View all newsletters
Have the short, sharp Spear's newsletter delivered to your inbox each week
  1. Wealth
  2. Column
March 25, 2010

Hedgehog Issue 15

By Spear's

From riffling through Ruffer’s prose to ordering your private jet through your iPhone, Hedgehog covers it all.

Underwriting is something insurers do, not Jonathan Ruffer: no one could accuse the legendary investment manager of underplaying his metaphors.

As his clients who receive his quarterly newsletter or anyone who has read his new book, Babel: The breaking of the banks (it’s the collected newsletters, 1998–2009), can tell you, there is scarcely a page whose wisdom is not enlivened by some vivid picture-painting, historical parallel or sharp observation: ‘The relationships [within the structured product market] are as close-knit and complicated as the royal families of 19th-century Europe; subprime is its haemophilia’…‘I’ve always regarded the French as being basically untrustworthy because they use the same word for “straight on” as “turn right”’…‘Pre-war monetary transmission was very much of the Austin Seven variety: simple but effective.’

With his typical self-deprecation Ruffer says that his use of metaphors is as much to help him as it is to make things clear to his clients: ‘When I can’t understand something, which is most of the time, I search for a metaphor.’ The story of Jonathan Backhouse’s row with the Duke of Cleveland (it involves a five-pound-note tearing contest) illustrates the strength of central banks.

What makes Ruffer’s newsletters more than just stylistically diverting is the fact that they lay out the bearish strategy which has made him such a success over the past fifteen years, particularly through the recession. In among the references to Danegeld and Gettysburg are the insights which have kept Ruffer’s clients in the black, and so far from vanity publishing (Ruffer is possibly the most modest man in the City), Babel is a valuable chronicle.

How many philanthropists does it take to change a light bulb? None: they just fund a project helping disadvantaged youth to learn a skill and wait in the dark till they can do it.

There was plenty of light at the party that Caroline Garnham, Spear’s legal columnist and the founder of Family Bhive, a social network for high-net-worths, held to discuss the future of philanthropy. Family Bhive’s recent survey found that philanthropy is the number-one concern of young HNWs; hence the party, bringing together the worlds of philanthropy and finance.

Michael Green, the co-author of the Spear’s-nominated book Philanthrocapitalism, gave a brief speech about how a relief trip to Romania after the fall of communism changed his ideas about philanthropy. In an interview after his speech, Michael (who has a new book on the crisis in capitalism out later this year) was frank about the failure of the government’s efforts to help society.

Content from our partners
Stoneweg, Icona, and CBH Strengthen Partnership with Cromwell Acquisition, Adding €4 Billion AUM to Stoneweg
Why investors should consider investing in nature
HSBC Global Private Banking: Revisiting your wealth plan as uncertainty abounds

‘The idea that the government could solve social problems was false, and now they haven’t even got any money,’ he said, adding that it was equally clear that ‘market idolatry’ had been shown as empty: ‘Short-term profits aren’t good business. Now they have to think about long-term value.’

The happy medium was targeted corporate and private philanthropy, he said: ‘KKR [the private equity firm], who were once the barbarians at the gate, now have an alliance with the Environmental Defense Fund — they’ve taken a very strong position.’ He conceded that there was still a lot of window-dressing, but said business and charity needn’t conflict: ‘There’s a whole space in the middle between making money and doing good.’

And with that, someone else approached to ask him to sign a copy of Philanthrocapitalism, like a rock star of the world of giving with another adoring fan.

Philanthrocapitalism by Matthew Bishop and Michael Green is available in the Spear’s/Amazon bookstore

How much does your private banker know? Less than you might think…

When a senior banker calls for all those in his industry to take a ‘Hippocratic oath’ (his words) or face obsolescence, even the dullest can tell that significant change is in the air. So when Robert Taylor, CEO of Kleinwort Benson Private Bank, told a conference that ‘as long as there’s nothing that binds us as an industry, our clients are going to take a long time to trust us again after 2008,’ ears pricked up and pencils scratched.

‘No one who uses the term “private banker” is actually a private banker — they have investment management qualifications, IMD certificates, financial planning certificates. But we haven’t designed a standard set of qualifications for what a private banker is. We don’t use the same language to talk about things. We need to professionalise that.’ A code of conduct was also needed, he said.

Taylor has had a busy year: when Dresdner was forced to sell Kleinwort, which it had only recently acquired, Taylor put together a bid — the best thing his management team had ever done, he said: ‘If you want to understand the health of your business, try and buy it.’

My accountant said, ‘It’s fine, just relax
    and ride the storm,
but perhaps you might consider a year
    off from Glyndebourne.’

Those jaunty, jazzy lyrics are a product of the crunch — or rather ‘Crunch!’, a song by Kiss & Tell Cabaret, purveyors of swinging satire to the sophisticated classes. Their singer and co-lyricist is Melinda Hughes, an opera singer; Hughes, Jeremy Limb and Lloyd Evans compose satirical songs for private parties on pretty much any theme you can imagine: the pomposity of contemporary artists or an heiress who can’t get a grip on recycling.

These songs have appealed to the hosts of the many parties they have performed at: from Theo Fennell and Michael Portillo to the Royal Institute of British Architects, Kiss & Tell have graced the grandest gatherings. Drawing on a repertoire of their own songs and those of Kurt Weill and Mischa Spoliansky from the 1930s — just as crunched a time as today — Kiss & Tell take a sideways glance at our foibles with a cabaret-sound kicker.

When Melinda first started out with Kiss & Tell, her partner in rhyme was Petronella Wyatt, who performed the song The It-Girl’s Lament, which featured the refrain ‘Why can’t I find me a man?’ Not, evidently, drawn from life.

Melinda, who has sung Madama Butterfly at Loughborough Opera and given concerts everywhere from the Queen Elizabeth Hall to the Al-Bustan Festival in Beirut, also knows the opera world intimately, which allows her a sideline in arranging operatic galas. If that soprano you like is in town, she’ll know about it.

Time to start thinking about just what you would (and wouldn’t) like included in that special song you’ll commission for your anniversary…

As the presiding wisdom of the age declares, if it can be done, it can be done with an iPhone app, and now that includes booking your private jet. If you download the app — for free, no less — you can enter your departure and arrival cities, choose your dates and then pick your plane size. With one click, an email is sent to 2,700 private jet operators and all you have to do is wait for the quotes to come flooding in.

Isn’t that a really good way to wind up the companies by submitting requests you know you’ll never need? According to Carol Cork, sales and marketing director of Private Fly, they have had ‘some time-wasters in the pub’, but equally, since the app launched in January, some good feedback from PAs under instruction. On popular European routes you can get quotes in minutes and you can book for the same day, so you can go from iPhone to iRome in a matter of hours.

Hedgehog’s proverb for today: ‘There is no app which can replace the human heart. Oh, yes there is.’

Uch, bookbinding. It’s all hideous marbled covers and yellowing pages and stumpy spines, isn’t it? Well, for centuries you would have been correct, but now Prometheus Bound Books is making binding beautiful. And not just beautiful, but personal.

You can pick a pre-bound book — Pride and Prejudice in pink leather (natch) or Shakespeare’s Sonnets in orange lizard — for immediate delivery, or choose a title from 700 (ranging from Anna Karenina and the Bible to Gormenghast and LA Confidential) to create a custom-made one.

Then you choose your binding. The varied textures, materials and colours on offer could lead to sensory overload: leather (in nine colours), patent leather, traditional moiré (which can have a leather spine), waxed cotton, oil cloth, a check cotton, and even pinstripe wool for the irredeemable businessman. The binding is done in Wiltshire, Oxford or London, depending on the material used.

You can have initials embossed on the front, or even longer messages on the front or back, and within two to three weeks it’s yours.

Prometheus Bound was set up by Marie Stevens, a former Slaughter & May lawyer, and Sue Williams. They have been friends for 30 years and have always had a passion for books and reading. ‘We were looking for a new project,’ Marie says. ‘We thought bookbinding was the most wonderful craft, but rather old in style, older colour and over-fancy.’

This is (finally) a contemporary approach to bookbinding. Selling for between £85 and £125, one of their books makes an enduring gift, both within the pages and without.

When he puts down the plectrum, he picks up the paintbrush. Bob Dylan, not known as a visual artist for the greater part of his five-decade-long career, has in the past couple of years revealed his skills as a draughtsman and a painter. Whereas before ‘collecting Dylan’ meant ticket stubs from Newport to New York, now he is owned all over the world by private individuals.

These paintings are not the residue of a life lived hard, nor are they as full of the — let’s call it — beau monde as Ronnie Wood’s, also a rocker by day, painter by night. Instead, they are in the bright, swift, colourful tradition of Matisse and Gauguin, yet draw on lonely scenes and childhood memories. Train Tracks I recedes into purple hills under a broad-brushed blue-grey sky, some wind-ruffled foliage off to the side and no evidence of life.

There are plenty of references — conscious or not — to the masters of art history, with recumbent women and sunflowers in several scenes, but equally Dylan tackles the eternal American rural scene (Dad’s Restaurant, with a pick-up truck in front of a diner, for example).

The home of Dylan’s drawings and now his paintings (the show runs to 10 April) is the Halcyon Gallery on Bruton St, a Georgian building opened up to the bright February light. Paul Green, president of the gallery, says Dylan the painter was a pleasant discovery: ‘I’m used to artists being multifaceted and multitalented, but I was surprised just how good Dylan is.’

‘When reading his biography,’ says Green, ‘his recollection of individual places and objects is so astonishing, and the way he puts it is so poetic, that when you look at the paintings of train tracks you can hear where he was brought up.’
The paintings at Halcyon are certainly evocative of exactly that and make you realise that while Dylan may bare his soul on vinyl, he has a lot to say on canvas too.

Halcyon Gallery
Bruton Street, W1

The Doomsday Clock is set by scientists according to how close they think we are to a nuclear holocaust: the closer to disaster, the nearer to midnight. This clock, which is currently at 11.54pm (don’t worry: in 1953 it was at 11.58), has nothing on Stephen Hill, Spear’s economics editor.

Stephen — as anyone who has read his Spear’s articles, blogs and leaders (filled with foresight and vivid extended metaphors) will know — called the credit crunch a year before most people. His prescience put Spear’s ahead of the game and now this wisdom can be found in book form. Countdown to Catastrophe is a who, what, why, where, when and how of the credit crisis, its origins, its course and — more importantly — its future. (Read an extract from Countdown to Catastrophe here.)

Launched to a room full of senior bankers and economists at Boodle’s (whose founder and presiding deity is Stephen’s hero, Adam Smith), Countdown to Catastrophe takes as its thesis the idea that the economy works in short cycles of nine years and long cycles of 90(ish) years, and that when these interact, their troughs occurring simultaneously — well, let’s say certain economists are very worried. By Stephen’s forecast, we’re entering a dangerous decade, where bank meltdowns are just the start.

But happily he proposes solutions, too. Since the failure of regulation has allowed governments, banks and other financial companies to run riot, we need a return to regulation, but at the highest level of central banks and governments rather than with bodies like the SEC and FSA. There is even a special guest star: the aforementioned Adam Smith, whom Stephen resurrects for a dialogue on the financial crisis. This is one catastrophe not to be avoided.

You can order your copy of Countdown to Catastrophe for £20 + P&P from

Sometimes browsing a shop is the most fun: an aimless perambulation where random items take your fancy. This is all the truer at Harrods, where each department offers up its own treasures for your fascination. But sometimes what you need is direction, or what you lack is time, or what you want is expertise and undivided personal attention.

That’s where Harrods BY APPOINTMENT Beyond comes in. Seated in a scarlet-clad room on the lower ground floor, just opposite the Tom Ford store, Spear’s saw our wish-list fulfilled by Amina and her assistants.

A Tom Ford suit was hung up, ready to try on, after a vague request for ‘a suit, something nice’, and three leather satchels — including a seductive indigo crocodile-leather one by Louis Vuitton — waited on a chair. The Gucci tuxedo jacket which we had just admired en route to the BY APPOINTMENT Suite was waiting — correct size and all.

Now imagine that you are not just buying one outfit but your entire wardrobe for a season: they do that, too, and with ease, while you sip sparkling water and order food down from one of the Harrods restaurants.

These suites are soon to be much expanded, says Sian Parry-Jones, the head of personal shopping at Harrods: ‘We’re now going to be opening 5,000 square feet of VIP area — we’ve got another eight rooms opening here, as well as an area that will suit 120 people for a lunch or dinner. It’s going to be a flexible space, where if we wanted to have a lunch during London Fashion Week hosted by one of the key designers, we could.’

Sian points out that they can go beyond regular requests: ‘The personal shopper would be asked, “I need to go to this restaurant tonight”; “I want to stay at this hotel”; “We’re flying in over the next day, can you arrange a car?”’ So Harrods responded with the ‘Beyond’ part of BY APPOINTMENT & Beyond. It’s not a concierge service — ‘I would like to call it 360 degrees of shopping,’ says Sian.

From private parties with Giorgio Locatelli and the family from the Middle East who wanted to go to boot camp to exclusive World Cup packages for this summer and the complete furnishing of a new house in Scotland, Beyond can see those dreams of yours and raise them.

You may often hear that you look like a million dollars (at least, I hope you do), but you rarely hear that something sounds like a million dollars. That may be about to change with Aesthesis’s Gramophone Speakers — not least because they cost £54,500 and there will only be 100 pairs in existence.

The speakers, tall, lithe and black, culminating in a refined horn inspired by that most antique of musical systems, look too elegant to be as technologically refined as they are. But talking to Bjorn Gunnarsson, owner of Swedish company Aesthesis (which commissioned the concept), it becomes clear that the speakers are being rather coy about their complexity: ‘No one has ever combined these four elements in one speaker before: the base reflex; a full-range element; horn loading; and tube loading.’

The full-range element in particular is vital: it prevents phase anomalies by ensuring all parts of the sound reach the ear at the same time.

What this means practically is that any symphony you would care to put through these speakers, from 37–20,000 Hz, will make you think the actual orchestra is sitting in front of you, clearer than if you were conducting them yourself.
The speakers can be customised into whatever colour you choose, which means that you do not need to be a Scandinavian minimalist with a home of stripped pine, Fukasawa sofas and grey cashmere throws to enjoy them.

Donating your suit to the Oxfam in Hampstead may be one model of charity, but, according to a report from New Philanthropy Capital, advisers to high-net-worths are becoming more capable of suggesting other kinds of giving. Its previous report, in 2007, showed that 63 per cent of advisers saw little incentive to offer philanthropic advice; three years on, and the same percentage now think philanthropy will be a part of their core offering by 2013.

‘Many advisers still believe, “It is not my place to raise it with the client,”’ says Plum Lomax of New Philanthropy Capital, ‘but in truth there are very few circumstances where people close off from this conversation.’ Advisers are also frequently unaware of the range of philanthropic opportunities available.

Coutts, however, with its in-house philanthropy team (the first UK private bank to do so), has already seen signs that philanthropy can have a positive impact on improving client trust and loyalty, while differentiating itself from its competitors.

Maya Prabhu, head of UK philanthropy for Coutts, says this originated in 2005, when Mark Evans arrived as head of family business and philanthropy from America, bringing US private banks’ more comprehensive and willing attitudes to giving. Coutts has now created a charitable giving account so clients can set aside some of their assets purely for donations.

We first visited Impetus, the charity which brings together private equity money and business skills with small charities, in issue 12. Well, now it is about to gain a new chairman.

Louis Elson, co-founder of Palamon Capital Partners, is taking over in March from Stephen Dawson, Impetus’s co-founder, and in an interview he said his plans are ‘not for revolution but evolution’. He wants to reinforce and enlarge Impetus’s existing networks of supporters throughout the law, accountancy, consulting and PE. The strength of Impetus, Elson says, is that its model is ‘battle-tested’ and it produces ‘precision and measurable results’.

Elson is already very familiar with philanthropic endeavours: he is on the development board of the Prince’s Trust. He was previously at Goldman Sachs and was a partner of Warburg Pincus, and is a member of the Research Advisory Board of the British Venture Capital Association.

The portfolio is composed of charities that work with issues of social significance, such as Street League, which uses sport to motivate disadvantaged people, and overseas charities, such as Camfed International, which educates children in Sub-Saharan Africa. Floreat Impetus!

The Hedgehog is sponsored by B Capital

Select and enter your email address The short, sharp email newsletter from Spear’s
  • Business owner/co-owner
  • CEO
  • COO
  • CFO
  • CTO
  • Chairperson
  • Non-Exec Director
  • Other C-Suite
  • Managing Director
  • President/Partner
  • Senior Executive/SVP or Corporate VP or equivalent
  • Director or equivalent
  • Group or Senior Manager
  • Head of Department/Function
  • Manager
  • Non-manager
  • Retired
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
Thank you

Thanks for subscribing.

Websites in our network