| David Reid Scott | ||||||
Although David Reid Scott has in his time worked for CSFB, Merrill Lynch, Morgan Grenfell and Donaldson Lufkin&Jenrette, he says he has always been happier in a smaller firm, “where I could have a very direct impact on the business”.
In the 1970s, he was one of those advising the Saudi Arabian Monetary Agency on the investment of its reserves. And in the 1980s he was a partner at Phoenix Securities, which virtually cornered the market in advising stockbroking firms wishing to be bought out during the London market’s Big Bang. So when the forces of consolidation pitched him back into his old firm of CSFB, he needed little persuading to downsize again.
This time, he was lured away by Richard Briance, an old friend from Credit Suisse White Weld days, as chairman elect of Hawkpoint, an independent corporate finance firm.
David Reid Scott was born in Dublin and spent his childhood in various parts of the UK where his father had army postings. His mother died when he was six, and his father when he was 12. He and his brother, now a director of UK investment management company Rathbones, were then brought up by his stepmother in Leicestershire and his grandparents in West Wicklow, Ireland, surrounded by horses. He still hunts regularly with the Oxfordshire-based Heythrop hunt.
At Eton, Reid Scott swam and played squash for the school and, as a terrier-like number eight, captained the rugby team. After reading modern history at Lincoln College, Oxford, he was offered jobs by Hong Kong trading house Swire and by oil company Shell, but chose to go to the London office of US investment bank White Weld&Co, where he began work in 1969.
By 1973 he was working in New York for David Mulford, now chairman of CSFB International and then head of White Weld’s international business, originating Eurobonds for US and Canadian issuers, to be executed in Europe. In 1977, Mulford persuaded him to join him at the Saudi Arabian Monetary Agency, where White Weld and Barings had a joint advisory contract to advise the Saudi government on the management of its reserves.
During his four years in Saudi Arabia, oil production doubled to 10 million barrels a day, and the price rose from $9 a barrel to $31. Saudi reserves rose in parallel from $30 billion to $175 billion. “We became a honeypot to which bankers were continual visitors,” Reid Scott recalls. “The heat often made living conditions pretty disagreeable, but I made an enormous number of friends and contacts in the financial world.”
By the time he left, White Weld in New York had been acquired by Merrill Lynch, and when he returned to London it was to work for Merrill. Before long, however, he decided that this was “a horrible place to work” and in 1984 left to join John Craven as a partner at Phoenix Securities. After advising one of the leading stock firms on its sale to Barclays, Phoenix found itself in a highly profitable business acting for selling partnerships during Big Bang. Over four years it advised on an average of five deals a year.
Phoenix was sold to Morgan Grenfell in 1987, but continued to be run as a separate niche operation, specializing in financial sector transactions.
When Deutsche Bank acquired Morgan Grenfell in 1989, Phoenix’s partners bought the business back, although Craven stayed on at Morgan Grenfell. During the 1990s, Reid Scott advised on a succession of high-profile mergers, including the sale of fund manager Gartmore to NatWest and of broker Smith New Court to Merrill Lynch. Eventually Phoenix was sold again, this time to Donaldson Lufkin&Jenrette in 1997, as the platform on which to build the US firm’s investment banking operations in Europe.
This time the firm was completely integrated into its new parent. Reid Scott became vice-chairman of DLJ’s European investment banking and chairman of its financial institutions group. Recent transactions include the merger of insurers Irish Permanent and Irish Life, the acquisition of UK insurer NPI by Australian financial services group AMP, and the sale of UK broker Gerrard to South African financial group Old Mutual.
When Credit Suisse First Boston bought DLJ, Reid Scott became a vice-chairman in the investment banking division, but after a few months at CSFB’s Canary Wharf office in London, he realized this wasn’t going to be for him. The consolidation of the investment banking industry, he says, “may well create new powerful global franchises, but it has narrowed client choice, accelerated the number of conflicts and increasingly neglected the mid-cap sector. I also think they are hell to manage and not much fun to work in.”
