able to employ up to a
dozen employees on a self-employed
consultancy basis, exempting them
from the high risk and costs of stifling
labour laws.
Rumours of the chancellors disap-
pointment with some of his Cabinet
colleagues over their failure to adopt
pro-growth plans could perhaps be
addressed through a third policy the
introduction of a formal growth test. If
proposals can be shown to have even a
modest likelihood of impeding eco-
nomic activity, the Treasury should be
able to swiftly intervene and ensure
such proposals are shelved. Some of the
ludicrous suggestions circulating
around Whitehall plain packaging for
tobacco, a minimum price for alcohol
or banning high stakes betting termi-
nals, for example, are all signs of a gov-
ernment fiddling while the economy
burns. The proponents of such patron-
ising and disruptive policies should be
told to desist from their pet campaigns
at the very least until the economy is
booming again.
A fourth plank would be to make the
life of regulators harder rather than
easier. Many small businesses complain
about the heavy-handed, officious
demands for immediate compliance
from a range of agencies. Tougher rules
should be put in place to ensure that
businesses are given clear guidance,
not knocked off kilter by on the spot
checks (unless there is an immediate
threat to life and limb), and are granted
a generous period of time in which to
comply with any orders. The right of
businesses to fight back against regula-
tors needs to be strengthened.
Finally, the chancellor should make a
pledge for the future. He should state
that as soon as his delayed plans for
closing the deficit are completed, any
future proceeds of growth will be
used to reduce taxes, not increase
spending. This is a promise of tax cuts
in five years time, but it would at least
signal that governments intention is to
unleash enterprise rather than spend-
ing the practical maximum amount in
the state sector.
Of course, the UK economy is to a con-
siderable degree at the mercy of the
global economy. Nevertheless, promot-
ing growth can be a choice for this gov-
ernment, not merely an aspiration.
Sadly, it is a choice it seems incapable of
making with any conviction.
Mark Littlewood is director general of the
Institute of Economic Affairs.
Corporation funds facilities as
diverse as the Barbican and the
Museum of London. We do so
because these organisations have a
positive impact on our common
quality of life. And we do our best
to make as much as possible
available to as many as possible
through partnership with other
London boroughs.
As well as the social benefits of
widening horizons and raising
aspiration, the City arts and
culture cluster also delivers
tangible economic output. A new
report demonstrates that it creates
an impressive additional 291m to
the economy and supports 7,200
jobs across London.
This underscores the economic
and business case for investing in
the arts and culture. But City
institutions also invest in this area
because they recognise the
positive benefits to the wider
society of which they are part. It is
investment and return that
cannot be simply captured on a
spread sheet or an analysis of
value for money.
Far more than this, it is about
public good and the good society
over the long term. This takes
many forms. It might be through
patronage: commissioning
artwork, supporting artists or
sponsoring major exhibitions all
ventures that would be impossible
without corporate support.
Or it might be long-term
philanthropy endowing
foundations to support the arts
and artists, now and in the future.
This is a tradition drawn on for
this years Lord Mayors Appeal,
with the main beneficiary a new
charity, the City Music
Foundation, supporting talented
young musicians at the start of
their careers and helping them to
fulfil their potential. It is in
harmony with the Citys cultural
In recent times, the Guildhall
School of Music and Drama has
played its part in shaping the
future careers of two great British
cultural figures: Daniel Craig and
Daniel Radcliffe, who played
James Bond and Harry Potter
This just goes to show the City is
not solely a place where
professionals come to ply their
trade. The Square Mile has always
been home to a diverse cluster,
with the arts and culture
continuing to be a key component.
Roger Gifford is lord mayor of the
City of London.
Arts and the City are bound together in the interests of our wider society
In association with
Debt mechanics
[Re: Economic perfect storm: The four
trends that killed Western growth, Tuesday]
An excellent summary of our economic
troubles. But I have an inflation-related
observation. Tim Morgan refers to a shift to
immediate consumption as the cause of
debt growth. But its wrong to blame
consumers. Our economic policy is to blame.
Morgans evidence is the growth of debt
relative to GDP being inconsequential until
around 1981, then relentlessly upward. But
the growth of debt was essentially the same
both before and after 1981. What changed
was inflation. Before 1981, inflation kept GDP
rising rapidly, eroding the real value of debt.
When inflation fell after 1981, inflation could
no longer have the same effect.
Thomas Dawson
Pension reforms
[Re: Incentive to work will be dampened by
pension reform, Friday]
Sheila Lawlor is quite wrong to say that our
reforms to the state pension will not
incentivise work. We are, in fact, returning to
Beveridges original vision of a single,
simple, flat-rate state pension, which
recognises contribution in the workplace.
But we will also have a state pension fit for
the twenty-first century, which recognises
the equally vital work of people bringing up
children, carers of the disabled, and the self-
employed. This builds on the existing
crediting arrangements and, along with a
legal duty for employers to contribute to a
workers workplace pension, is surely in
everyones interests.
SteveWebbMP, minister for pensions
HE world may be on the brink
of a currency war, if not
already engaged in covert
hostilities. Japans new
government has done much to
foster the idea that competitive
devaluation is the order of the day, by
bullying the Bank of Japan to achieve
2 per cent inflation. But even before it
came to power, there were
complaints from emerging
economies that policies of extreme
monetary easing, especially in the US,
were destabilising foreign exchanges.
Some say a currency war cant be
underway because no major central
bank has intervened on the foreign
exchanges. Yes, the Swiss National
Bank (SNB) staged an intervention
after September 2011 to restrain the
Swiss francs appreciation against the
euro. But the SNB was not unilaterally
seeking a trade advantage.
But policymakers have developed
more subtle ways of influencing
exchange rates. Since domestic
demand is much less responsive to
macroeconomic policies than before
the financial crisis, monetary meas-
ures may be deployed to influence
exchange rates with minimal risk of
unwanted consequences. Further, the
power of central bankers to influence
exchange rates through statements
seems to be much enhanced. Other
market participants are now too con-
strained to launch any challenge.
It might also seem that there can be
no winners in a currency war. After
all, if one central bank weakens its
currencys exchange rate, others may
take action to reverse that gain. But
there are dangers. When a central
bank sets its currency on a weaker
course, it is relying on retaliation to
provide a safety net. The risk is that
market dynamics take the exchange
rate far lower than the central bank
might wish. If it can bank on competi-
tors taking counter-measures to
Is there still a case for high-rise tower blocks
as attractive buildings for Londoners to live?
There are cities all over the world that have no problem with
high-rise living, from New York to Singapore. Land in London is
scarce and we need to make the most use of it not only to
ensure the city has space to grow, but also that we protect those
green spaces that make London special. There are also wider
green considerations knocking down perfectly good buildings
can be very unfriendly to our environment. Where there are
problems in the UK with high-rise, it is usually a reflection of the
management of the building and its environment, or poor design.
But it is possible to manage a high-rise well. People often point
towards low-rise cities such as Paris or Washington as exemplars.
But each of these has its own significant housing and crime
problems. The best cities offer variety, and that is something
London does well.
Ian Fletcher is a policy director at the British Property Federation.
Ian Fletcher
Alex Morton
The UKs housing crisis presents an opportunity. There are many
ugly multi-storey council estates built between 1950-1980 in the
UK, and our research calls for them to demolished and replaced
with terraced houses and low rise flats. Multi-storey living is
unpopular. It alienates residents and exacerbates crime. Yet
planners now support building more high-rise council estates. This
is delivering far too few new homes in London (construction on
just 16,000 homes began in the latest annual period). Multi-storey
council estates in London and elsewhere need to undergo a
redevelopment programme involving local people in the planning
process. This will deliver the homes people want to live in. We
believe this will mean more terraced streets and low rise flats not
more modernist concrete slabs.
Alex Morton is head of housing, planning & urban policy at Policy
Currency war now
threatens to throw
world off balance
ensure their own currencies do not
become too strong, the chances of a
destabilising currency collapse may
be minimal.
The danger is that the central bank
miscalculates. Competitor central
banks may not respond as promptly
as it expects, or the measures they
take may be ineffective. Then, curren-
cy collapse, with attendant losses
from mismatched currency positions,
may become a threat to global stabili-
ty. This is a dramatic scenario and, in
practice, there may be only a small
chance that it would play out.
More substantial is the chance that
central banks would resort to capital
controls. And increasing impedi-
ments to the free flow of capital
would lower the growth rate of the
world economy.
Even if capital controls were avoid-
ed, and no exchange rates collapsed, a
currency war would still almost cer-
tainly bring about an increase in
exchange rate volatility. As one central
bank and then another brought
downward pressure on its currency,
exchange rates would fluctuate more
violently. The result is that companies
operating across currency borders
would need to build into their calcula-
tions wider margins to account for
the increased possibility of exchange
losses. Exporters would raise prices.
And this would be the wrong sort of
inflation from policymakers point of
view the sort that eats into cus-
tomers spending power.
Stephen Lewis is chief economist at
Monument Securities.
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Start ying to Europe from the
centre of London, not the outskirts,
with London City Airport.
visit cityjet.com
Isnt it bizarre that people jump on GDP to
question the effectiveness of fiscal policy,
but not monetary policy or structural factors.
GDP-employment paradox may be partly
explained by declining output of capital
intensive industries like North Sea Oil.
The plan for growth was meant to be cutting
government consumption spending. But
that hasnt started happening yet.
Boris Johnsons seven point plan for London
includes a new airport, Crossrail 2, and lots
new houses. Austerity is expunged.
LETTERSto the editor
E: theforum@cityam.com | Comment: cityam.com/forum | @cityamforum
NVESTORS are often told that
minimising costs should be a
priority. However, there are certain
instances where paying a little bit
extra can reap rewards.
This may be the case when it comes
to choosing between open-end funds
and close-end funds. Recent research
from Winterflood has shown that,
over the long term, closed-end funds
(despite often being more costly over-
all) have outperformed their open-end
Each type invests in similar assets:
stocks, bonds and property, both
domestically and internationally.
However, close-end funds tend to be
more actively managed, meaning that
a fund manager specifically chooses
certain holdings, believing that they
will outperform the market.
There are thousands of open-end
funds in the UK, and some are also
actively managed. But Jason
Whitcombe of Evolve Financial
Planning says that there has been a
suspicion that some merely mimic
their benchmark index, rather than
actively trying to outperform it. For
Whitcombe, at least, this is because
the failure by an open-end fund man-
ager to at least match his or her index
is akin to professional suicide.
At a glance, both open and closed-end
investments look similar. They can be
purchased from fund platforms, like
those offered by Hargreaves Lansdown
or Bestinvest. Both can be held in an
individual savings account (Isa) wrap-
per, or a self-invested personal pension
(Sipp). The key difference lies in their
different legal and charging struc-
The two main types of open-end
funds are open-ended investment
companies (OEICs), in which you buy
shares, and unit trusts, in which you
buy units. A closed-end fund (like an
investment trust), on the other hand
is a public company, listed on the stock
The charging structures are where
these differences begin to matter.
Pricey funds may
pay off over time
Open-end funds typically charge
upfront fees of around 5 per cent of
assets under management (AUM),
although some brokers offer discounts.
They also charge annual management
fees of about 1.5 per cent of AUM.
Closed-end funds, on the other hand,
are listed shares. Consequently, you
incur dealing fees (around 10 per
transaction) and stamp duty. This most-
ly means they are more expensive.
However, where the value of an open-
end funds is derived from its underly-
ing net asset value, closed-end funds
can trade at a premium (or a discount),
based on the demand and perform-
ance of the fund.
Winterfloods research shows, in the
last quarter, closed-end funds outper-
formed their open-end equivalent in 14
out of the 15 subsectors. And, over a 10-
year period, they outperformed in 13
out of the 15 subsectors (see chart
below for relative outperformance).
Danny Cox of Hargreaves Lansdown
says that one reason is that they are
able to use leverage, which can amplify
returns over time. He points to
Standard Lifes small cap fund, and
Aberdeens Asian fund as good exam-
ples of well-run investment trusts.
But is this a price worth paying? While
closed-end funds have outperformed,
they tend not to be as liquid as open-
end funds, particularly for smaller
investment trusts. At times, this can
make it tricky to sell your holdings.
Witcombe says the choice should
come down to your sophistication as
an investor. Anyone seeking an active-
ly-managed fund should look at invest-
ment trusts, he says. They may be
more suited to investors that are confi-
dent about picking specific funds.
Those looking for passively-managed
investments for example trackers
that match the performance of an
underlying index may be suited to
open-end funds.
Despite the extra fees associated with
investment trusts, their performance
makes them worthy of consideration.
Sometimes, it is worth paying extra.
The trick is understanding what the different
structures mean, writes Yogesh Chandarana
Outperformance of investment trusts versus open-end equivalent



Europe Global
UK Growth UK Growth
& Income
Asia Pacic
ex Japan
UK smaller

HE disillusioned young
worker struggles out of bed at
dawn and heads off to a
menial and mindless job,
offering only pitiful pay, poor
treatment, and long hours. Happens
in Asia, right? Africa? Well it
happens here too. I met two people
recently with worrying stories.
Betti was excited about the world.
She had just graduated with a good
degree in Language, Literacy, and
Communication. All the hard work
through high school and university
had paid off. Looking forward to an
exciting career, she decided to
expand her experience by doing a
one month, unpaid internship with
a PR company. Once there, she was
given a wide range of trivial tasks,
things other people didnt want to
do: photocopying, filing, and
running errands. She was treated as
very junior and was even severely
reprimanded for talking to a client
at a champagne function. Her role
there, it was made clear, was simply
to hand out brochures.
So while Betti wasnt enjoying the
internship, she told herself that
there were plenty of positives. She
was building a CV, learning about
office life, and hopefully picking up
background information about the
business world. With this in mind,
she agreed to extend the unpaid
internship for a further three
months on the promise that she
would then be offered a paid
position. She should have agreed
the salary in advance, because when
the offer finally came, her heart
sank it was only 12,000. As a
graduate, she had expected
18,000. She was close to
walking out the door in
disgust but, fearful of the
job market and mindful of
the four months invested,
she reluctantly accepted.
With the long hours she
works, she calculates that
she earns less than an
unqualified school
leaver working at
Another young girl, Alex,
graduated with a good degree in
Art, History and Italian, and saw an
ad on Twitter for an internship at a
fashion company. The company was
putting on a big show and was
hiring interns to help out. The
people were very pleasant and
treated her well. The mistake
Alex made was to use her own
debit card to purchase minor
items for the company, such
as materials, tools and glue.
At the end of the six-week
stint she was owed about
150. The company
didnt reimburse
her. After being
run around in
circles, she
started legal
action. That
finally nudged the company into
paying her. When Alex told me this
story, I had some sympathy for her
employers, because I suspected they
were struggling to survive. However
that sympathy quickly evaporated
when she told me that they seemed
to be prospering. And with a staff of
four full-time employees, they
used wait for it 12 unpaid
Now, I do know that many interns
are treated very well. However, in
some cases, maybe many cases, I
fear their biggest business lesson is
that the more free labour you can
hire and tire, the better. Even in the
Richard Farleigh has operated as a
business angel for many years, backing more
early-stage companies than anyone else in
the UK.
Annabel Palmer asks Jeff Lynn whether new lending schemes can really help entrepreneurs
ROWDFUNDING started in
the 1990s and aimed to bring
together people with similar
interests to fund a project or
business. Since 2008,
however, following the decline in
bank lending to small businesses, it
has found a new face. Large numbers
of private investors are linking up
through online platforms to
companies usually early stage start-
ups. But is this a feasible concept for
entrepreneurs and investors?
Jeff Lynn is chief executive of one
such platform Seedrs and is opti-
mistic that the concept will succeed.
A former corporate lawyer at Sullivan
& Cromwell in the US, he came to do
an MBA in Oxford with a view to
working in entrepreneurship. By late
2008, he and the companys chief
operating officer Carlos Silva had
noticed the advent of peer-to-peer
lending. After establishing that the
technology could also work for start-
ups, they obtained FSA regulation, a
long but doable process. But if
theres one thing financial regula-
tion is there for, beyond perhaps pro-
tecting bank deposits, it is to regulate
the way you offer shares in unquoted
companies to a wide group of
investors, says Lynn.
But he had another concern: the
fear that this is a high-risk asset class,
and you dont want the proverbial
widows and orphans losing their
money. Seedrs responds to this by
asking potential investors to com-
plete a questionnaire, to show they
understand the risks involved. They
have had 4,500 people join as autho-
rised investors on their platform in
the six months theyve been live. So is
this a good option for entrepreneurs
who may struggle to find funding
The start-ups that approach Seedrs
are almost always those who would-
nt get a bank loan. But its high-risk,
high-reward businesses that were
looking for. To qualify, entrepre-
neurs have to complete a bespoke
form that addresses the three things
Seedrs sees as most important to
investors: whats the idea, whos
their market, and whos the team
behind it. They review each form like
an investment bank would verify a
prospectus: is it fair, clear, and not
misleading? Were not looking to
see if its a good business. We let our
Standing out from the
crowd in a new market
Company Name: Seedrs Limited
Founded: 2009 (launched 2012)
Company Turnover: Negligible (VC
and angel funded)
Number of staff: 15
Job Title: Chief executive
Age: 34
Born: New York City
Lives: London
Studied: MBA, Said Business
School, Law at Pennsylvania,
Virginia and Oxford
Drinking: Peaty single malts,
Tennessee sipping whiskey
Reading: The Gentry, by Adam
Favourite business book: When
Genius Failed, by Roger
Talents: Expert stir-fry maker
Motto: Disce ut semper victurus,
vive ut cras moriturus - Learn so
that you may always succeed, live
as if you will die tomorrow
First ambition: Being a trial lawyer
for criminal cases
Heroes: Charlie Merrill, Lady
Jeff Lynn was ranked by GQ as one of the UKs most influential men of 2013
The big bad business of exploiting eager interns for free labour
investors make their own decisions.
Of the 80 to 90 companies that have
been listed, 12 are now fully-funded.
After only a few months, of course, its
too early to say whether they will suc-
ceed or fail. But risk always comes
with failure. There must be risk
because otherwise someone else
would have done it already. I ask why
they believe some start-ups dont suc-
ceed. In my experience, there are two
key reasons, says Silva. The first is a
lack of focus early on. The second is the
simple fact that not everyone is neces-
sarily a good entrepreneur.
Lynn believes a consolidation of the
market is forthcoming, and he wants
to make sure Seedrs has a seat at the
table. More and more crowdfunding
companies are cropping up. But were
the first to be regulated, and the
fastest-growing in the UK.
Nonetheless, he is uncertain of
crowdfundings future. I worry about
the cowboys who could spoil it for us
all. And this is a very high-risk asset
class, many businesses will fail, and if
those failures arent handled right, or
investors arent properly briefed on the
risks, there could be issues. Despite
his reservations, Lynn sees the concept
of people putting their personal
money behind businesses that interest
them as the state of nature. And he
believes that the notion of online inter-
mediaries facilitating essentially direct
transactions between providers and
recipients is the future of finance.
Crowdfunding can certainly help
entrepreneurs raise funds when they
need it most, so lets hope the cow-
boys dont ruin it. Because, as yet, it
isnt widely seen as a credible alterna-
tive to banks or venture capitalists.
HE debate about business financing
has reached an unpleasant standstill.
Depending on who you listen to,
banks are either refusing to lend,
firms are too scared to borrow, or a
hodge-podge of other factors is making one
or the other do both or neither. Its a mess.
Whats lost is an idea of the mechanics of
business lending, and how you can ensure
youre able to borrow the right amount at
the correct rate. Unfortunately, research by
Shelley Stock Hutter, an accountancy firm,
suggests this is easier said than done.
Bobby Lane, a partner at the firm, tested
the credit ratings of a sample of his clients.
By comparing the limits offered by three
agencies, he unearthed a striking
discrepancy. One firm in 2011, for example,
was given limits of 5.6m, 400,000, and
850,000. Another was worth either
7,000, 290,000, or 100,000. Which is
correct? Since credit algorithms are as
complex as actuarial tables, its hard to say.
It may all sound academic, but the
implications are serious. Most obviously, a
lender may stay safe and use the lowest
rating on offer preventing access to funds,
potentially in defiance of a companys true
financial situation. But it may also affect a
firms relationship with clients or suppliers. If
your credit rating is poor, youll have to pay
cash on delivery for a factory order, for
example an inconvenience worth avoiding.
Whats the solution? Lane explains that
agencies often judge credit worthiness on
publicly-known information, like accounts
filed at Companies House. But many firms
are nervous about disclosing all their
financial details, he says, so they only file
abbreviated accounts. There is an argument
for offering agencies your full management
accounts to give them the complete picture
of your companys financial health. It could
be better for this to come through a third
party your bank or accountant to give
the information more legitimacy.
But also make sure rating discrepancies
arent hurting your dealings with clients or
customers. Its not always safe to rely on the
figures offered to you. Due diligence is key.
Tom Welsh is business features editor at
City A.M.
Credit ratings may
require revision
Put upon: Anne Hathaway
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Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
1 2 3 4 5 6
8 9
11 12
14 15
17 18
20 21
11 26
21 13
16 17 6
10 20
7 8
14 12 4
12 17
30 28
1 Barrage balloon (5)
5 Concession given
to mollify (3)
7 Sophisticated,
rened (6)
8 Australian wild
dog (5)
10 Bundle of bres that
transmits a signal
to the brain (5)
11 Ardently serious (7)
14 Extremely poisonous
substance (7)
16 Final Greek letter (5)
17 Biting tools (5)
19 Plug for a bunghole
in a cask (6)
20 Biblical character
whose wife was
turned into a
pillar of salt (3)
21 One who drives cars
at high speeds (5)
1 Carnivorous
mammal (6)
2 Drinking vessel (3)
3 Dig into (5)
4 Lose consciousness
5 Reticent (9)
6 Catholic Holy
Father (4)
9 English region around
and Durham (5,4)
12 Put into words (3)
13 Located beneath
something else (6)
14 Small house in
the woods (5)
15 Thespian (5)
16 Elliptical (4)
18 Hour at which
something is
due (inits) (3)



1 3 2 1 4 2
7 6 9 8 9 8 5 7
4 2 7 9 1 6 5 3 8
9 4 8 3 7 1 2
8 3 7 6 8 3 4 9
9 3 5 1
4 7 5 2 1 3 6 1
7 9 4 5 7 8 9
1 6 4 5 8 9 2 7 3
2 4 3 1 3 1 5 2
8 9 6 8 3 9
The nine-letter word was
A fed up Miranda packs her bags to
go travelling. Miranda Hart, Patricia
Hodge and Tom Ellis star in the hit
comedy. Last in the series.
Part two of two. Hathaway makes a
discovery at the Faulkners farmhouse
in Croatia. Guest starring Lucy Speed
and Peter Davison.
The doctors advise patients with food
phobias and calorie addictions,
including a woman who avoids fruit
and vegetables.
T THE heart of fine living is
the art of fine dining. And
both are flamboyantly
showcased at the annual St
Moritz Gourmet Festival this month.
Every year the rich and famous flock
to St Moritz for the season, and the
town prides itself on the exquisite
food and wine it has to offer them.
The Gourmet Festival is the
centrepiece (along with the Polo
World Cup on Snow) of the winter
calendar, and at 1,850 metres,
visitors enjoy Michelin-star food
amid a champagne climate dry,
sunny and rising to above 3,000
metres on the slopes.
London City folk have the advan-
tage of easy access by air Swiss flies
from City Airport to Zurich in 90
minutes; once you touch down,
wheel your bag over to the train sta-
tion, hop on the Swiss rail network
and youre whisked through the
mountains into the centre of St
Moritz town.
This year, the nine guest chefs at
the gourmet festival are from
Belgium, Germany, France, Hong
Kong, Italy, Portugal and the US.
They have 20 Michelin stars between
them (four of them head up three-
Michelin-star restaurants).
You can book gourmet dinners
held at prestigious hotels, or buy
tickets for lunches, parties, work-
shops and tastings in glamorous ven-
ues around the region, including
mountain lodges. The Gourmet
Safaris are the golden ticket, chauf-
fering you around the five festival
partner hotels to dine at exclusive
chefs tables.
As anyone who has dined at a chefs
table knows, the experience com-
bines the exclusivity of a private din-
ing room with the informality and
artistry of the kitchen. Badrutts
Palace hotel, on the shores of lake St
Moritz, is a major festival partner,
with seven restaurants of its own
(including Nobu@ Badrutts Palace
for lovers of Nobuyuki Matsuhisas
fusion of Japanese and Peruvian cui-
sine). Its chefs table can be arranged
for you any time during the winter
and summer seasons, overseen by
executive chef, Mauro Taufer.
You arrive to be seated at a round
table with copper pans to one side
and the open kitchen to the other (it
is actually where the chefs them-
selves eat at other times). Hopefully
when you are presented with an
appetizer you wont do what I did.
Receiving a dish of dry white stuff
(cooked egg white without fire)
and caviar I found it such an alien
plate that I accidentally took a fork-
ful of the bed of raw rice that the
giant crisps were standing in, and
felt very plebeian indeed.
To follow we had steamed scallops
and Savoy cabbage, goose liver and
brioche bread sauce delicious sub-
tle flavours of scallops wrapped in
appetising leaves, with the inevitable
foie gras popped in there for its rich
fat content. Our table loved this and,
overall, the five courses, two wines,
coffee and petits fours was a hit as
much for the unstuffy yet refined
ambience as the menu.
If you want formal, Le Restaurant
is Badrutts Palaces flagship French
experience, but the well-heeled and
well-known often prefer a more inti-
mate meal and head to the rustic
chalet restaurant, Chesa Veglia, in
the centre of town. It was originally a
17th-century farmhouse, bought by
the Badrutt family and converted in
1936. Its warren of rooms now house
two bars and three restaurants. The
wood-fired pizza oven, red-checked
tablecloths and traditional alpine
furniture are warm and jolly, and a
nice counterpoint to the grandness
of the hotel.
Up in the mountains you can dine
like a king. At the top of the funicu-
tourism to the Alps is attributed
to one man Johannes Badrutt. A
hotelier of the late 19th century,
Badrutt bet a group of English
summer alpine tourists that they
would love the winter sunshine of
St Moritz as much as the summer
meadows. They did. He opened
the grande dame of the town,
Badrutts Palace in 1896 and it
has remained in the family ever
since. The fifth-generation
independent hotel, with
welcoming, attentive service,
brings with it a fiercely loyal
following, especially among
celebrities, world leaders and
royalty (guests have included the
Prince of Wales, George Clooney,
Audrey Hepburn, Liz Taylor and
Richard Burton), who demand
privacy and discretion there is
hardly a reception desk at all, as
check-in is in-room with your
Some things have changed
balconies have been added to
south-facing rooms to give private
views over lake St Moritz; an eco-
heat-pump system uses water
from the lake, and the Kings Club
is a disco heaven attracting queues
of young Italians with deep
pockets full of Swiss francs. But
the star of the show is the CHF
70m (47m) Palace Wellness spa,
the final phase of which was
completed in 2010.
Badrutts Palace hotel: a history
St Moritz Gourmet Festival
For the next five
days, St Moritz in
Switzerland will
become the culinary
centre of the world
Laura Ivill tells all
The annual gourmet
festival is just one
highlight of the St Moritz
and Engadine Valley
calendar. Switzerland has
around 40 ski areas and
resorts to choose from,
so St Moritz has
developed into a winter
resort with a lot else
going on. Its not as
picture-postcard alpine
pretty as, say, Gstaad
(some 70s buildings in
the town are rather
unlovely), and might
best suit intermediate
skiers for a long
weekend (rather than
beginners or expert
skiers on a week-long ski
holiday). However, it is
one of the worlds most
glamorous playgrounds
for the global elite and
their families, who enjoy
spending lavishly in its
Bond Street-style shops,
as much as in the
mountain restaurants.
winter activities
and sports
Clockwise from top left: a
St Moritz tourism poster
from 1924, the town by
night; the St Moritz ski
marathon and the world
famous Cresta Run
The extravagant caviar menu
tops out with beef carpaccio with
truffles and smoked salmon with
caviar for a cool 265

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M SERIOUSLY afraid of heights and Im
not the best swimmer, Ben Fogle says
as I catch up with him over the phone
just after he landed in New York before
jetting off to Buenos Aires. But scared isnt
exactly the first word that springs into
mind when you think of the 39 year-old
father or two, especially in light of his
latest mission to swim the Atlantic.
Hes given himself 100 days to swim
from the United States to Cornwall and the
challenge will see him in the water for 12
hours a day in temperatures of minus two
degrees Celsius. I think 100 days is
realistic, he says when asked why he
wont try to challenge the existing 73 day
record achieved by Frenchman Benot
Lecomte in 1998. I just want to stay safe
and I think 100 days is a good length of
time to achieve that. Its something Ive
been working towards for my whole
career. Everything Ive done has built up
to this.
Hes preparing for the big swim by
training for a 1,000-mile trek in the desert
with double Olympic rowing gold
medallist James Cracknell. Its the first
thing the pair have done together since
Cracknell suffered a serious head injury
after being hit by a truck when the pair
attempted to travel from Los Angeles to
New York in 16 days. For anyone who has
followed Fogles career over the past ten
years, his decision to take the challenge
on wont come as a surprise. While hes
most commonly known for presenting a
string of successful shows like Wild in
African and Animal Park, its his
expedition series that have made him one
of the countrys best known TV
In 2006 he placed first in the pairs
division of the 2006 Atlantic rowing race;
he participated in a 3,000-mile mountain
bike race across the Rocky Mountains
from Canada to the border of Mexico and
managed to cycle the 424 miles from
Edinburgh to London in 60 hours non-
stop. The list goes on.
His first TV outing, of course, was
2000s Castaway, which was among the
first reality TV shows in the world,
following a group of 36 people as they
were left on the Scottish island of Tarnsay
for a year, forcing them to create a self-
sufficient community. His role on
Castaway came after he decided to give
up what he calls his sensible job serving
as the pictures editor at Tatler magazine.
The next time you see him will be on his
latest series, Year of Adventures. Ive had
a bucket-list of challenges that I want to
do and Ive managed to do a lot of them
in the show, like a mountain marathon
and a car rally in Italy. Each episode
features a new challenge that I work
The idea came from an existing book,
Year of Adventures, that I had been
following so I just picked out 25
challenges from the book. Naturally, you
should expect to see a lot of risky
moments. Im afraid of heights, so for
one challenge I jumped out of an
aeroplane after just six hours training.
Thats what I love. I could do easy
challenges but why would I? And his
travels havent been completely trouble
free. Over the years hes picked up a
serious skin eating disease and was forced
to pull out of a challenge in 2011 after the
threat of great white sharks when he was
planning to scuba dive in Western
So how did he tell his wife hes about
to aim for the summit of the Dolomite
Mountains in Italy without using a harness
or that he plans to lower himself into a
freezing glacier in Iceland? I make sure I
approach the issue with my wife very
tactfully. But I proposed to her after I
rowed across the Atlantic so shes always
known what I do. There have been
occasions when we both agreed for me
not to do something, though.
Hear more about Fogles travels at his
talk at the Destinations Holiday and
Travel Show at Earls Court on 1
February. Tickets from 10 for adults, kids
under 12 go free. Visit
destinationsshow.com for more informa-
Ben Fogle: everything Ive done has
built up to swimming the Atlantic
lar at the Corviglia ski area (2,486
metres up), there are six restau-
rants owned and run by Reto
Mathis, president of this years
Gourmet Festival and the son of
the festivals founder. These
include a fine-dining restaurant, La
Marmite, with truffle and caviar
specialities (on a good day, Reto
can sell up to 120 bottles of cham-
pagne and 3.5kg of Iranian caviar).
The waiting staff are dressed in
Swiss outfits, and the dining area
is open-plan with wide, dazzling
mountain views.
If you know someone whos
always wincing at the price of a
ham and cheese baguette in moun-
tain cafes, its worth taking a photo
of the caviar menu and sending it to
them it tops out with beef carpac-
cio with truffles and smoked
salmon with caviar for CHF 395
(265). Coincidently, this is exactly
the price of the Gourmet Safari, so
if you are planning to join worlds
foodie elite here, the festival is not
bad value at all.
Details: The St Moritz Gourmet Festival
runs 28 January to 1 February, 2013
(stmoritz-gourmetfestival.ch). Doubles at
Badrutts Palace from CHF 490 (330),
including breakfast (badruttspalace.com).
SWISS offers daily flights to Zrich from
London Heathrow, London City,
Birmingham and Manchester, from 119
return, including transport of one pair of
skis and boots (swiss.com). The Swiss
Transfer Ticket covers one return train jour-
ney within a month between the airport
and any destination in Switzerland, from
90 (myswitzerland.com).
insiders guide
n Skiing: downhill, cross-country,
telemark, heliskiing; freestyle park
n Ice-skating n Cresta Run
tobogganing n Bobsleigh n Cartier
Polo World Cup on Snow n White Turf
horseracing n Horseriding n Bobsleigh
n Ice hockey n Ice climbing
n Paragliding n Hiking n Curling n Cricket n Hot-air ballooning
n Horse-drawn carriage rides
n Spa
CHELSEA manager Rafael Benitez
last night confirmed the clubs
opposition to Football Association
plans to extend Eden Hazards
three-match ban for an altercation
with a ball boy.
Benitez spoke after a late
equaliser from Fernando Torres
spared the European champions a
hugely embarrassing FA Cup
fourth-round defeat at League One
Brentford. The FA announced its
intention on Friday to impose
further punishment on Hazard for
appearing to kick a ball boy during
Wednesdays Capital One Cup exit
at Swansea, deeming his automatic
ban clearly insufficient.
At the moment, we will accept
that three games is enough. We will
see what happens, said Benitez,
whose club has until tomorrow
evening to contest the charge.
For a player that was in a cup
competition, with this intensity
and in the way that things are
Benitez: Three
games enough
for Hazard ban
SPURS boss Andre Villas-Boas believes
his squad has sufficient depth,
despite suffering an embarrassing FA
Cup exit at the hands of Leeds United
just days before the transfer window
slams shut.
Attacking midfielder Clint Dempsey
started up front for Tottenham at
Elland Road yesterday, yet his glanc-
ing header on the hour mark was not
enough to save the day after Leeds
had taken a two-goal lead through
Luke Varney and Ross McCormack.
Jermain Defoe Spurs only experi-
enced striker while Emmanuel
Adebayor is away at the Africa Cup of
Nations was left out, with his man-
ager citing a minor injury.
We missed Defoe today, but we
have him back for Norwich [on
Wednesday]. I think we have strength
in depth. It is a risk were willing to
take, Villas-Boas said, referring to his
Cup defeat
wont force
Spurs boss
to splash out
limited supply of centre forwards.
[Todays defeat] wasnt because we
missed a lot of chances. We lost
because we could not create enough
clear-cut chances.
Spurs are offering German club
Schalke 04 a fee if they allow wide
midfielder Lewis Holtby to move to
White Hart Lane before the transfer
deadline this Thursday night, yet may
not bring in another striker.
The north Londoners were caught
out after a quarter of an hour of yester-
days tie. A nice backheel from El Hadji
Diouf set Varney free behind the back
line, the ex-Charlton man cutting in
and curling the ball past Brad Friedel.
And it was groundhog day five min-
utes after the break, as Diouf lobbed a
ball over Spurs high defensive line.
McCormack ran it into the penalty
area, turned Steve Caulker and drove a
left-footed shot inside the far post.
Eight minutes later a Gareth Bale
cross was headed in by Dempsey, but
despite the introduction of Mousa
Dembele and Jon Obika the visitors
were unable to find an equaliser.
LIVERPOOL manager Brendan
Rodgers slammed his team last
night, after they crashed out of the
FA Cup at League One Oldham.
A brace from Matt Smith and a
superb header by Reece Wabara
earned Oldham a fifth round clash
against Everton, despite goals from
Luis Suarez and Joe Allen.
I was bitterly disappointed with
the young players as they had a
concentration and only had spells
when we were at the right level.
A second minute header from
Smith opened the scoring, while 15
minutes later Suarez slotted home
an equaliser. But in first half injury
time a Brad Jones howler gifted
Smith his second. Wabaras climbing
header just after the break was
enough to seal the win, with Allens
80th-minute strike proving futile.
LEEDS UNITED............................2
TOTTENHAM HOTSPUR...............1
OLDHAM ATHLETIC.....................3
Kate & Lucas
03.10.12 at 6.04pm
Now its your turn to
meet someone amazing

Senegalese forward El Hadji Diouf, seen
holding off Spurs defender Steve Caulker,
set up both goals for Leeds yesterday
Rodgers rages at young flops
Fifth round
Huddersfield or Leicester v Wigan
MK Dons v Barnsley
Oldham v Everton
Luton v Millwall
Arsenal v Blackburn
Manchester City v Leeds
Manchester United v Reading
Middlesbrough v Chelsea or Brentford
Ties to be played on weekend of 16
and 17 February
chance to compete for a club that
has to challenge for trophies,
Rodgers said. We lost our
Torres equalised seven minutes from time
going on, I think that a three-game
ban is enough.
A draw saved Chelseas blushes
but contributes to a fixture pile-up
that means the replay will not be
held until mid-February, when the
fifth round takes place.
Twice Brentford led their feted
neighbours, first through Marcello
Trotta, who pounced after Ross
Turnbull spilled Harry Forresters
shot. Oscar jabbed a fine leveller
soon after the break before
Forrester converted a penalty, after
Turnbull had brought down Tom
Adeyemi, but Torres curled an
equaliser seven minutes from time.
NDY played well. Novak played
better. Just. The feather and the
blister, which sounds like a
Melbourne pub, may have been
a factor, but equally may not. Without
over-accentuating the positive, Murray
was more at home in a grand slam
final than he has ever appeared and
hell undoubtedly be in a few more as
the years roll by. And we are lucky to
have him.
So lets move on and, in a business
newspaper, lets talk business.
Victoria Azarenka of Belarus won the
ladies singles title in Australia, but
in so doing antagonised the public,
the sports authorities and the
media on a grand slam-winning
scale. Her conduct on court in both
the semi-final and the final left a fair
bit to be desired, but it was what
happened after her triumph that
may have the most long lasting
impact, and tells you all you need to
know about international sport
in 2013.
She walked into the press conference
and placed a can of Red Bull on the
desk in front of her. When asked to
remove it, she refused. Repeatedly.
And those with the power to tell her
to grow up and remove this blatant
piece of ambush marketing of the
event failed to do so. Whereupon she
walked into successive television
interviews, and did exactly the same.
Now this may strike some of you as
funny, but I dont suppose the main
sponsors of the Aussie Open were
amused, and it strikes at the heart of
the financial realities of sport
because these days sponsors make
sport. They fund it and they help
make its biggest stars extremely
wealthy and the rest just about
solvent. When the big fish start
hijacking events for their own
benefit then that model of the
economics of sport is irrevocably
holed below the water line.
For the moment Azarenka must be
laughing. She will probably be fined
a derisory amount by the WTA, but it
will be a drop in the isotonic ocean
compared to what the drinks
company are paying her. Instead of
being banned from the next grand
slam event, which would make both
her and the company think about
the consequences, she will doubtless
indulge in a similarly childish but
personally beneficial display at the
French Open.
But what happened in Melbourne
is important because the reason
there is huge wealth within sport is
that all parties play by the rules.
Spineless governing bodies who
allow their biggest stars to do what
they want, not to mention
irresponsible sponsors who seek to
gain the tiniest advantage over their
competitors, may all too soon realise
that short-term gain for some could
lead, when the big backers leave
town, to long-term misery for a
whole lot more.
SARACENS new ground was not
the only thing getting the thumbs-
up from forwards coach Alex
Sanderson yesterday, who insisted
fit-again full-back Alex Goode
showed just why he could be so
crucial to Englands Six Nations
Sarries began life on their
artificial pitch at Allianz Park with
a 19-11 LV= Cup victory over Cardiff
Blues. Robin Copeland became the
first man to score a try in the new
stadium when he went over for the
Welsh region in the first half, but
James Short replied with a score of
his own after the break and Nils
Mordt kicked the rest of the points
to give the London side the victory.
Sanderson said he felt lucky and
privileged to have a pitch
unaffected by last weeks bad
weather, and backed Goode, on his
comeback from a shoulder injury,
to be ready for Englands clash with
Scotland on Saturday.
We brought him off to save him
because we wanted him to perform
well for England, said Sanderson.
But he showed touches of
brilliance and Im sure he will have
a fantastic Six Nations. Id love to
see him start against Scotland. I see
no reason why not.
Elsewhere on Sunday, London
Irish remained unbeaten in 2013 as
Marland Yarde helped himself to a
hat-trick in a 46-24 win over
Worcester Warriors.
Saturday saw London Wasps fall
to a 34-8 defeat at Leicester Tigers
while Gordon Ross 100th London
Welsh appearance did not go
according to plan as the Exiles lost
23-6 to Harlequins.
The LV= Cup watch the next
generation break through. For tickets and
info, visit www.lv.com/rugby
Ninety per cent of players will have played
this tournament with a blister or problem. It
had no bearing on the result

Goode hands England lift as
Saracens christen new home
ENGLAND captain Alastair Cook
says his one-day side will learn
important lessons from their 3-2
defeat in India, as the batsman
prepares to lead his team on their
next tour to New Zealand.
A superb knock of 113 not out
from Ian Bell gave England a seven-
wicket win in Dharamsala
yesterday, but the match was a dead
rubber, with the tourists already
3-1 down in the ODI series.
I thought the way we learnt
throughout this tour showed quite
nicely in that game, Cook said.
We bowled better. Conditions
were more in our favour, but we
used that and put the ball in
challenging areas, and when you
get the opposition 50-4 you put
yourselves in a very strong place.
In a couple of those games we
didnt play as well as we could have
done but weve learned a lot about
certain players.
Tim Bresnan took four wickets as
India were bowled out for 226 runs
in the Himalaya-side ground. Cook
was then dismissed in the 12th over
when Ishant Sharma sent through
a cutting ball that split his stumps,
yet fellow opener Bell went on to
score the first century of the series.
Kevin Pietersen was out for just
six runs, yet youngster Joe Root and
Eoin Morgan chipped in with 71
runs, to help England reach 227
with nearly three overs, and seven
wickets, to spare.
The performance would have
held some cheer for incoming
batting coach Graham Thorpe. The
former Surrey star will replace
Graham Gooch in coaching the ODI
and Twenty20 sides for the tour of
New Zealand, starting 4 February.
Gooch will continue to coach
batting for Englands Test side.
Cook promises to learn lessons
ahead of trip to New Zealand
Ban Azarenka for her irresponsible ambush marketing
Hurricane Fly hat-trick in Dublin
nHORSE RACING: Hurricane Fly
recorded a hat-trick of Irish Champion
Hurdle victories at Leopardstown
yesterday, boosting hopes that the
nine year-old can win the Champion
Hurdle at Cheltenham on 12 March.
England call up Six Nations cover
nRUGBY: Sale prop Henry Thomas
and Harlequins wing Ugo Monye have
been called up to train with the
England squad following knee injuries
to Alex Corbisiero and Freddie Burns.
Corbisiero and Burns are set to miss at
least the first two matches of the Six
Nations, against Scotland and Ireland.
First European Tour win for Wood
nGOLF: Englands Chris Wood won
his first European Tour title at this
weekends Qatar Masters, beating
George Coetzee by one stroke.
Theres an enormous weight lifted off
my shoulders, Wood said. I feel like
I can go on and win more.
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BRITAINS Andy Murray insisted los-
ing a grand slam final had never felt
so good after narrowly failing to
make history in a titanic climax to
the Australian Open yesterday.
World No1 Novak Djokovic fought
back from a set down to beat Murray
6-7 (2-7), 7-6 (7-3,) 6-3, 6-2 and become
the first man in 46 years to win three
consecutive titles in Melbourne.
Murray had been bidding to follow
his maiden grand slam title, claimed
at last years US Open, with victory in
his next a feat yet to be achieved in
the Open Era but instead slipped to
his fifth slam final defeat.
However he drew solace from
going so close, ending second seed
Murray cheered
by form despite
Djokovic triumph
Roger Federers hold over him in
Majors, and the progress he has made
over a landmark six months, in
which he has, he says, played the
best tennis of my life.
I made the Wimbledon final, won
the Olympics, won the US Open, I was
close here as well. It was close, added
Murray, who failed to take three
break points early in the second set.
I know no ones ever won a slam,
the immediate one after winning
their first one. Its not the easiest
thing to do and I got extremely close.
So I have to try and look at the posi-
tives of the last few months, and I
think Im going the right direction.
Murray increasingly struggled to
give chase in some epic baseline ral-
lies as the match reached its fourth
hour, but he refused to blame a blis-
ter on his big toe that required treat-
ment after the second set.
You get them. It happens. It was
just a bit sore when I was running
around, he said.
Its not like pulling a calf muscle
or something. It just hurts when you
run, but its not something that stops
you from playing.
Ninety per cent of the players on
tour will have played this tourna-
ment with some sort of blister or
problem. It had no bearing on the
The Scot also chose not to dwell on
a bizarre incident in the second set
tie-break, when a falling bird feather
caught his eye as prepared for his sec-
ond serve at 2-2. He stopped, gathered
himself, and double faulted.
I couldve served, he said. It
caught my eye. I thought it was a good
idea to move it. Maybe it wasnt.
Djokovic became the first Open Era man to win three consecutive Australian Opens