The chances are that Sajid Javid, the newly-installed communities secretary in prime minister Theresa May’s cabinet, didn’t go into politics for the money.
The former Deutsche Bank investment banker spent 20 years working across London, New York and Singapore. When he left, he was a ‘senior managing director’ earning a reported £3.4m a year. Now, he’s supposedly on a £67k MP salary.
Former colleagues described him as “off the charts good” or “very, very clever” and “like a priest in a suit…disciplined as they come”. After such a lustrous banking career, Javid has, not surprisingly, stuck up for the City during his time in politics.
But Javid is not the only former City worker in the new look cabinet. Amber Rudd, the new home secretary, worked for J.P. Morgan’s IBD business in the mid-1980s. After a stint as a headhunter and financial journalist, she got into politics to “take my life back”. She doesn’t look back fondly.
In fact, she claims to have been been handed a bag of explicit videos by her boss during as part of her “training programme”.
“It was a long time ago and I sort of laughed it off. Now you’d retire, or of course you’d sue,” she said.
Then there’s Andrea Leadsom. Fresh from her CV-gate, mother-gate and pulling-out-of-the-leadership-race-gate. She’s been given the role of environment secretary – something of a hospital pass by all accounts.
Leadsom, of course, didn’t have as illustrious a City career as she’d have you believe, and has taken the opportunity to exact some revenge on her former vocation.
Leadsom took great glee in tearing into her former boss, Bob Diamond, during the Libor enquiry and has was an outspoken critic of high pay in the City.
Regardless, she’s remained in the cabinet but been shifted down the ranks. New chancellor, Phillip Hammond, has already stated that he intends to prioritise London’s access to the single market.
“We need to ensure access to the EU single market for our financial services industry in London,” he said.
Maybe this won't be such a hard sell. There’s a “growing acknowledgement on both sides of the Channel” that London will remain dominant in financial services, says WSJ’s Simon Nixon writing in Financial News. “Even if the EU denies UK-based firms passporting rights or refuses to allow them to clear euro-denominated trades, the loss of business and jobs to the EU will be small,” he says.
Separately, star fund managers do indeed exist. On average, funds run by a single manager outperform team-run funds by 1.3%, according to academic research cited in the Financial Times.
“Our research supports the idea that star managers exist,” says Thomas (Xiyu) Zhou, professor of business administration at the University of Alaska and one of the authors of the study. “Investors will be better off if they invest in a fund with just one manager.”
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