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December 15, 2009

Whole New Ball Game

By Spear's

A change of government may hit the private banking world for six again, but Rupert Robinson of Schroders is ready for any onslaught, he tells Josh Spero

THE THREATS ARE ominous. If a new, blue government next year sharply reins in public spending, as the Tories have indicated is their desire, the economy could quite happily fall off a cliff. Despite these intimations of annihilation, Rupert Robinson is not convinced that tough words will lead to tough action: ‘You have the usual macho rhetoric accompanied by partial execution; interest rates will have to stay low.’ Which is the least we can hope for, given what we have to offer if the recession does deepen: nothing. ‘A lot of the ammunition has now been used up. There’s very little left if we do lurch back down. There lies the conundrum.’

Robinson, CEO of Schroders Private Banking London (which won best Asset Management Firm for High Net Worths at the Spear’s Awards in September), has seen plenty of lurches up and down in his quarter of a century in the City. He began his career straight out of Harrow, abandoning plans for university after his father died suddenly.

He worked as ‘a personal assistant for 2½ years to two main board directors for NM Rothschild, and I must say I learnt more in that period than I would challenge anyone would ever learn at university’. He was exposed to everything from new share issues to commodities in both investment and commercial banking, and all this in an era when NM Rothschild was at the forefront of Thatcherite privatisation. His ‘lucky break’ was a move to the private-client side, a business he would head up in the years that followed.

After being at Rothschild as ‘man and boy’ for seventeen years, he took the briefest of excursions into a boutique wealth-management business at Beaumont Capital, shortly before it was bought by Schroders in 2002. However, all the time — at Rothschild, Beaumont and Schroders — Robinson says he knew why he stayed in finance: ‘We’re challenged with what turns us on: is it managing money, clients or people? Frankly, I enjoy all of those. People and markets are my passion.’ It was a childhood interest in stock markets that spurred his City career in the first place.

Robinson takes evident pride in the team he has assembled at Schroders and is clear where he developed his leadership  skills: on the playing fields of Harrow (before being brushed up at Ashridge). ‘I captained the cricket XI and played for the rugby XV and the soccer XI. Sport was my passion — it taught me the importance of teamwork and getting the best out of people. You learnt how to celebrate success and deal with adversity. I’m pleased to say it was more of the former in our case.’

IF SCHRODERS ON Robinson’s arrival were a game of cricket, it would be an Ashes Test with England just having experienced a middle-innings collapse: ‘We were faced with some big challenges, particularly given the investment bank had just been sold, Schroders had a desire to build a private banking franchise, we were going into an economic downturn, profits of the group were coming under extreme pressure, and we found ourselves in that rather unenviable position of too high costs, not high enough revenue. It was tough, very tough, because Schroders for much of my career had enjoyed a period of unparalleled success.’

What a difference a decade makes. Now Robinson and his colleagues’ ambitions are to grow private banking revenues from around £100 million to £150 million within five years. Assets under management had increased to £11.2 billion at the end of June, and net new business has exceeded £500 million over the past 18 months. Future expansion will combine organic growth with selective hires. He is on the lookout for promising individuals.

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When they arrive, they will find a Schroders that has learnt lessons from the credit crisis. ‘I think there are a lot of positive things we did in 2008 but it’s fair to say that we made some mistakes as well. There are elements of our portfolio construction process that we have gone back and revisited and challenged. I’m always a great believer that when you’re faced with a crisis, the one thing you have to say after it is, “What can you learn from it? What changes should you make?”’

Robinson won’t be changing his restrained approach to his clients: ‘We’ve invested a lot in building relationships. We haven’t been overly salesy in driving business flows — some people might say not sufficiently salesy. When we engage in a conversation with potential clients, the first thing that we’re not thinking about is how we are going to earn revenue from this client. And if that means we don’t make any money from that client for a number of months, that’s fine. The integrity of our people and our business model must always come first.’

If you want to know where that sort of long view comes from, you could look no further than the cricket pitches
of Harrow.

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