Bunhill: The short fuse under Warburg
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Your support makes all the difference.NICE to see that the mighty house of SG Warburg, Britain's top investment bank, was built not on enlightened management techniques but on temper tantrums, monster sulks, silly prejudices and vanity.
I'm exaggerating only a little, if Ron Chernow's scholarly and intensively researched door-stopper The Warburgs, due to be published next month by Chatto and Windus, is to be believed.
Siegmund Warburg, the German Jewish refugee who more than anyone restored London's reputation as an international financial centre in the Sixties and Seventies, is painted as a brooding tyrant.
His explosions were legendary. 'We're not a second-rate firm,' he once thundered after discovering some error. 'We're not a third-rate firm. We're a tenth-rate firm.'
He would fling telephones across the room, sometimes literally foaming at the mouth in fury. He considered most people fools, according to his closest mentor.
He hated sport and believed anyone who skied had an inferiority complex - a prejudice that led his wary employees to invent other reasons for their winter breaks.
Conservative and puritanical in dress and habits, Siegmund went cool on a deal with an American chief executive after spotting his monogrammed cufflinks, which he considered to be an appalling example of nouveau riche vanity.
He was not without pride himself. He would not allow himself to be photographed in swimming trunks for fear the pictures could fall into the wrong hands and destroy his image.
In the 1940s he had an affair with the Russian ballerina Alexandra Danilova (a beauty whose legs were insured for dollars 500,000). And he could not understand why his long-suffering wife Eva could be lonely in their isolated house when she had the 20-volume works of Freud for company.
His instincts were often right. After a disastrous lunch with Robert Maxwell, he barred the bank from doing business with him. Maxwell, he said, was a Jew who pretended not to be, and who exploited Jews.
Luck played a part. He wanted to give the fund management side (now called Mercury Asset Management, with pounds 40bn under management) to Robert Fleming. But fortunately Flemings declined it, unable to comprehend that he wanted to give it to them gratis.
He was arguably the greatest banker of the post-war years, yet he had no feel for markets and was a lousy share picker, each year recommending the same stock, Shell Oil, at the annual investment meeting.
He was fond of aphorisms and quotations. He once defined banking as 'organised gossip'. Another time he said gossip compensated for sexual inadequacy. Two interesting views, when combined.
He abhorred diminutives, especially his own shortened name of 'Siggy'. And, showing sturdy good sense, he was suspicious of anybody who began his remarks with 'Frankly'.
(Photograph omitted)
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