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In his time as UK secretary of state for business, enterprise and regulatory reform, Lord Mandelson sometimes found it necessary to castigate investment bankers with sharp words, once attacking then Barclays Capital chief executive Bob Diamond for deriving “unacceptable and quite obscene earnings” from work that consisted of merely “making deals, not building businesses” and with none of the virtues of true entrepreneurship. But Lord Mandelson is not one to hold grudges and within a year of this attack has become an investment banker himself of a sort, as a senior adviser to Lazard. The firm expects Mandelson to do roughly one day’s work a week for his undisclosed annual fee. “He’s not a full-time employee, but this is a proper job,” says a Lazard source. “This firm doesn’t make ceremonial appointments. He’ll role up his sleeves, attend meetings, deal directly with clients at times.”
Before making the offer, Lazard’s UK chief, William Rucker, had plenty of opportunity to observe Mandelson in action at close quarters. Lazard advised US acquirer Kraft on its contentious takeover of Cadbury last year. Mandelson warned the US firm against stripping the assets of the UK company or cutting UK jobs. Evidently, Lazard doesn’t hold grudges either. “That was his job at the time,” shrugs the source.
Mandelson has clearly been in touch with his own inner entrepreneur since Labour’s election defeat last year and made sure to protect his earnings capacity. As well as working with Lazard, he has set up his own consultancy firm, Global Counsel, to advise corporates planning to expand in emerging markets. Sir Martin Sorrell, chief executive of WPP, was sufficiently impressed with the business plan to take a minority stake, providing another office for Mandelson as well as seed capital. The work sounds similar to what Lazard expects.
Euromoney is sure Mandelson will keep the two roles separate. Lazard has a big practice advising sovereign governments, and Mandelson, drawing on his experience as European trade commissioner from 2004 to 2008, might well work more with them than with Lazard’s corporate clients. But he won’t advise on anything to do with the UK government, at least until two years have passed since his departure from public office. Anything else would be unseemly.
