Colin Hermon

“Can’t be true.” This was the reaction to the news that Colin Hermon, the highly successful capital markets business originator for Jardine Fleming, had resigned from the bank. Hermon tendered his resignation on the afternoon of Friday July 12.

It is a sad parting of the ways for both sides. Hermon openly admits that his nine years at the bank were extremely enjoyable. “Fleming is a very special institution which manages to be aggressive and successful but also highly civilized,” he says. “Perhaps only Lazards has those same qualities.”

And Fleming will miss Hermon. In order to maintain its earnings momentum the group has come to rely upon a major profit contribution from Jardine Fleming, its money-spinning Far Eastern arm owned 50:50 with Jardine Matheson. JF’s profits peaked in 1993 and UK-based Robert Fleming has been unable to take up the earnings slack.

Fleming’s “crown jewels” are its asset management business and Jardine Fleming. The money management business is rock-solid but unlikely to grow faster than the industry as a whole; Jardine Fleming is the in-house “shooting star”, the most highly regarded and most profitable major investment bank in the Asian-Pacific region. To lose the key producer in your star division will cause concern in the Fleming boardroom.

In his three years in Hong Kong, Hermon’s name became synonymous with the success of Jardine Fleming’s capital markets business in Asia. The consistent flow of equity and equity-related bond issues lead-managed by Jardine Fleming became the bank’s best calling card. Many of those offerings provided investors with huge profits as the Pacific region stock markets surged. Some rose by 200% to 300%. “There were relatively few disappointments,” agrees Hermon.

In a career which began with Kidder Peabody ­ where Stanley Ross and Hans-Joerg Rudloff posted him to the firm’s Hong Kong office ­ and included seven years with Lehman Brothers, Hermon worked mainly with fixed-rate bonds. The move to Fleming in 1987 was essentially to become an equities specialist. “The bank was a pure equity house. If they owned any fixed-rate bonds it was either by mistake or on a client’s instructions,” recalls Hermon. In particular he developed a highly successful partnership at Fleming with the brash Ian Hannam, who joined the bank from Salomon Brothers in January 1992. “Ian Hannam in London and Colin Hermon in the Far East proved to be a dream-team combination for the bank,” says a managing director of Peregrine.

Hermon was the consummate business-getter, with an instinctive feel for uncovering new mandate opportunities. He criss-crossed the region, bringing back lucrative financing assignments from India (where he is regarded as one of the foremost capital-raising experts), Thailand, Indonesia, Malaysia, Pakistan and the Philippines. Although Fleming was expanding rapidly in other regions, including Latin America and Africa, the Hong Kong connection with Hermon produced the lion’s share of the bank’s capital markets business and profits.

Why has such a successful and rewarding partnership come to an end? It’s no secret that Hermon wanted to return to the UK to take responsibility for some of his old coverage areas and to become involved with emerging markets in Europe. Recently divorced, he wanted to be able to see more of his two young children, Freddy and Angelica. Was there some disagreement with his colleague, Ian Hannam, who had been appointed to Fleming’s main board of directors? Was there an objection to the recruitment of Michael Hammond from SBC Warburg to work with Hannam? Did Fleming not offer Hermon the territorial coverage areas which he had requested?

An amicable parting

Probably there was some dissension, but both sides claim that the parting is entirely amicable. What else would you expect from close-knit, gentlemanly Fleming ­ Hermon himself went to Eton, as did most members of the Fleming family ­ who would never lower themselves to arguing in public?

Two points immediately emerge from Hermon’s departure. First, Fleming has to find a replacement for him as soon as possible. Within Fleming there are no easily identifiable candidates, so look for a high-profile (£500,000 plus compensation package) from outside. Secondly, Hermon becomes a very hot property himself.

“Colin can take his pick of the main investment banks, but if he wants to get out of the pressure cooker he could join a niche organization or even one of his corporate clients,” says a former colleague from Lehman Brothers. A close friend from Hong Kong adds: “The real attraction of Colin is that he has produced all of his business essentially with just himself and one assistant and we all know that he could do it again, even without the Jardine Fleming umbrella.”

Don’t expect Hermon to be idle for very long.

Henri Calame

Chairman and managing partner Coges ­ Geneva

Turn the clock back 12 years. It’s 1984 and you are in Geneva. What’s the talk of the town in the elegant bars of the Hotel Des Bergues, the Beau Rivage and Le Richemond?

The gossip is about political and financial affairs in France, now governed by the Socialists. The most immediate impact to be felt by the Geneva banking community is that Paribas (Suisse), employing more than 800 people and totally independent from French influence, is to be sold back to its Paris parent. Merde!

If the Geneva bankers were aghast, think about Paribas’ clients, the majority of whom were French. The prospect of their Swiss assets being scrutinized by the French authorities was not acceptable. What to do? They could have simply transferred the assets to another Geneva bank but they were comfortable with Paribas, and their portfolios had performed well. To provide a solution, a number of them asked Henri Calame, the head of the private banking division, to create a safe haven for their funds.

Calame, a highly experienced Swiss banker who had been trained by Hambros in London and Paris during the 1960s, rejected the idea of forming a new bank. With commendable foresight he advised his clients that there were already too many banks in Geneva. Instead, with 11 other former colleagues and friends he founded Corrateri Gestion (Coges), which would act as a private portfolio management company.

A pure portfolio management company, however, could not provide all the banking services required by his clients. Calame found the answer by forming an association with the prestigious private banker Lombard Odier & Cie, which subscribed and took a majority interest in the capital of Coges.

Today, Coges is one of Geneva’s most successful medium-sized money managers. Lombard Odier still has a substantial minority shareholding and continues to provide clearing, settlement and safe-custody facilities for Coges, as well as a full range of banking services for the firm’s clients.

Has the association been happy, rewarding or even, at times, frustrating? “As in any good marriage,” says Calame, “we have experienced all of those. However, the result has been a total success.”

But have there recently been some ripples in the normally still waters of private Swiss asset management? Certainly the Geneva financial community senses a wind of change. As in London and New York, asset management companies are hot properties. In Geneva, the highly regarded Cook & Cie was bought by MC Securites and an investor group associated with financier Hans-Joerg Rudloff for an undisclosed sum which is thought to have been a dizzy 3% of total assets under management.

Boutique intrigue

Along the bars and restaurants of the Quai des Bergues there have been dark rumours concerning the intentions of a new financial boutique ­ de Pury, Pictet and Turrettini. These are names to conjure with. David de Pury is a skilled diplomat who represented Switzerland in the GATT talks and was, until recently, co-chairman of Asea Brown Boveri. Guillaume Pictet is a scion of the great Genevese private banking family. Henri Turrettini is one of four well-known brothers in Swiss property and banking. Has Calame’s Coges found itself the target of unwanted attention?

Guillaume Pictet in fact worked for Calame at Coges. By all accounts the two enjoyed an entirely amicable and enjoyable working relationship. Sources in Geneva say that strains appeared only when Pictet suggested to Calame that he might relinquish some of his responsibilities and shareholding over a specified period. When Calame declined (one of his two sons might eventually wish to enter the business), the Geneva sources say that he was presented with an effective ultimatum: the new de Pury group would combine with Coges and leave Calame with vastly reduced influence and responsibility in the enlarged company. The normally imperturbable Calame may have been astounded, but in true Coges corporate style (the firm doesn’t disclose even its total assets under management) said nothing.

Among Swiss private bankers and money managers the rumours were greeted with amazement and some incredulity.

The de Pury group certainly received an answer from Calame: “No way.” Guillaume Pictet is no longer with Coges. Henri Turrettini suddenly departed from swanky private bankers Mirabaud & Cie. So the de Pury camp has been rebuffed? It looks that way, but the implacable Calame remains coolly aloof. “At Coges we have always applied a strategy of continuity,” he says. “This strategy and the growth potential of the company remain valid and unchanged.”

George Ugeux

Group executive vice-president internati