Capital gain: how London is thriving as it takes on the global competition
There is a certain swagger about the City of London these days - a self-confidence born of success. It has strengthened its position as Europe's leading financial centre and is a magnet for capital and talent from around the world.
The swagger of this "New City" is manifest in the changing skyline - be it the bulbous effrontery of the Swiss Re building known colloquially as the Gherkin or the cluster of big banking towers at Canary Wharf to the east.
It is reflected in the way the City has grown geographically, with private-equity houses, hedge funds and advisory boutiques gravitating to London's West End and large investment and integrated banks going eastwards to the capital's revitalised Docklands. "The City today is more a state of mind than a square mile of central London," says one senior fund manager.
And the swagger is visible in the people. Take Clara Furse, chief executive of the London Stock Exchange. Appointed five years ago to head a fractious organisation with a history of bungled modernisation initiatives, she got off to a hesitant start. But with equities trading booming, and having seen off three potential bids in the past year, Ms Furse and the LSE now radiate self-confidence. The latest bid approach, from Nasdaq of the US, serves to underline the value of the institution.
So what makes the New City successful, who makes it tick and where, for better or worse, is it heading?
For a start, there is a consciousness that London can hardly afford to be smug or complacent. Gordon Brown, the UK's chancellor of the exchequer (finance minister), appeared to recognise this last week when he announced an initiative to bolster its position as a financial centre. Competition never ends - and the City of London still bears scars from the loss of a key European government bond futures contract to Germany in the late 1990s. We may also be close to the peak of a credit cycle, awash with cheap capital. Who knows what wreckage the ebbing tide will reveal?
All that said, London's current bullishness stands in stark contrast to the mood ahead of the millennium. At that time there were plenty of pundits warning that the introduction of the euro could help Paris and Frankfurt - ambitious for their financial services sectors - capture substantial business from London.
In fact, the trend has been in the other direction and the City has also closed the gap with Wall Street. "London is no longer the second city," says James Cayne, chairman of Bear Stearns, the US investment bank. "Right now it is as fast as New York."
London, of course, has long been Europe's leading financial centre. But its market share in many of the disciplines where it has traditionally led the region has been on the rise or stable over the past five years, while it has captured a large share of some of the most important new opportunities. It now accounts for 20 per cent of cross-border bank lending, up from 16 per cent in 1992, while its share of foreign exchange turnover has risen from 27 per cent to 31 per cent over the same period. It accounts for 70 per cent of the secondary market in international bonds. Half of European investment banking activity is thought to be conducted through London.
Its share of derivatives traded on exchanges may have fallen over the past decade but London has reinforced its position as the leading centre for bespoke, over-the-counter products. It is thought to account for roughly 45 per cent of the fast-growing market in credit derivatives.
London has long been the leading centre for international fund management, though the industry's traditional focus on relative rather than absolute returns and its high charges for retail investors have smacked of complacency and created scope for a new breed of absolute-return investors. Yet here, too, London dominates Europe: More than three-quarters of the region's hedge-fund assets are managed out of London, as are nearly 50 per cent of private-equity assets.
In quoted equities, the LSE has become Europe's leading exchange for emerging-market listings, while its junior Aim market has become the region's most successful source of capital for small companies.
More generally, London's pull means that an increasing number of continental financial services operations are choosing to base themselves in the City. They range in size from Deutsche Bank, Germany's largest private-sector bank, which is now run largely from London, to the likes of a private wealth management company with predominantly German clients who enjoy the opportunity to visit London.
The UK's long tradition of laisser-faire capitalism and openness to competition have created an environment in which financial creativity can flourish. In the 20 years since London's financial markets were deregulated in the so-called Big Bang, the make-up and ownership of the City's investment banks and broking houses has changed out of all recognition.
The first decade was characterised by the growing dominance of large, integrated American houses. The past few years have seen the emergence of a more mixed ecology. UK-owned broking houses have sprung up to serve small and mid-sized companies that are off the radar of the biggest banks. Banking advisory boutiques are being set up to meet clients' demands for a more personal service, free of potential conflicts of interest.
Decent regulation has also been crucial to London's success, be it self-regulation - as with the Takeover Panel, probably the world's best referee of bids - or state-imposed rules. Over the past few years the City of London has undergone a change of regulatory framework with the creation of the Financial Services Authority - a single, statutory institution replacing 10 self-regulatory bodies. London is the only big financial centre to have a single regulator with such concentrated powers - and a heavy-handed FSA could have damaged London's creativity and competitiveness. Instead, despite grumbling about its bureaucracy (some of it justified), the FSA is regarded as having struck a reasonable balance and to be growing better at doing so. This matters in a world where strong but measured regulation, offering investor protection, is a source of competitive strength rather than weakness.
These fundamental factors - good regulation and a pro-competition orientation - have created the basis for a concentration of market liquidity and financial expertise. And once a centre captures these attributes, they tend to be self-reinforcing - in the absence of crass political interference - and create a strong client base for the sophisticated international financial consultancy sector that is another strength.
London has certainly benefited from others' mistakes. For example, America's Sarbanes-Oxley legislation has created a governance framework that discourages foreign companies from raising capital in the US. A heavy-handed response to the 9/11 terrorist attacks, including the recent row over a Dubai company acquiring US container terminals, may have made the US less attractive for Middle Eastern funds. And the collapse of Germany's poorly regulated Neuer Markt eliminated a potential competitor to Aim.
London also has softer attractions. It is an agreeable place to live (despite high property prices and poor transport) and its increasingly cosmopolitan atmosphere is matched only by New York. Its tax regime has also been benign to foreign nationals.
Employment regulations have also helped, allowing talent to be imported. Indeed, one of the most remarkable changes has been the broadening of the talent pool (see below). Two decades ago investment bankers and fund managers would work surrounded by people like themselves - notably Oxford or Cambridge arts graduates - but now they are just as likely to be seated next to a mathematics wizard from Azerbaijan. This creates another virtuous circle - the better the international talent in the City, the more it increases London's competitive advantage and the greater the advantage, the more it attracts fresh talent.
Technology has also played a vital role. Most obviously, new computer systems have allowed London's equity and derivatives exchanges to remain competitive. Technology has also democratised markets. Relatively cheap access to data means you no longer have to work for a large institution to make your mark. Set up a hedge fund and investment banks will provide you with leverage, stock lending, trade processing and investment ideas.
And for the successful operator the rewards can be large. The three founders of NewFinance Capital, a fund of hedge funds set up in 2003, will share at least ￡49m ($85m, �71m) following last month's purchase of the business by Schroders, the fund manager.
The democratic dynamic is still working its way through the system. It means the fund management clients of investment banks are becoming far more diverse and fragmented; it means traditional fund managers are having to reinvent themselves with the mentality of boutiques; and it means capital can be allocated with far greater speed and flexibility - posing new challenges to companies (and their brokers) when the investor base can change with disturbing rapidity. Hedge funds may still be small relative to the overall size of the investing market but they wield clout because they are active traders - accounting for up to 40 per cent of daily trading on the LSE.
Against this background, London's flexibility and openness should allow it further to consolidate its leadership of Europe over the next few years - if the regulatory, tax and employment frameworks remain benign.
Success in financial services has always depended on creativity. This quality enabled Siegmund Warburg, a German outsider, to overturn the complacent assumptions of the City establishment in the 1950s and 1960s. But it has never been more important than now, when the industry is changing so rapidly. In the New City, only the innovative prosper.
金融城要“过”华尔街
如今，伦敦金融城确实有些牛气――这源于成功的自信。这种牛气增强了它作为欧洲领先金融中心的地位，也是吸引全球各地资本和人才的磁石。
这座“新城”的牛气明显反映在日新月异的天际线上――无论是绰号“小黄瓜”、风格张扬的瑞士再保险(Swiss Re)大厦，还是东区金丝雀码头(Canary Wharf)鳞次栉比的银行大厦。
“伦敦金融城”更多地是指一种心态
它反映了伦敦金融城地理范围的扩大，私人股本公司、对冲基金和咨询公司集中于伦敦西区，而大型投资和综合银行都涌向东面恢复了活力的伦敦码头区(Docklands)。“如今，‘伦敦金融城’更多地是指一种心态，而不仅是伦敦市中心那一平方英里，”一位资深基金经理人表示。
这种牛气也反映在人的身上，比如伦敦证交所(LSE)首席执行官克拉拉?弗斯(Clara Furse)。她于5年前接受任命，领导这个不听指挥的机构。历史上，伦敦证交所陆续出台过多个现代化方案，但都办砸了。弗斯女士一开始进行得磕磕碰碰，但随着伦敦证交所股票交易蒸蒸日上，并于去年挫败了3次潜在竞购，弗斯女士和伦敦证交所现在洋溢着自信。来自美国纳斯达克(Nasdaq)的最新竞购提议，突显该机构的价值。
那么，是什么让“金融新城”(New City)获得成功，谁指引着它，它又将何去何从(无论好坏)？
首先，这里的人都明白，伦敦不能沾沾自喜、骄傲自满，它付不起这个代价。英国财政大臣戈登?布朗(Gordon Brown)上周似乎承认这一点，当时他宣布了一项巩固伦敦金融中心地位的方案。竞争永远不会休止，而且伦敦金融城有一个伤口至今未愈――90年代末，它在关键的欧洲国债期货合同上输给了德国。再说，目前市场充斥着廉价资本，我们可能接近信贷周期的高峰。谁知道退潮时会留下什么样的残骸呢？
尽管如此，伦敦目前的牛气与90年代末期的状态截然相反。当时，许多权威人士警告说，欧元的问世可能会帮助巴黎和法兰克福从伦敦手中夺取大量业务，这两个城市都有发展金融服务业的雄心壮志。
“伦敦正与纽约齐头并进”
事实上，趋势一直在向相反方向发展，伦敦金融城还缩小了与华尔街的差距。“伦敦不再是第二城，”美国投资银行贝尔斯登(Bear Stearns)董事长詹姆斯?凯恩(James Cayne)表示。“现在伦敦与纽约齐头并进。”
当然，伦敦长期以来一直是欧洲领先的金融中心。然而过去5年里，在伦敦传统上领先的许多领域，其市场份额一直在上升或保持稳定，而在某些最重要的新机遇方面，它也夺取了很大份额。现在，伦敦占跨境银行信贷的市场份额从1992年的16%上升到了20%。同期的外汇市场交投总额份额从27%升至31%。伦敦在国际债券二级市场的份额达70%。据悉，欧洲半数的投资银行活动都是通过伦敦进行的。
近10年来，伦敦在交易所场内交易衍生品份额方面可能有所下降，但它加强了自己作为定制、场外交易产品领先中心的地位。据悉，在迅速增长的信贷衍生品市场，伦敦所占的份额约为45%。
长久以来，伦敦一直是领先的国际基金管理中心，但这一行业传统上关注相对回报而非绝对回报，对零售投资者的收费高昂，因此伦敦在这方面带有自满的味道，这为新一代的绝对回报投资者创造了空间。然而就在这一领域，伦敦还是占据着欧洲的主导地位：欧洲超过四分之三的对冲基金资产都在伦敦进行管理，私人股本资产则有将近50%在伦敦管理。
在上市股票领域，伦敦证交所成了新兴市场在欧洲上市的首选交易所，其较小的另类投资市场(Aim)则成了该地区小企业最成功的资本来源。
更广泛地说，伦敦的吸引力意味着，欧洲大陆越来越多的金融服务业务都选择常驻伦敦金融城。它们规模不一，既有德国最大的私营银行德意志银行(Deutsche Bank)，该银行目前主要在伦敦运营，也有像私人理财公司这样的企业，后者的客户大多是德国人，他们喜欢有机会到访伦敦。
开放竞争的传统
英国悠久的自由资本主义传统以及开放竞争的做法，创造了金融创新得以繁荣兴旺的环境。伦敦各金融市场通过“金融大改革”(Big Bang)中解除了管制，此后20年间，伦敦金融城投资银行和经纪公司的构成和所有权发生了翻天覆地的变化。
最初10年的特点是，大型综合美国经纪公司的主导地位不断加强。而近几年里，更复杂的“生态系统”形成了。英国经纪公司冒了出来，为那些不被大银行关注的中小企业提供服务。银行业顾问机构应运而生，以满足客户对个性化程度更高服务的需求，摆脱了潜在的利益冲突。
恰当的监管对伦敦的成功也至关重要，无论是自我监管还是国家强制的法规。前者如收购委员会(Takeover Panel)，它很可能是世界上最好的竞标仲裁机构。过去几年里，伦敦金融城经历了监管框架的变革，成立了单一的法定机构“英国金融服务管理局”(Financial Services Authority, FSA)，以取代10个自我监管的机构。伦敦是唯一拥有权力如此集中的单一监管机构的大型金融中心。如果英国金融服务管理局(FSA)监管粗率，可能已破坏了伦敦的创造力和竞争力。但恰恰相反，尽管各方抱怨FSA的官僚作风(其中有些是合理的)，但人们还是认为它达到了一种合适的平衡，并越来越擅长此道。这一点关系重大，因为在当前的世界上，既强有力又适度的监管是竞争优势而非劣势的来源，为投资者提供了保护。
良好的监管和有利于竞争的姿态这两个基本因素，为市场流动性和金融诀窍的汇聚创造了基础。一旦一个金融中心具备了这些特点，在没有粗鲁的政治干涉的情况下，它们趋向于自我加强，并为复杂的国际金融咨询业创造出一个强大的客户基础。该行业是伦敦金融城的又一个优势。
当然，伦敦也受益于其它金融中心的失误。例如，美国的《萨班斯-奥克斯利法》(Sarbanes-Oxley)创造了一个吓阻外国公司到美国融资的治理框架。美国对“9/11”恐怖袭击采取了粗率的应对措施，包括最近围绕一家迪拜公司收购数个美国集装箱码头的争议。这些措施可能令美国对中东资金的吸引力下降。而监管不善的德国“新市场”(Neuer Markt)的崩溃，则消除了另类投资市场(Aim)的一个潜在竞争对手。
伦敦在软件方面也有吸引力。这是个适合居住的地方(尽管地产价格高且交通糟糕)，越来越具有全球都市的氛围，这些只有纽约能媲美。对于外国人来说，伦敦的税收制度也不太严厉。
就业法规的优势
就业法规也有助于人才流入。实际上，最显著的变化之一是人才群体的扩充。20年前，与投资银行家和基金经理人一起工作的，可能是与他们自己相似的人，即牛津大学(Oxford)和剑桥大学(Cambridge)的文科毕业生，但现在他们旁边坐的有可能是阿塞拜疆的数学奇才。这形成了另一个良性循环：金融城里的国际人才越优秀，伦敦竞争优势就越强；优势越强，吸引的新鲜人才就越多。
技术也起了重大作用。最明显的是，新电脑系统让伦敦股票和衍生品交易始终保持竞争力。技术也让市场民主化。现在用相对低成本就能获得数据，这意味着，若你想做出业绩，再也不必为某家大机构工作。如果成立一家对冲基金，投资银行将为你提供融资杠杆、股票借出、交易处理和投资建议。
成功经营者的回报可能是巨大的。NewFinance Capital是成立于2003年的一家对冲基金的基金(fund of hedge funds)，上月基金管理公司施罗德(Schroders)收购了其业务，该基金的三位创始人将分享至少4900万英镑(合8500万美元)。
民主的活力仍在这一制度发挥着作用。它意味着投资银行的基金管理客户变得远比以前多样和分散；它意味着传统的基金管理公司现在不得不用“精品店”的思维改造自我；它意味着能用更快速和灵活的方式来配置资金，在当前这种投资者基础能够以令人不安的速度变化的情况下，这对公司(和它们的经纪商)构成了新的挑战。相对于投资市场总体规模而言，对冲基金的规模或许仍不大，但它们举足轻重，因为它们是活跃的交易商，占伦敦证券交易所日交易量的比重高达40%。
在这种背景下，如果监管、税收和就业框架保持良好，那么灵活性和公开性应该会让伦敦在未来几年巩固在欧洲的领导地位。
古往今来，金融服务业的成功始终依赖创造力。这一特点让来自德国的外乡人西格蒙德?华宝(Siegmund Warburg)在20世纪50和60年代颠覆了伦敦金融城的骄傲自大。但如今金融服务业的变化如此迅速，创造力从来没有像现在这样重要。在伦敦金融新城里，只有创新者才能兴旺发达。
