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NOW ON
Clegg plan
on pensions
draws fire
THE INVESTMENT industry slammed
Liberal Democrat plans to allow par-
ents to use a quarter of their pension
pots to guarantee their childrens
mortgages yesterday, arguing it
could undermine pensions and hit
retirement incomes.
Nick Clegg said the move will help
struggling young people get a foot on
the housing ladder at a time when
large deposits are needed to get a
mortgage.
We have thousands of young peo-
ple who are desperate to get their
feet on the first rung of the property
ladder and the number of young peo-
ple asking for help from family mem-
bers has doubled, said the Deputy
Prime Minister. So the government
is going to allow those parents and
grandparents to act as a guarantor so
their youngsters can take out a
deposit and buy a home.
But the Association of British
Insurers said the scheme could back-
fire, harming the guarantors if they
have to sacrifice savings later.
Pensions are designed to mature
into a decent retirement income, not
for other purposes, said Otto
Thoreson. Any scheme which uses
pensions as a guarantee must ensure
it does not inadvertently make savers
worse off when they retire.
And the National Association of
Pension Funds (NAPF) added this fails
to address major problems in either
the housing or pensions market.
A pension can only be spent once
and this policy could end up leaving
retirees out of pocket. The UK already
has a serious problem with people
saving too little for their old age,
said NAPF chief executive Joanne
Segars.
www.cityam.com FREE
City to have more awareness of
whats happening. He said there
needs to be a few successful listings,
so that the next generation doesnt
think the US is the only place to go.
Acton Smiths comments follow
government proposals announced
last week to loosen listing require-
ments for fast-growing companies on
the London Stock Exchange (LSE).
London has seen a number of British
tech firms abandon the LSE for
the Nasdaq index or look to be
acquired instead of floating
in recent years.
The government getting
their weight behind this defi-
nitely helps, but they can
only do so much, Acton
Smith said. Im very proud of
being a British business and would
love to float in London but it will be
many months, probably many years
before [it] looks attractive, he added,
saying UK investors dont understand
tech firms like the US does.
Innovation minister David Willetts
put forward plans to relax free float
the proportion of a company that
needs to go public and reporting
requirements last Thursday, in a move
designed to encourage European as
well as British firms to launch an ini-
tial public offering (IPO) in the UK.
The last UK technology company to
consider floating domestically was
Edwards, the vacuum pump group,
that ended up floating in New York
after pulling flotation plans in the
UK last year.
BY TIM WALLACE
FTSE 100 M5,852.62 -2.02 DOW M13,579.47 -17.46 NASDAQ3,179.96 +4.00 /$ 1.62 unc / 1.25 unc /$ 1.30 unc
See Page 34 & 35
See Page 28
LIB DEM CONFERENCE: Page 4

ALLISTER HEATH: Page 4

Certified Distribution
30/07/12 til 26/08/12 is 128,484
TOP TECH BOSS:
LONDON STILLNO
SILICON VALLEY
LONDON needs to do more to nurture
growth in technology firms and
become an attractive destination for
them to go public, the head of one of
the UKs most successful internet
firms said yesterday, warning that the
US is a significantly better option for
blooming British companies.
Michael Acton Smith, chief execu-
tive of Mind Candy, told City
A.M. yesterday that he would
prefer to float the firm in
the UK, but that US mar-
kets are much more
attractive and a lot
needs to happen for
London to compete.
Mind Candy, which created
the popular childrens online
franchise Moshi Monsters, saw sales
reach 29m and its profits increase
six-fold to 7.4m last year, but Acton
Smith said he was not looking to float
in the short term and called for the
Entrepreneur behind Moshi Monsters sensation says UK is still lagging in key industry
BY JAMES TITCOMB
Michael Acton Smith, Mind Candys chief executive, said the US is still a much better proposition
ISSUE 1,723 MONDAY 24 SEPTEMBER 2012
CHILL IN ANTARCTICA
JOHN TERRY
QUITS ENGLAND
TEN GOLDEN
RULES OF
INVESTING
DAY 9
SEE PAGE 25
THINK ITS TURNED COLD HERE? EXPLORE THE REAL WINTER
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Follow me on Twitter: @allisterheath
G
E
T
T
Y
Clegg revives battle on
rich with raft of tax plans
THE TOP 10 per cent of Britons
should pay more in tax, the Deputy
Prime Minister said yesterday, prom-
ising to become more creating in
finding new ways to take money
from the richest.
But finance analysts warned the
move could simply drive cash and
assets abroad, making the UK and
the government worse off, rather
than richer.
Clegg said a mansion tax long-
favoured by the Liberal Democrats
is not the only additional levy he
is pushing for.
For example, he said further
changes to stamp duty could raise
more cash for the government,
while higher council taxes could
also hit the owners of expensive
homes, and extra hikes in capital
gains tax may also be considered.
The budget saw stamp duty
raised to seven per cent on houses
worth over 2m, but Clegg said
more charges need to be levied.
I think many people of
considerable wealth in this
country want to pay, he told the
Andrew Marr show yesterday
The vast majority of people in
this country wont find it
acceptable if further fiscal
austerity was implemented on the
backs of the poor.
Banks to shed 20bn property loans
Europes banks are on track to dispose of
20bn worth of loans backed by offices,
shops and hotels this year as lenders
across the continent race to reduce
exposure to the volatile real estate sector
ahead of tough regulatory changes. Banks
including Lloyds Banking Group,
Santander and the Bundesbank have
already sold 7.5bn during 2012.
Europe IT sector loses to Asia and US
European information technology
companies generate less than 10 per cent
of the industrys global revenues,
following decades of under-investment in
the sector. Only 15 of the top 100 global IT
companies are headquartered in Europe
and none are market segment leaders,
according to research by AT Kearney.
London regulation pushes deals away
Some large companies are looking to shift
debt issuance programmes away from
London to avoid a stricter interpretation
of new European rules than elsewhere.
Since July, UK regulators have stringently
enforced EU laws requiring companies to
give detailed information to buyers of
their debt earlier.
Morrisons prefers own scheme
WM Morrison, is set to sidestep the
governments new flagship auto-enrolment
pension regime by setting up a staff
scheme that is exempt from the new rules
only days before they come into force.
Strike threat as pay freeze continues
Scotland could face an autumn of public
sector industrial action.Senior trade
unionists said that local government
workers were close to saying enough is
enough after successive wage freezes.
Volcker: ring-fencing not enough
Ring fencing Britains banks will not
protect taxpayers in the event of another
financial crisis, according to Paul Volcker,
the former chairman of the Federal
Reserve and the architect of the Volcker
Rule.
Nuclear subsidies could add 70 to bills
Subsidies for new nuclear power could add
70 to annual household energy bills, Ian
Marchant, the chief executive of SSE warns.
Ministers should refuse to subsidise EDF
Energys plans for reactors, he argues.
IPhone 5 costs stay in check
Some components used to build Apples
iPhone 5 cost a little more than those of the
phones predecessor, owing to an improved
display and a more-advanced processor
chip. Research firm IHS said the cost was
$197, compared to $188 for the iPhone 4s.
Cost of leaving Greece rises
for Crdit Agricole
Crdit Agricole will likely have to pour a
further up to 700m into its flailing Greek
unit before it will be able sell the subsidiary.
VINCE Cable will today announce
plans for a new business bank,
aimed at pumping government
money into small firms cut off
from other sources of finance.
The business secretary wants to
put 1bn of taxpayers money into
the new institution, which will
then borrow up to another 9bn on
the capital markets, giving it a total
of 10bn to use to help small firms.
It will be operated at arms
length from the government and
instead of making credit risk
decisions itself, will operate
through banks and other financial
institutions.
Cable has recently indicated he
would seek to help SMEs in the
aerospace and advanced
manufacturing sectors, though the
details of this new banks
operations are still to be fully
worked out.
For decades British industry has
lacked the sort of diverse, long-
term finance that is quite normal
elsewhere. We need a British
business bank with a clean balance
sheet and a mandate to expand
lending rapidly and we are now
going to get it, he said.
However the new bank must
lend on commercial terms to avoid
violating EU state aid rules which
stop the government giving banks
subsidies.
Taxpayers will
spend 1bn on
business bank
4
NEWS
BY TIM WALLACE
BY TIM WALLACE
To contact the newsdesk email news@cityam.com
I
t is hard to know what the Liberal
Democrats are playing at. Their
traditional positioning was
centrist, appealing to people who
were repelled both by Labours
statism, high taxes and
authoritarianism (as well as its
foreign policy) and by the Tories low-
tax, smaller government, Eurosceptic
policies, as well as their traditional
social conservatism.
The Lib Dems had distinct policies
on civil liberties, proportional repre-
sentation and environmentalism;
they were also pro-EU. Millions of vot-
ers came to believe they represented a
genuine third way, a nice, more rea-
sonable, less sectarian alternative to
the two tired old parties. The reality
was less laudable: Lib Dems would
promise radically different things to
different people in different parts of
the UK. But the strategy worked.
EDITORS
LETTER
ALLISTER HEATH
The Liberal Democrats attack on middle class will backfire
MONDAY 24 SEPTEMBER 2012
All of this is now over. Joining the
coalition destroyed the partys non-
alignment and alienated a vast chunk
of its left-wing voters, leaving it with a
rump of centrists. The party is now
desperate to rectify this. The policies
outlined at the Lib Dem conference
yesterday were all of the left, in an
attempt to differentiate the party
from its supposed Tory partners.
Yet this will end in tears in London
and the home counties. Cleggs
bizarre pledge to hike even further
the tax burden on the top 10 per cent
of earners people on 50,000 or
more is suicidal, as it targets a vast
group of middle class Lib Dem voters.
Further up the income ladder, many
of the Lib Dems affluent voters in
South West London (and elsewhere)
are unlikely to ever vote for them
again after Clegg said that anybody
who lives in a house worth 1m
would be targeted by HMRC. The mes-
sage it sends to the much larger num-
ber of people who dream of one day
living in such houses is equally clear:
dont vote for us, we hate anybody
who earns a good wage, is ambitious
and aspires to live in a nice home.
The nonsense was relentless. Simon
Hughes said that second homes in
inner London should be banned.
Support for tough love welfare poli-
cies are at a record high -- yet the Lib
Dems will only agree to change the
be able to pledge the quarter of their
pension pot they can withdraw as a
lump sum when they turn 55 to a
deposit to help youngsters buy a
home?
It is either meaningless if parents
or grandparents are already past 55,
they can already do this or if they
are aged less than 55 it would be
extremely risky as nobody would
actually know the pension funds end
value. The whole affairs smacks of
endowment mortgages, where pay-
ments were invested in equities
rather than to pay off the mortgage
debt, often disastrously falling in
value. And why only allow pension
cash to be used for mortgages? There
are plenty of other worthy causes. The
Lib Dems have truly lost their way.
status quo if even more taxes are
slapped on the wealthy. Of course,
many people will agree with some of
these ideas. Some will even have
majority support. But they cannot be
described as centrist or cuddly. The
Lib Dems may regain a few of their
left-wing supporters but they will
alienate the group that has stuck
with them during the past two years.
And forget about the partys centrist
credentials, which is what it used to
emphasise in those parts of the coun-
try where its main rivals were Tories.
The decision by Lib Dem delegates to
oppose any expansion of airport
capacity in Southern England
Heathrow, Stansted and Gatwick, as
well as the construction of a Boris
Island airport confirms that the
party has no interest in economic
growth or competitiveness.
What of the idea that relatives will
But financial consultants warned
the move would prompt a tax
exodus, driving wealthy individuals
to move assets and funds out of
Britain and into lower-tax
jurisdictions.
Attacking the wealthy will
dampen the UKs economic growth
and job creation and will send
capital overseas, said deVere Groups
Nigel Green.
The income that assets held in
the UK generate is a great potential
stream of revenue which would be
compromised if those assets were
moved overseas.
In addition, money held in the
UK is a possible source of investment
in British businesses which provide
employment and income and boost
consumer spending and tax
revenues.
Meanwhile Treasury minister
Danny Alexander pledged to recruit
an extra 100 tax inspectors as part of
a new drive to reduce tax avoidance
by those with assets of more than
1m. Previously only those with more
than 2.5m have faced additional HM
Revenue and Customs scrutiny.
The new jobs website for London professionals
CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
Nick Clegg said the rich must pay more tax to protect the poor from welfare spending cuts
FACEBOOK confirmed yesterday it is
working with the US data provider
Datalogix to measure how many
people who view ads on the social
networking site then go on to buy
that product in a store.
The recently-listed group has been
under pressure from Wall Street to
show it can profit from its vast
wealth of data. But it also faces
pressure from regulators over the
use of personal information.
Datalogix holds data from over $1
trillion consumer purchases made
by more than 100m households at
retail stores across the US.
Facebook said that by matching
email address and other
information used to set up an
account on its site with data
collected from retailers, Colorado-
based Datalogix can help advertisers
see whether shoppers bought a
product before or after a campaign.
Despite concerns over privacy,
sources close to the firm said that
people would be able to look up
their profiles to see what purchase
information is associated with
them.
If they wished, they could then
opt out of having their information
used for measurement purposes.
Currently, Facebook is only
tracking this information for users
of its site based in the US.
Facebook hires
data group to
track ad success
BY KASMIRA JEFFORD
ADVISERS to Promsvyazbank, one of
Russias largest privately owned
banks, will today start pre-marketing
a planned initial public offering in
London aimed at raising up to
$500m (307m), two sources close to
the placement said.
The bank asked Russias local
market regulator earlier this month
for permission to list its shares on
the London Stock Exchange,
marking the first step towards a
long-awaited foreign listing.
Promsvyazbank, which is 88.3 per
cent owned by billionaire brothers
Dmitry and Alexey Ananyev, said at
the time it had asked the regulator
to approve the listing of up to 25
per cent of its shares in the form of
global depositary receipts.
The lender had considered an
initial public share offer (IPO)
before the global banking crisis of
2008-09 but shelved plans due to
the economic climate.
The deal, if successful, would be
the biggest among non-state
Russian banks since Nomos raised
over $700m in an IPO last April.
It would also follow the sale of a
$5bn stake in the countrys biggest
lender Sberbank.
Last month Promsvyazbank
reported a tripling in its first-half
net profit to 3.8bn roubles (72.3m),
helped by a sharp rise in interest
income.
Russian bank
targets $500m
in London float
BY A CITY A.M REPORTER
XSTRATA hopes to thrash out the
final terms of its merger with
Glencore this week, using its exten-
sion from the Takeover Panel to
address concerns from agitated
investors.
Some shareholders in the mining
giant are unhappy with retention
packages for directors at the firm,
which have already been watered
down.
BlackRock and Legal & General
have reportedly spoken out against
the plans, though neither would
comment yesterday.
However, other shareholders have
supported handsome retention ben-
efits for executives, keen to avoid an
exodus of top staff once chief execu-
tive Mick Davis steps down after six
months as planned.
He will be replaced by Glencores
Ivan Glasenberg at the top of the
enlarged firm, after the terms of the
merger were amended at the start
of the month to fend off an embar-
rassing protest vote from sharehold-
ers.
Executives are also trying to clinch
Xstrata close to
investor deal
for its merger
BY MARION DAKERS an assurance that Davis replace-
ment on the board will be an Xstrata
representative.
Glencore and Xstrata asked the
Takeover Panel on Friday for an
extension until 1 October to enable
Xstratas independent non-executive
directors to take full account of feed-
back from consultation with key
shareholders.
Shares in Xstrata closed down 4.2
per cent while Glencore fell 1.7 per
cent on Friday in response to the
delay.
Both sides are understood to be
keen to have an agreement in place
this week.
The firms have been in talks about
a merger since February but have
come up against investor anger over
several aspects including the share
ratio offered to Xstrata investors and
the pay promised to directors.
Qatar Holdings, the 12 per cent
shareholder that upset the deals
progress in June with a demand for
better terms, has not yet announced
whether it will support the merger
in its latest form.
Glencore and Xstrata declined to
comment yesterday.
THE FORMER defence secretary
Liam Fox yesterday came out in
support of BAE Systems merger
with EADS, dashing hopes in the
right wing of the Conservatives
that he would fight against the
defence tie-up.
Fox said BAE would go into a
slow, managed decline without
a merger that gives it access to
new markets.
Falling defence budgets in the
heavily indebted West means that
consolidation in the industry is
inevitable. The status quo is not a
viable option for the longer term,
Liam Fox in surprise support
of tie-up of defence giants
BY MARION DAKERS whatever sentiment might wish,
he wrote in the Sunday
Telegraph.
Incumbent defence secretary
Philip Hammond has said the
government will use its golden
share in BAE to win assurances
that any deal secures British
interests.
French leader Francois
Hollande and Germanys Angela
Merkel pledged at the weekend to
consult closely on the merger
plans.
Barring an extension, EADS
and BAE have until 10 October
under UK takeover rules to set
out detailed plans for the merger.
5
NEWS
cityam.com
Liam Fox is enthusiastic about the merger between BAE and EADS
BAE Systems PLC
21 Sep 17Sep 18Sep 19Sep 20Sep
338
340
342
344
346
348
350
352 p
340.10
21Sep
THE CBI has urged the government
to open public services up to
competition more quickly, arguing
it could save the taxpayer nearly
23bn a year.
Despite the row over G4Ss per-
formance at the Olympics, the UKs
largest business group said opening
up service contracts to private busi-
nesses, mutuals, charities and social
enterprises would make huge sav-
ings.
CBI director general John Cridland
said there had been some action in
some parts of government since a
white paper 15 months ago, but said
there was still some inertia.
The CBI based its figures on a
report by consultants Oxford
Economics, which suggested public
services worth 278bn would benefit
from being opened to competition,
saving the government 22.6bn a
year.
Total public spending this year by
central government and local
authorities is projected to be
676.6bn and the CBI argued any
cuts would help balance the budget
by the end of 2016-17.
If you look at what government
says about public service reform and
what the CBI would want to see done
on public service reform, theres a
very significant overlap. Its momen-
tum we say is lacking, said Cridland.
Outsourcing
could save UK
23bn, says CBI
BY JENNY FORSYTH
FIRMS face a longer struggle to fill the
holes in their troubled pension funds,
a study from PwC showed today.
The average pension scheme will
need some 11 years to plug the deficit,
PwC predicted, up from the eight
years it predicted in 2011.
The time firms needed to balance
their schemes books had shrunk
between 2009 and 2011 from 11 years
down to eight years, but it has
bounced back up, PwC says, given
heavily depressed gilt yields and eco-
nomic uncertainty.
Over 91 per cent of the 98 defined
benefit schemes surveyed were in
deficit and 57 per cent were deeper
in the black than last year. This is
despite the fact that last year also saw
an increase in deficit repayment con-
tributions.
The difficult market combination
of low gilt yields and Eurozone uncer-
tainty is hitting pension schemes
hard, said Jeremy May, pensions part-
ner at PwC.
Many companies now face the
stark choice of ploughing consider-
ably more cash into their pension
Pension funds
face long battle
to plug deficits
BY BEN SOUTHWOOD
scheme, or being saddled with the
debt for longer, he added.
In many cases, lack of cash availabil-
ity means the decision is simple, May
added.
But on the whole firms responded by
paying more in, rather than planning
on holding the debt for longer, the
data showed.
Seventy-nine per cent of firms which
had bigger deficits increased repay-
ment contributions to fill the hole,
whereas 43 per cent increased the
length of their recovery plan.
Despite the parlous state of many
pension schemes, and their reliance
on gilts, May warned against smooth-
ing yields. Smoothing can mask the
true position and produce unintended
results, he said.
This report comes as the number
contributing to private sector employ-
er-based pension schemes declined to
just 2.9m, from a high of over 8m in
1967, according to data from the
Office for National Statistics released
last Thursday.
Pensions minister Steve Webb said
last week that this decline only added
to the case for auto-enrolment, which
will be rolled out from October.
G4S UNDER FIRE: Page 9

6
NEWS
cityam.com
PENSION SCHEMES FACE LONG STRUGGLE TO PLUG GAPS
AVERAGE DEFICIT REPAYMENT PERIOD
PRIVATE DEFINED BENEFIT SCHEMES STEADILY ECLIPSED
2009
11 YEARS
2012
11 YEARS
2011
8 YEARS
2010
9.5 YEARS
5.0 millions of members Dened contribution
Dened benet
2006 2007 2008 2009 2010 2011
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Source: Oce for National Statistics
S ou rce: P wC
of schemes in decit
have a bigger decit than 2011
91% 57%
SPAIN will on Thursday find out how
large a European Central Bank
bailout its besieged banking sector
needs, when consultancy Oliver
Wyman publishes the details of its
investigation into the sector.
This report, which looks into the 14
banking groups constituting some
nine tenths of the sector, is expected
to produce a figure of around 60bn
(48bn), Spanish finance minister Luis
de Guindos confirmed over the week-
end. This will come out of the 100bn
already earmarked for bailing out
Spanish banks.
Meanwhile Spain is believed to be in
talks with the European Central Bank
over the prospect of a larger bailout
for the government as a whole.
As Germanys constitutional court
has approved the creation of the
European Stability Mechanism (ESM)
bailout fund, Spain will have access to
the necessary funds if it needs to fol-
low Ireland, Greece and Portugal in
tapping other European governments
finances.
If Mariano Rajoy takes that step, it
would also open the door for the ECB
to buy Spanish bonds, relieving the
BY BEN SOUTHWOOD
AND TIM WALLACE
pressure even further on the belea-
guered government.
However, simply having this support
on offer has pushed down govern-
ment bond yields in recent months,
reducing the pressure on the govern-
ment and so reducing the need to ask
for help, pushing any bailout further
into the future.
Indeed, De Guindos said there was
no need to rush the process.
This is not about rescuing Spain but
about making sure that the euro cur-
rency project is a project for every-
body, he said over the weekend.
Spain will do what it has to do but
with no rush.
But Spain will publish the details of
its budget and reform plan on
Thursday.
France calls for more time for
Greece to meet deficit targets
GREECE should be allowed more
time to meet deficit targets set by
international lenders provided it is
sincere about reforming its
economy, French Prime Minister
Jean-Marc Ayrault said yesterday.
Near-bankrupt Greece needs the
European Union and International
Monetary Funds blessing on spend-
ing cuts worth nearly 12bn (9bn) to
unlock its next tranche of aid, with-
out which it faces default and a
potential exit from the Eurozone.
The answer must not be a Greek
BY CITY A.M. REPORTER
exit from the Eurozone, Ayrault said
in an interview with news website
Mediapart. We can already offer it
more time...on the condition that
Greece is sincere in its commitment
to reform, especially fiscal reform.
Tough fiscal medicine prescribed by
Greeces international lenders has
provoked widespread popular anger
there that forms part of a broader
backlash spearheaded by French
President Francois Hollande against
German-led austerity measures
across Europe.
So far, Greek officials have said
agreement on 9.5bn of the 11.5bn
package of spending cuts had been
reached. That includes 6.5bn in cuts
to wages, pensions and benefit pay-
ments and a further 1.1bn euros in
savings planned from an increase in
the retirement age.
Responding to doubts over
Hollandes ability to deliver on his
pro-growth, anti-austerity platform,
Ayrault told Mediapart that a
planned 120bn European Union
stimulus package for the bloc as a
whole was one of his successes but
that this should only be a first step.
We need to go further ...120bn is
not enough, he said.
Spanish Prime Minister Mariano Rajoy is reluctant to impose further cuts on his country
Spanish yields remain down on rescue hopes
Jul Aug Sep
0
6
6.5
7
7.5
8 %
EUROZONE FISCAL TIES: Page 19

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EUROZONE states are preparing to
allow the blocs permanent bailout
fund to leverage its capital in the
same way as its predecessor so it
can reach a capacity of more than
2 trillion and rescue big countries
if necessary, Der Spiegel said
yesterday.
The weekly news magazine said
that the European Stability
Mechanism (ESM) would have two
instruments like its predecessor,
the European Financial Stability
Facility (EFSF), that would only
allow public money to be used for
Eurozone rescue fund aims for
full capacity of over 2 trillion
BY CITY A.M. REPORTER particularly risky transactions such
as buying Spanish bonds, while
private investors would provide the
rest.
It had always been expected that
the ESM, which is expected to come
into force on 8 October with a
capacity of 500bn, would have the
same leverage ability as the EFSF
and euro zone finance ministers
reiterated this at their meeting in
Cyprus earlier this month.
If the ESM uses the same leverage
techniques as the EFSF, it would
have a lending power of around 2
trillion without countries having to
give more capital to the fund.
Spain to learn
extent of bank
bailout needs
ACROMAS, the private equity backed
owner of AA and Saga, has taken the
first step in a possible break up of its
portfolio after appointing Ernst &
Young to value its business opening
the door for a sale of the firms.
The heavily indebted investment
house has to liquidate or refinance
its assets by September 2015 when its
senior debt matures.
However, it is understood the firm
has already set the wheels in motion
by appointing E&Y to lay the ground-
work for a sale or break up of the
business.
Analysts have estimated AA could
be worth about 5bn and Saga worth
around 4bn if either were hived off
and sold to the market today.
Last night a person familiar with
the situations said E&Y was under-
taking due diligence across all of
Acromass businesses.
These include a number of other
brands, including the British School
of Motoring (BSM) and MetroMail.
They said the firm had not appoint-
ed advisers yet as the review was still
at its preliminary stage.
AA owner gears
up for mooted
insurance sale
BY MICHAEL BOW Original proposals to float the firm
back to market were shelved due to
the poor investment markets over the
past five years. Their persistence has
stifled the boards desire to float the
firm more recently.
Acromass majority shareholder is
private equity giant Charterhouse
Capital Partners, holding 36 per cent.
Fellow private equity firms Permira
Advisers and CVC Capital Partners
hold further stakes of around 20 per
cent. Management also has a holding
of 20 per cent.
Acromas, which employs 38,000
people and has 18m customers,,
bought the two disparate insurance
businesses in September 2007 in a
highly leveraged merger of the firms
for 6.3bn, using 4.8bn of bank debt
to finance the deal.
It is understood options on the table
include a float of AA or a sale of the
business to another private equity
firm or investor.
Acromas could also decide to raise
money with a high yield corporate
bond offering as an alternative to a
sell off.
Ernst & Young declined to com-
ment.
8
NEWS
cityam.com
SCOTLANDS finance minister
John Swinney has claimed that an
independent Scotland would be
able to take on the state-backed
liabilities of Royal Bank of
Scotland and Lloyds Banking
Group.
Speaking at the Institute of
Chartered Accountants conference
the SNP minister said that if
Scotland had been independent at
the time RBS and HBOS, now
Lloyds, needed 62bn in bailouts,
it would have jumped to their
rescue.
Scottish finance
MP speaks out
BY JENNY FORSYTH
SOCIETE Generale has set itself a
target to increase profits at its retail
banking arms in Russia and
Romania.
SocGen, like its rivals, is cutting
costs and selling assets to better
resist Europes sovereign debt crisis,
regulatory costs and volatile
markets.
The chief executive of Frances
second-biggest listed bank, Frederic
Oudea, told the Financial Times it
was key the banks international
retail is delivering growth by the
end of next year.
SocGen sets
retail targets
PROFILE: ANDREW GOODSELL
ACROMAS chief executive Andrew Goodsell
is invariably referred to as the poster boy
for the private equity industry, on the back
of his daring bid to squeeze together two of
the biggest and most recognisable brands in
the UK AA and Saga.
Yet for all the praise, the deal was some-
thing of a departure for Goodsell, who had
spent much of his career away from the
world of private equity deal making in the
traditional sphere of long-term business
development.
The deal to form Acromas in 2007, with the
help of private equity players CVC, Permira
and Charterhouse, was underpinned by
Goodsells deep-seated attachment to the
Saga brand a company he had worked for
for more than a decade before the merger.
He originally joined the rm close to 20
years ago, growing it to become a major
force in the nancial services world.
Goodsell, 53, enjoyed a rapid rise at Saga,
moving from a business development role
to become chief executive in the space of a
few years.
He joined the rm in 1992 as business devel-
opment manager before quickly becoming
head of business and product development
one year later.
He swiftly established Saga as a frontline
provider of nancial products and a leader
in investment offerings for its core market,
the over-50s.
He was appointed director of business
development for Saga Services and Saga
Investment Direct in 1998 before being pro-
moted to its managing director.
The move in 2007 to snap up AA and merge
it with Saga was a daring one for Goodsell
but underpinned by a belief the two busi-
nesses each with their long, distinctive
heritages could work with one team.
THE roles of top bosses at security
firm G4S are on the line this week as
the firm finalises its internal report
into its Olympic staffing fiasco.
The jobs of Nick Buckles, chief
executive, David Taylor-Smith, chief
operating officer, and Ian
Horseman Sewell, head of global
events are all being examined as
part of the review process.
The internal report into the
affair is expected to be published
this week.
Buckles has already been hauled
in front of the Home Affairs
Committee twice to explain the
debacle which saw the firm admit
just two weeks before the Games
that it could not provide the
contracted 10,400 venue guards,
forcing British troops to cancel
holidays to fill the emergency
shortfall.
In a report published last week,
the committee said that the firms
most senior personnel should be
G4S bosses in
firing line after
roles examined
BY KATIE HOPE
held accountable for making
misleading staffing assurances to
security officials so close to the
start of the Games.
Far from being able to stage two
Games on two continents at the
same time, as they recklessly
boasted, G4S could not even stage
one, said Keith Vaz, chairman of
the influential Home Affairs
Committee.
The report also said G4S should
be put on a government blacklist,
jeopardising its chances of winning
core government.
G4S view on whether the
company can still win prison and
police contracts with Buckles at the
helm is likely to be the main factor
determining his fate.
After the report was published,
G4S accepted responsibility for its
failure to deliver in full on the
security contract. However, it
reaffirmed its right to the 57m
management fee, which the report
called for it to return, saying it
related to set-up costs.
ALLAN Leighton, the former boss of Asda and the Royal Mail, has joined the board of Charlie
Bighams, the upmarket ready meal maker, as a non-executive director. The London-based
food group, which employs over 200 staff and turns over around 24m a year, said it hopes
bringing Leighton on board will help it reach its target of cooking up 100m in sales.
EX-ASDA CHIEF JOINS FOOD GROUP BIGHAMS
9
NEWS
cityam.com
GI Partners eyes sale of mental
health-care provider Cambian
THE OWNERS of the Cambian
Group are exploring the sale of
the UKs largest healthcare
provider for around 500m.
GI Partners, the private equity
group, has appointed the
investment bank Rothschild to
work on a strategic review that
could lead to the sale of Cambian.
Sources close to the company
said that GI hoped to fetch up
500m for the company although
they indicated that the figure was
at the top of current estimates.
BY KASMIRA JEFFORD
Cambian provides residential
care and rehabilitation services
for over 1,300 patients in more
than 60 facilities. It works with
140 local authorities and employs
more than 3,500 staff across the
UK.
The group also provides
educational services for people
with learning disabilities and
runs specialist Asperger and
autism schools for children and
adults.
GI Partners, which has offices in
both London and California,
acquired Cambian in 2004 and has
grown the business through
acquisitions in the sector. In 2008,
it acquired psychiatric
rehabilitation firm Care
Aspirations in a deal thought to
be worth around 60m. In April it
bought Signpost Childrens
Services, a Devon-based care
service provider for deaf children.
GI was set up in 2001 and has
around $8.4bn (5.2bn) assets
under management. The firm also
owns UK caravan park operator
Park Resorts.
A spokesperson for GI Partners
was unavailable for comment.
IN BRIEF
George Soros invests in Lookers
n Billionaire investor George Soros has
snapped up a 4.5 per cent shareholding
in Manchester-based Lookers car
dealership. The 82-year-old, famous for
his 10bn bet against the exchange
mechanism in 1992, is thought to have
paid around 12m, based on the firms
267.6m stock market value on Friday.
Soros bought the shares through Soros
Fund Management. He made the move
after Lookers shares fell by up to 5.2 per
cent on Wednesday and Thursday when
it was announced that Jack Petchey's
investment vehicle, Trefick, had sold its
17.3 per cent stake. Recent Soros
investments include a near eight per
cent stake in Manchester United, plus
investments in Facebook and Google.
Fidelity set to oppose Redrow bid
n Redrows third largest shareholder is
set to oppose the proposed bid by Steve
Morgan, the housebuilders founder and
executive chairman to take the company
private for about 660m. Fidelity
Worldwide Investments, which together
with its US counterpart, owns 10.5 per
cent of Redrow, said Morgans offer was
opportunistic and plans to oppose the
plans, according to the Financial Times.
Morgan, who owns a 40 per cent stake
in Redrow, last month tabled a
provisional offer of 152p per share to
buy the remaining stake in the company,
valuing the company at around 660m.
He has until 28 September to make a
firm bid or walk away, according to
takeover rules.
SPORTS Directs proposed takeover of
JJB Sports 180 stores is likely to come
under investigation by the competi-
tion watchdog once the acquisition
has already taken place.
The sportswear giant founded by
Newcastle United owner Mike Ashley
remains one of the frontrunners to
buy the struggling retailer, although
it is said to be interested in less than
half of the stores.
But the deal faces potential scrutiny
from the Office of Fair Trading (OFT)
and Sports Direct may be forced to
shed several of JJB Sports stores in
areas where it already has a dominant
market position.
A source familiar with the process
yesterday warned that even if the
merger goes ahead without an investi-
gation the OFT may look into the case
retrospectively.
The OFT declined to comment.
JJB Sports was forced to put itself up
for sale in July after battling with
falling sales and failing to secure fresh
JJBs sale faces
scrutiny of the
retail watchdog
BY KASMIRA JEFFORD funds from investors.
Accountanting group KPMG is han-
dling the sale process, which is expect-
ed to be completed this week ahead of
an imminent rent bill.
Any deal is expected to involve a pre-
pack administration where a buyer is
lined up before a formal administra-
tion process leading to several store
closures and putting jobs at risk.
Irish consortium Stafford Group has
also launched a late bid for JJB Sports,
while JD Sports and JJB Sports founder
Dave Whelan pulled out of talks last
week.
Mike Ashleys Sports Direct remains one of the frontrunners to buy the ailing JJB
JJB Sports PLC
21 Sep 17Sep 18Sep 19Sep 20Sep
0.25
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0.40
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21Sep
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NORWEGIAN energy firms and oil
services workers reached a
preliminary wage deal over the
weekend, raising hopes the sides
could avoid another strike after
labour action in July hamstrung
the worlds eighth-largest oil
exporter.
They agreed on a 4.5 per cent
wage increase, subject to a ballot
by the 5,800 employees,
negotiators said in separate
statements.
Negotiations have yielded a
new proposal for next year's wage
agreement ... and a ballot to
members will be sent out at the
beginning of next week, said the
Industri Energi trade union.
Norways oil
workers in deal
TOP INVESTMENT banker Ian
Hannam yesterday denied
rumours that he is looking to join
fellow JP Morgan veteran Lloyd
Pengillys new natural resources
fund, insisting he has not decided
what role to take when he leaves
the firm.
The two are both experienced
mining dealmakers, with Hannam
currently consulting on the
ongoing Glencore and Xtrata
merger.
Hannam is leaving JP Morgan
following a Financial Services
Authority investigation for market
abuse. The veteran dealmaker has
said he is fighting the regulators
claims.
Hannam yet to
decide future
BY TIM WALLACE
Interest in Tchenguiz property
portfolio reaches a crescendo
INSURANCE firms are leading the
charge for property magnate
Vincent Tchenguizs 3bn property
portfolio after a pick up in demand
for the assets.
MetLife, AIG and Prudential are all
understood to be in the running for
the portfolio, which is being sold off
by the Tchenguiz Family Trust.
Citigroup has been appointed to
handle the sale, with freeholds of
250,000 UK homes up for grabs for
investors.
The portfolio, which may be sold
BY CITY A.M. REPORTER off as a single unit or broken down
into smaller sections, had been
pitched at sovereign wealth
funds.
Now domestic investors such
as insurers, reinsurers and
pension funds are all in the
running.
The portfolio, built up
by Tchenguiz during the
past two decades, has an
average lease length of
60 years.
Around 40 per cent
of it is focused in the
southeast of England.
Tchenguiz was at the heart of a
bungled investigation by Britains
top fraud-busting agency the
Serious Fraud Office (SFO) last
year. In July he said he would
seek damages and bring proceed-
ings against the SFO for his arrest
last year.
Interest in the portfo-
lio is understood to
have increased since
the SFO case was
dropped.
Tchenguiz is selling off
his property portfolio
Thursday 25th October, One Mayfair, London
S&P Capital IQ is delighted to present
the S&P Capital IQ UK Fund Awards 2012,
an event recognising excellence within
the Asset Management industry.
Entries for the Marketing Campaign
and Mobile Application of the Year awards
are now open. Entry forms available on
www.spcapitaliq-fundawards.com
Copyright 2012 by Standard & Poors Financial Services LLC (S&P), a subsidiary of The McGraw-Hill Companies, Inc. All rights reserved.
This is
The One
E
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I
E
S

N
O
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O
P
E
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T
Y
THE UKs next generation of nuclear
power plants will come closer to con-
struction this week, as bids roll in for
the Horizon project and EDF pro-
gresses in talks with potential part-
ners for work at Hinkley Point.
Horizons future was put in doubt
in March, when RWE and E.ON put
the 15bn joint venture up for sale,
blaming the onerous cost of going
ahead with the project.
But a raft of firms are expected to
table final bids ahead of Fridays
deadline, including a consortium led
by Westinghouse and Exelon, anoth-
er fronted by Areva and Guangdong
Nuclear Power Corporation, and
General Electric Hitachi.
Horizon is made up of sites in
Gloucestershire and Angelsey, with a
goal of generating 6.6 gigawatts of
nuclear power.
Nomura, acting for the sellers, has
set the end of September as a final
deadline for offers.
But the line-up of bidders could be
altered by EDFs separate efforts to
make progress on its Hinkley Point
site in Somerset.
Investors warm
to UK nuclear
plant projects
BY MARION DAKERS
Frances EDF last week started a pub-
lic consultation about the new plant,
and is searching for a partner to
shoulder some of the financial bur-
den.
It is believed to be in talks with sev-
eral Chinese institutions before it
makes a final investment decision at
the end of the year.
EDF declined to comment on the
identity of its possible backers, but
said in a statement: We have said for
some time that we were open to the
idea of other investment partners and
as we approach our final investment
decision, it is right to consider fund-
ing options.
The project is advancing well and
has achieved a level of maturity to
make it attractive to potential new
investors.
Both schemes are crucial to the
coalitions aim of replacing Britains
ageing nuclear power stations. The
Department for Energy and Climate
Change, which declined to comment
yesterday, has been championing both
projects to potential investors world-
wide. It expects the nuclear industry
to develop 16 gigawatts of new capaci-
ty by 2025.
EDF has set its sights on a new station at Hinkley Point in Somerset
I
TS been a busy week for energy
secretary Ed Davey. Somewhere
between lambasting the
rightwing Tea Party tendencies
of anti-green Conservatives and
batting away suggestions hes the
next leader of the Liberal Democrats,
the minister has been plagued by the
thorny problem of keeping Britains
lights on.
Hamstrung by his partys pledge
to block public subsidy of nuclear
projects, Davey has instead brimmed
with confidence about the private
sectors interest in footing the bill
since his appointment in February.
This enthusiasm led him to spend
the Olympics hob-nobbing with
energy chiefs, keen to champion the
benefits of investing in nuclear at
the coalitions Business Embassy.
This week will show whether
these efforts, alongside a promise to
overhaul the energy market, are
starting to pay off. A number of
global groups are expected to place
bids for the Horizon project, and a
much-needed new partner for EDFs
scheme is in the works.
Analysts remain sceptical that
either project will get off the ground
in time to avert an energy shortage,
but progress on either would be a
shot in the arm for the coalitions
power policy if not Daveys own
chance of power within the nuclear-
shy Lib Dems.
BOTTOM
LINE
MARION DAKERS
13
NEWS
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A reminder that starting from October 2012, all employers must enrol eligible workers
into a qualifying workplace pension scheme. The date you have to do this by depends
on the size of your company, but to give yourself time to prepare, visit The Pensions
Regulator at www.tpr.gov.uk/actnow where youll nd out all you need to know.
Workplace pensions. Were all in.
THE Senate unanimously passed a
bill over the weekend that would
shield US airlines from paying for
their carbon emissions on European
flights, pressuring the European
Union to back down from applying
its emissions law to foreign carriers.
The European Commission has
been enforcing its law since January
to make all airlines take part in its
Emissions Trading Scheme to
combat global warming, prompting
threats of a trade fight.
The Senate approved the bill
shortly after midnight on Saturday,
as it scrambled to complete
business to recess ahead of the 6
November congressional and
presidential elections.
Republican senator John Thune, a
sponsor of the measure, said it sent
a strong message to the EU that it
cannot impose taxes on the United
States.
The Senates action today will
help ensure that US air carriers and
passengers will not be paying down
European debt through this illegal
tax and can instead be investing in
creating jobs and stimulating our
own economy, Thune said.
The House of Representatives has
passed a similar measure, and could
either work out differences with
the Senates version or accept the
Senate bill when Congress returns
for a post-election session.
EU carbon law
for airlines is
vetoed by US
Coalition could breathe a sigh
of relief over plans for power
SOME OF Britains biggest energy
firms are circling Irelands state-
owned gas company as it gears up for
privatisation.
Bord Gais Energy is to be put on the
block by Irelands National Treasury
Management Agency (NTMA), which
is looking to raise cash for the bailed-
out country through asset disposals.
Other stakes that will be sold by
NTMA include a 25 per cent holding
in Aer Lingus, parts of the Electricity
Supply Board and forest manager
Coillte.
Barclays Capital has been advising
on options for Bord Gais for several
months. It is understood that Bord
Gais will appoint its own advisers to
give a valuation of the firm next
month, firing the starting gun on a
sale.
Companies in the frame to bid
include Centrica and SSE. Both firms
declined to comment yesterday.
Centrica has no established cus-
tomer base in Ireland, but has
recently started developing an off-
shore wind farm in the Irish Sea.
Energy giants
sizing up Bord
Gais disposal
BY MARION DAKERS
SSE, meanwhile, is already Irelands
third-largest energy supplier, with
750,000 customers and a string of
windfarms across the country.
In June, the firm spent 256m on
buying four power stations in Ireland
from Endesa, pledging at the time to
expand in the country.
Bord Gais has around 1m cus-
tomers in Ireland, including a bur-
geoning residential electricity
business.
The company decline to comment
yesterday.
While the energy branch of the
business is on the block, the compa-
nys gas transmission network will
remain in the hands of the state.
John Mullins, chief executive of
Bord Gais, said in July that he hoped
a sale could be completed by the end
of 2013.
The coalition is trying to foster clos-
er ties between the Irish and British
power markets. Energy secretary Ed
Davey last week opened a two-way
link between Deeside in Wales and
Woodland in County Meath, which
will give the UK access to power from
windfarms in Ireland.
Centrica, led by chief executive Sam Laidlaw, is expected to make a bid for Bord Gais
15
NEWS
cityam.com
IN BRIEF
Russian planned for BP board
n British oil giant BP, which wants to
buy a stake in Russian state-controlled
rival Rosneft, plans to appoint a
prominent Russian to its board of
directors as part of a new commercial
alliance with the Kremlin, it was
reported yesterday. Bob Dudley, BPs
chief executive, discussed the plan with
Vladimir Putin last week at a meeting at
the Russian presidents retreat on the
Black Sea, The Sunday Times reported.
The appointment of a Russian director
to BPs 15-strong board would be a first
in the companys 104-year history, it
added. Dudley and chairman Carl-
Henric Svanberg put a proposal to buy a
stake in Rosneft to Putin tomorrow,
Rosneft CEO Igor Sechin said on Friday.
Japanese fund eyes Renesas
n A Japanese government fund is
considering a bailout of Renesas
Electronics as part of a consortium
including Toyota, countering a 100bn
yen (800m)bid for the chip maker by
private equity firm KKR, two sources
said yesterday. The taxpayer-funded
Innovation Networks plan may include
an offer of more than 150bn yen in
return for a controlling stake in Renesas.
Deutsche Bank
n Deutsche Bank has asked us to make
it clear that it is cutting 1,900 jobs
including 1,500 in investment banking
not the 3,400 reported in City A.M. on
Friday.
Apple seeks further damages
in Samsung patent case in US
APPLE has asked a judge to award
an extra $535m (329.7m) in its
US patent case with Samsung
Electronics in addition to its
requested permanent injunction
against sales of Samsungs
infringing products.
The harm to Apple was
deliberate, not accidental, Apple
attorneys said in court papers
filed 21 September in the US
District Court in San Jose,
California.
Samsung wilfully diluted its
trade dress, taking billions in sales
in the fast-growing US smartphone
market at a key moment in the
transition between feature phones
and smartphones, attorneys said.
Cupertino, California-based
Apple sued Samsung in April 2011,
and Samsung countersued as part
of a battle being waged on four
continents over a smartphone
market valued by Bloomberg
Industries at $219.1bn (1.3bn).
The companies have also sued
each other in the UK, Australia
and South Korea.
In August, Apple won a jury
verdict of more than $1.05bn
against Samsung after a finding
that Samsung infringed six of
seven patents for the mobile
devices.
Apple is requesting an
enhancement of $135m under the
Patent Act and $400m under the
Lanham Act, for a combined total
of $535m, compared with $268m
from the verdict under both
statutes, court papers show.
The court may increase the
damages up to three times the
amount assessed, according to the
court papers.
QUEUES formed around the block at the Bank of England on Saturday as it opened
doors usually shut to the public. Highlights of the 30-minute tour, which was part of the
City of London festival, included the Garden Court, the Governors office, the Court
Room and the Committee Room, where the MPC meets monthly to set the Bank rate.
BANK OF ENGLAND OPENS DOORS TO PUBLIC
16
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SWISS private bank Julius Baer could
cut up to 880 jobs at Bank of America
Merrill Lynchs overseas wealth man-
agement business, including in
London, as the integration of the
newly acquired unit gets under way, it
is understood.
Julius Baers chief executive Boris
Collardi is thought to have told an
investor meeting that between 30
and 40 per cent of the Bank of
America Merrill Lynch overseas
wealth management units 2,200
jobs will have to go, equal to 660 to
880 roles.
Collardi told the investors the
move was intended to cut the banks
cost-income ratio from the current
rate of over 100 per cent down to 70
per cent, according to leading Swiss
publication Der Sonntag yesterday.
A spokesman for Julius Baer
declined to comment on the report.
Julius Baer announced the
acquisition of the Merrill Lynch unit
in August as it seeks to expand in
Julius Baer lays
out scale of cuts
BY CITY A.M. REPORTER fast-growing emerging markets, but
investors balked at the total cost,
estimated at 1.47bn Swiss francs
(970m), sending its shares sharply
lower.
The purchase means the firm now
has a duplication of roles in its
major financial centres in Singapore,
Hong Kong, Switzerland and its
offices in the City of London.
Investors had been wary of the
acquisition and shot down plans by
Julius Baer management to raise
more capital in a new rights issue for
future acquisitions.
Collardis comments are
understood to have focused on a core
strategy for the bank of reducing
costs and increasing volumes.
Earlier this month he hinted at
the scale of future job cuts in the
merged businesses due to staff
overlaps and revealed plans to merge
two offices in Singapore in a bid to
cut costs.
We expect (to cut) several
hundred jobs, including in
Switzerland, he said.
BLACKBERRY maker Research in
Motion (RIM) is under pressure to
restore its reputation after users
across Europe faced a three-hour
outage last Friday.
Its shares closed down over six
per cent last week, close to their
lowest level in nine years, as the
firm prepared to release its latest
quarterly results this week.
RIMs chief executive, Thorsten
Heins, issued an apology to
RIM battles for reputation after
European outage rocks shares
BY KATIE HOPE
BlackBerry users who were
affected. He said as much as six per
cent of its customer base around
five million users may have
experienced email delays of as long
as three hours.
RIM suffered a similar outage last
October that left tens of millions of
frustrated BlackBerry users on five
continents without email, instant
messaging and browsing. RIM has
78m subscribers but has seen its
market share shrink as rival firms
products gain ground.
Tough trading slows partner
promotion rate at law firms
THE NUMBER of partners in English
and Welsh law firms has dropped
for the first time since the depths
of the financial crisis, research out
today claims.
A net 153 partnership roles
disappeared in the year to the end
of June, after two years in which
more than a 1,000 net partner
positions were added, according to
figures released by Wilkins
Kennedy.
There are an estimated 32,000
partners in England and Wales.
BY MARION DAKERS
The overall number of lawyers has
slowly risen since 2009, with almost
125,000 practising solicitors at the
end of May, the Solicitors
Regulation Authority (SRA) says.
But partners have begun to trail
behind for the first time in three
years, as promotions are put on
hold amid tough trading conditions
and mergers across the industry,
Wilkins Kennedy partner Tommy
White explains.
Given the state of the economy
and its impact on the profitability
of some law firms, its
understandable that firms are
reluctant to promote lawyers who
dont already have a track record of
bringing in income, he said.
Of course, it is more challenging
for non-partners to bring in new
fees during the recession, meaning
that proving yourself is tougher
than ever before.
White added that older partners
are staying in work longer in order
to fund their retirement, blocking
the way for new partner
promotions.
The SRAs latest figures show that
more than 1,000 firms opened in
the last year, while 344 closed.
FF&P Private Equity backs manager buyout
G
E
T
T
Y
Universal begins EMI sell-off
after EU waves through deal
UNIVERSAL Musics sale of EMI
assets will begin this week after
the European Commission
approved Universals 1.2bn
takeover of the iconic record label
but ordered that subsidiaries
including Parlophone and EMI
Classics are divested.
The two remaining major
labels Warner Music and Sony
BMG have already indicated
their interest in the parts of EMI
Universal was ordered to sell off
BY JAMES TITCOMB
to comply with European
competition concerns.
A number of private equity
firms are also interested in the
labels, which are home to artists
including Coldplay, Pink Floyd
and Queen, and which make up
more than 60 per cent of EMIs
European revenue.
Universal Musics chief
executive Lucian Grainge said the
merger would achieve 100m in
cost savings and that despite
Warner lobbying against EMIs
sale, it would not have to offer a
substantial premium to win EMI
assets.
Universals historic purchase
which reduces the music
industrys big four record labels
to a big three, was approved by
both the European Commission
and the US Federal Trade
Commission on Friday, 10 months
after the deal was originally
announced.
Universal, which is owned by
French group Vivendi, is now
expected to pocket around 350m
from the sale.
FLEMING Family & Partners private
equity arm yesterday announced it
had stumped up 8m to take a
majority stake in the management
buyout of rental furniture provider
David Phillips Furniture.
FF&P Private Equity has put up
the money to back the deal, which
will see current management rein-
vest in the firm.
FF&P PE said the business, which
recently refurbished 130 flats on
Arsenal FCs old football ground
Highbury, had only scratched the
surface of other lucrative sectors,
BY MICHAEL BOW
such as the social housing market. It
also said it saw attractive opportu-
nities for the firm to act as a sector
consolidator in the future.
FF&P PE co-head Henry Sallitt said:
The David Phillips business has a
huge range of opportunities. The
current constraints on the availabil-
ity of mortgage finance are ensur-
ing that the trend towards rental
from owner-occupied is continu-
ing.
David Phillips expects its current
revenue growth rate to accelerate as
rented property continues to
increase, with sales forecast to grow
30 per cent and surpass 20m for
this year.
David Phillips chief executive
Nicholas Gill said: We are very
ambitious to continue developing
David Phillips into the business that
everyone in the company dreams of
it becoming.
Gill added that the FF&P PE tie-up
would give it better access to capital
to increase its revenue growth rate.
The deal adds another business to
FF&P PEs portfolio, which includes
businesses like financial services
researcher Defaqto. The private
equity house is geared towards
investing between 3m and 15m in
each new deal.
Universal Musics chief executive Lucian Grainge said Warner will not have to pay extra to win EMIs assets
17
NEWS
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ONLY closer government ties and a
limited system of financial transfers
can help the Eurozone move past its
current crisis and focus on long-term
competitiveness, the European
Central banks (ECB) Beno t Cur
said yesterday.
In order to restore confidence,
policymakers in the euro area need
to resolutely push ahead with fiscal
consolidation, structural reforms to
enhance competitiveness and
European institution-building, said
Cur.
A centralised fiscal capacity
could be considered too, provided it
is not the basis for permanent
transfers but is used to promote
market integration and better
resilience to economic shocks. For
instance, a Eurozone
unemployment insurance scheme
could be set up, which would
support much-needed cross-country
labour mobility.
Meanwhile former central banker
Athanasios Orphanides said the
Eurozone could break up if the
proposed banking union is not
implemented.
The European Commission
unveiled sweeping plans for the ECB
to supervise all Eurozone banks last
week as a first step toward a
banking union.
ECBs top man
calls for closer
fiscal ties in EU
BY TIM WALLACE
G
E
T
T
Y
HOUSEHOLD gloom lifted somewhat
in September, Markit said today,
despite the ongoing economic slump.
Forty per cent of respondents
expected their finances to deteriorate
over the coming year, the data
showed, down from 42 per cent in
August. This pushed the year-ahead
financial outlook index up to 44.3,
from 43.5 the least downbeat
response since March 2010. A score of
50 indicates households expect no
change in their finances.
The generally negative picture,
despite mild improvement, was but-
tressed by the deterioration in the
state of current respondents current
finances. Thirty-one per cent said
their finances worsened in
September, versus just seven per cent
reporting an improvement.
But Tim Moore, a top economist at
Markit and author of the report was
sanguine. Septembers survey sug-
gests that the gradual easing of pres-
sure on real incomes so far in 2012
Gloom lifts for
cash-strapped
UK households
BY BEN SOUTHWOOD continues to support household
finances, Moore said.
A summer of relative calm on the
household finance front has brought
with it an improvement in expecta-
tions for the year-ahead, he added.
But inflation expectations jumped
from 83.3 in August to 85.8 this month
the sharpest rise for 20 months, sug-
gesting gloom may return.
Around three-quarters of house-
holds noted an increase in their living
costs during September, Moore com-
mented, the largest [monthly jump]
since the January 2011 VAT rise.
Retail lobby calls on coalition to
scrap duty rise and freeze rates
THE COALITION must rein in the
costs it imposes on consumers
and businesses, a retail lobby
group said today, after years of
weak growth in the sector.
The delayed fuel duty increase
must be scrapped, the British
Retail Consortium (BRC)
demanded, and business rates
must be frozen in 2013 after
rising substantially in the
previous two years.
These measures will go some
way to restoring consumer
confidence, the group
BY BEN SOUTHWOOD claimed, after a massive squeeze
from the prolonged recession.
This comes after two years of
sluggish growth in the retail
sector values climbed on average
2.1 per cent per year over the
period comparing unfavourably
to the 4.5 per cent average annual
expansion enjoyed between 2006
and the end of 2007.
Four years on from [the
collapse of Lehman
Brothers], which sent retail
sales plummeting, sales
[value] growth is still less than
half what it was before, said BRC
boss Stephen Robertson, Sales
volumes are now going
backwards.
Representing over five per cent
of GDP and more than 10 per cent
of jobs, retail is a vital part of the
UK economy and a key indicator of
its health, Robertson claimed.
Its still the biggest private
sector employer in the country
but this analysis vividly
demonstrates the lasting blow
dealt to households and to retail
sales by the crisis of 2008, he
added.
PRIME property in central London
hit a new record high in
September, according to estate
agent Knight Frank, as it
continued its robust recovery from
the post-financial crisis slump.
Prices grew 10 per cent in the
last 12 months, the firm said
today, pushing the index to a point
some 51 per cent higher than its
March 2009 low and a full 15 per
cent above its previous all-time
high.
Prices grew despite the rise in
the top rate of stamp duty and
BY BEN SOUTHWOOD
despite reforms affecting the
imposition of capital gains tax and
stamp duty on non-residents, the
estate agent said.
These changes hit the high end
of the market hardest, Knight
Frank says 20 per cent fewer
houses have sold for 2m to 5m in
the past three months compared to
the same period last year.
But the very highest end of the
market has been practically
impervious to these changes, the
data shows, and sales below this
range have shot up too.
Twenty-three per cent more
houses worth under 2m were sold
in the last three months, compared
to the same period last year, while
prices dashed up 11.6 per cent over
the period.
Households get less gloomy about current and expected nances
2010 2011 2012
32
34
36
38
40
42
30
34
38
42
48
50
Financesv. onemonthago(LHS)
Financesin12months time(RHS)
TOP CIVIL servants from the G20
nations are meeting in Mexico in
an attempt to hammer out
common ground on food prices,
which have rocketed this year.
The two-day meeting is intended
to prepare the ground ahead of
Novembers meeting of finance
ministers and central bank
governors.
Britains top representative at
the gathering of deputies in Mexico
City is the Treasurys director
general Michael Ellam, who sits on
G20 deputies meet in Mexico to
try to end food price worries
BY TIM WALLACE the departments executive
management board and takes
responsibility for international and
EU negotiations.
Food prices have been pushed up
by droughts in the US and South
Africa corn prices hit record
highs on the Chicago Board of
Trade last month, and soybeans
followed this month.
But the G20s agenda is wider
than this one market, with
negotiations also covering the
Eurozone crisis and the
implementation of international
financial regulations.
UK-BASED management
consultants have tripled the
percentage of their work done
outside the UK, data from an
industry body revealed today.
Consultancies did 17 per cent
of their work in international
markets in the first half of the
year, up from five per cent in the
same period of 2011.
And fee income continued to
grow, the report from the
Management Consultancies
Association (MCA) said, rising a
twentieth in the first half of 2012
compared to the same period last
year.
Alan Leaman, chief executive
Management consultants triple
overseas work in just a year
BY BEN SOUTHWOOD
of the MCA put the growth down
to digital innovation. UK
consulting firms are at the
centre of developments in the
digital economy advising
organisations across the globe on
how to capitalise on innovations
such as cloud computing and so-
called big data, Leaman said.
Firms are also particularly
seeing a demand for cyber
security and regulatory
compliance work, he went on.
Despite the gloomy economic
climate, consultancies continue
to be optimistic, the report
showed, with 94 per cent
expecting expansion and 61 per
cent predicting expanding
employment.
BRITISH shares are at last at a low
enough price to tempt investors
back into the market, according to
Capita Registrars data out today.
Over this summer a net 1.3bn
was pumped into shares by
individual investors, accompanied
by rising share values boosting their
wealth by 17.6bn.
The small holders sold a net 1bn
in the spring, fleeing from
economic uncertainty and volatility
on the market.
But Capital Registrars believes the
FTSE 100s low point of 5,260 at the
end of May tempted investors back
into the market.
Investors flood into UK shares
as fall in price proves tempting
BY TIM WALLACE They have since been rewarded as
the index rose back to 5,900.
The combination of buying and
rising prices has pushed total
ownership to 215bn or 11.3 per
cent of the market.
Private investors have astutely
timed the market this year, trading
down before the stock market fell
in June, and buying back in on the
way up, said Capita Registrars
Charles Cryer.
Private shareholders will have
earned 38bn in dividends by the
end of 2012 since the crisis began in
2008. With interest rates
perpetually at rock bottom, equities
are generating by far the best income
among the main asset classes.
19
NEWS
cityam.com
Incoming Mexican leader Enrique Pea Nieto was elected after promising to cut food prices
Knight Frank says best London
property thriving despite dip
Prime central London average residential price change
2010 2011 2012
-3
0
3
9
12
15 %
12Monthchange
3Monthchange
The collapse of Lehman, whose
chief exec was Dick Fuld, began
a four-year long credit crunch
SPORTING legends Sir Ian
Botham and Darren Clarke teed
up a global gathering of the
celebrity and business elite at the
Archerfield Links in Scotland to
take part in a golfing charity
fundraiser raising over
500,000 for charity.
The Pro Am invitational, which
raises money for Botham and
Clarkes charities, Beefys
Charity Foundation and The
Darren Clarke Foundation, saw
a wealth of talent from the busi-
ness and sporting world mingle
over two days to raise money for
the two charities. Richemont
global chief executive Johann
Rupert, billionaire Ernesto
Bertorelli and Irish business
tycoon Dermot Desmond were
among many out in force to
represent the business world. Players
also included sporting greats Shane
Warne, Michael Vaughan, Kenny
Dalglish and Jamie Rednapp. Out on
the green, talk veered from golf to
cricket, with Botham on hand to give
his cricketing insights.
Got A Story? Email
thecapitalist@cityam.com
20
cityam.com
cityam.com/the-capitalist
THECAPITALIST
WIN CHAMPAGNE
SPOT THE CITY LANDMARK
THERE are only a few weeks to go until St Johns
Ambulances flagship black-tie City quiz evening,
The Game, on 24 October, which will be raising
funds for the life-saving work of the charity. All
proceeds from The Game will support Teach the
difference, SJAs campaign to equip an entire
generation with first aid skills. To book a table,
please contact game@nhq.sja.org.uk or call 020
7324 4173.
And to get you in the mood were asking you to
identify famous City landmarks, with one
successful entrant each week winning a bottle of
champagne. To enter, just email to
win@cityam.com what you think the famous city
landmark in the picture is. To help you, theres a
clue. One of the buildings pictured is the fictional
home of Poirot.
Last week's lucky winner was Lawrence Robbins,
associate director of Lapithus Servicing in
Bishopsgate.
Clubbing together for charity. Top, L-R: Dermot
Desmond, Robert Muse, Robert Hissom, Rob
Hersov, Eric Watson. Above, L-R: Johann
Rupert, Jeremy Ord, Sir Ian Botham, Rob
Hersov. Right, L-R: Aberdeen Asset
Managements Martin Gilbert, City A.M.s
Lawson Muncaster and Andrew White.
Botham and Clarke club up for
two day charity golfing feast
Mobile advert
growth slow as
phone use rises
ADVERTISING agencies are reluctant
to invest in mobile adverts despite the
increasing numbers of people using
smartphones and tablets, figures
released today show.
Data from media trade body the
Association of Online Publishers (AOP)
has found that despite 87 per cent of
publishers receiving more than a fifth
of their traffic via mobile, less than 29
per cent receive more than a fifth of
ad revenue from mobile sources.
The AOPs figures will worry
publishers, who are failing to see
reduced advertising revenues from
lower print circulations offset by
increased digital ad sales. Despite the
increase in mobile phones as a way of
browsing the internet and reading
news, advertisers are concerned about
how to reach people on a smaller
screen.
More than half of publishers
surveyed by the AOP said that agency
attitude towards mobile ads were
hitting revenues while a third were
concerned about the size of the
mobile audience.
Another concern for publishers was
the wide fragmentation in mobile
devices different models and
operating systems on phones with
72 per cent saying fragmentation was
affecting growth in digital publishing.
Mobile advertising is seen as the
worlds fastest-growing marketing
platform, with global agencies WPP
and Omnicom making big-money
acquisitions of digital firms this year,
and French advertising giant
Publiciss 416m (332) acquisition of
Dutch digital marketing firm LBi.
CNBC
COMMENT
KAREN TSO
THE chief executive of Zhejiang
Geely-owned Volvo Cars suffered a
mild stroke last week and will take
sick leave for the next month, the
company said in a statement
yesterday.
Stefan Jacoby, 54, was placed
under medical supervision and has
already started the recovery process,
the firm said.
I was lucky that it was a mild
stroke, Jacoby said in the state-
ment. I am currently experiencing
limited movement abilities in my
right arm and, to some extent, also
in my right leg. I have started to
recuperate and already notice cer-
tain improvements.
He said he would focus on resting
and exercising with the hope of get-
ting back to work as soon as possi-
ble.
Jacoby spent most of his profes-
sional career at Volkswagen and has
served as head of Volvo Cars since
2010.
Jan Gurander, the companys chief
financial officer, is serving as acting
CEO during Jacobys absence.
Chief of Volvo
Cars on leave
after a stroke
BY CITY A.M REPORTER
21
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AD FIRMS RELUCTANT TO SPEND ON MOBILE
agencies attitude towards
mobile advertising
dependency on low yield
ad networks
sales skills inhouse
creation of interactive ads
size of audience
formats and reporting
available inventory
measuring return on investment
di culty of measurement
ads included as part of print
advertising deal
other
55%
52%
38%
34%
31%
28%
28%
14%
10%
7%
3%
THE MAIN INHIBITORS TO REVENUE GENERATION FROM MOBILE
87%
55%
203m
of publishers receive at least a fth of trafc via mobile,
but only 29% have more than a fth of ad revenue from mobile
UK spend on mobile advertising last year, which is expected
to double this year.
of publishers believe advertising agencies are holding back growth,
with one in three believing audience size is an issue.
F
EDERAL Reserve chief Ben
Bernanke took aim at the
housing market this month,
saying it was one missing piston
in the economic engine.
The Case-Shiller Home Price Index
tomorrow will be the economic
equivalent of a peek under the US
bonnet at the start of the third quar-
ter, with some wondering if the hum
of activity has started up again.
The much-watched housing index
heralded the first positive annual
growth rate since the summer of
2010 last month.
HOUSING NEWS MAY BE FALSE START
But some fear housing is suffering
another false start: finer detail of
the report showed challenges for
six cities, including Atlanta,
Chicago, Las Vegas, Los Angeles,
New York and San Diego.
The on-going housing struggle is
about the one thing economists
agree on and its why even some of
those fiercely opposed to QE3 are
less critical about one aspect of the
Feds programme pouring $40bn
a month into mortgage backed
securities purchases (MBS) until
infinitum (though of course plenty
of sceptics of this policy do exist).
Take Fed hawk Richard Fischer,
who dissented three times on
further stimulus while a voting
member of the Feds interest-rate
setting board last year. The Dallas
Federal Reserve Bank President
joined those last week wishing the
housing market Godspeed.
The programme could help
offset some of the drag from
higher government-sponsored
entities fees that have been
recently levied, will likely lower
the spreads between MBS and
Treasuries and should put further
juice behind the housing market,
said Fischer.
But few fund managers believe
housing will squeeze out benefits
in the interim even if spreads
between treasuries and mortgage
rates continue to narrow.
The majority view is that its not
borrowing costs that are the
problem but the credit criteria of
lenders and the forced
deleveraging of households.
Main street is at least putting on
a hearty faade lately. The
University of Michigan Consumer
Sentiment Index this month
produced the best reading since May
and prior to that all the way back to
the recession in October 2007.
Tomorrow gives us another update
on the strength of the wallet as the
election and fiscal cliff approach.
US HEADLINE GROWTH IS ENVIABLE
On this side of the world, wed also
happily trade the US for its head-
line growth rate on Thursday. US
second quarter GDP will likely
climb to a upwardly revised annu-
alised 1.6 per cent.
But the thorny state of affairs in
the stop-start manufacturing sector
could spoil the economic picture
and pierce the QE3 bubble.
Out of all the data that deserves
our attention stateside this week,
the most important is August
durable goods. This forward
indicator of industrial production
and capital spending could slump
to -4.1 per cent, and RBC is
clenching for a 7 per cent tumble.
Durable goods a month earlier
rose 4.1 per cent but stripping out
the transportation sector orders
were flimsy, falling 0.4 per cent.
The trend by the core measure has
been down four out of five months.
Its this lack of business
investment by corporate America
that bodes ill for future US growth.
STOCKS JOYRIDE MAY BE NEARLY OVER
Those that kept riding the US stock
market to multi-year highs last
week on a giddy Fed stimulus train
might stop at the station and revis-
it fundamentals. Perhaps the real
data will count again this week, if
only for a moment.
Karen Tso is an anchor for Squawkbox
Europe on CNBC
We will soon find out whether Americas recovery is real
BY JAMES TITCOMB
22
NEWS
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RBC Wealth Management
The wealth management
division of the Royal Bank of
Canada has announced two
appointments to the Americas
desk of its UK private client
wealth management team.
Shehreen Quayyum joins as a
director from HSBC Private
Bank, where she was an
associate director in its
international team. She has
also worked for HSBC Bank Canada. Jaime
Zuloaga joins as a director
from Barclays, where he was
business strategy director in
its ultra high net worth and
family offices unit.
Bayside Capital
The credit oriented
investment firm has
announced two appointments
to its London team. Ahmed
Hamdani will lead Bayside
Capitals non-corporate distressed
investment team. He was previously a
portfolio manager at Trafalgar Asset
Managers. Duncan Priston will lead
Baysides non-control distressed corporate
debt investment team. He joins from
Strategic Value Partners, where he was a
partner and head of European trading.
MasterCard
Andrew Key has been appointed head of
acceptance and market development for
the UK and Ireland at MasterCard. He joins
from Lloyds Banking Group, where he was
head of payments for London 2012. Key has
worked for MasterCard previously, and has
also held senior roles at Barclaycard.
US Bank Global Corporate Trust
Services
The trustee services division of US Bancorp
has appointed Michael Whelan as senior
vice president and head of relationship
management in its London office. He joins
from Bank of New York Mellon, where he
was managing director of its corporate and
sovereign debt business. Whelan has also
held senior roles at UBS and JP Morgan.
Halebury
Raj Koria has been hired by the alternative
law firm. He joins from Sportfive
International, the sports rights marketing
agency, where he was responsible for sales
of media rights to the Winter Olympics in
2014 and the Olympic Games in 2016. Koria
has also previously worked for Fifa, where
he was deputy head of its commercial legal
division.
WHOS SWITCHING JOBS Edited by Tom Welsh
DASHBOARD CITY
CITY MOVES
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
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LONDONREPORT
T
HE UK corporate week
begins with a busy day
today, as a raft of companies
update the market.
Dairy Crest, Manganese Bronze,
Qinetiq, Finsbury Food, Shore
Capital, A.G. Barr, Brady and
Petra Diamonds are all set to give
reports.
Tomorrow brings further compa-
ny news from Albemarle & Bond,
Close Brothers, and The Daily
Mail and General Trust (DMGT).
Wednesdays economic news
includes CBI retail sales as well as
the hotely anticpated Bank of
England credit conditions, which
should shed some light on whether
government funding for lending is
having any impact.
Topps Tiles, ICAP, Homeserve
and Dominos Pizza are also set to
give trading statements.
Thursday sees the release of the
Financial Policy Committee min-
utes, giving the latest news on
banking stability.
Corporate news for the day
includes trading statements for
Tui, Tate & Lyle and Compass, plus
interim results from Dolphin
Capital.
The week ends with an interim
report from Goals Soccer Centres,
plus a trading statement from
Thomas Cook.
Bank to update on UK lending
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Close Brothers Group PLC
17Sep 18Sep 19Sep 21Sep 20Sep
p 856
852
848
844
840
836
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21 Sep
BESTof theBROKERS
CLOSE BROTHERS
Shore Capital rates the banking
and asset management firm
buy with a target price of
840p ahead of full year results
tomorrow. The broker expects
flat pre-tax profits of 130m
and an upbeat outlook.
WILLIAM HILL
Numis has raised its rating
from reduce to hold and
its target price to 310p after the
gaming firms takeover
advances towards Sportingbet,
calling it a great deal to
expand its global reach.
HISCOX
Peel Hunt maintains its hold
recommendation and 478p
target, but thinks Hiscox
shares will rally in the short-
term due to capital returns,
and believes the insurer
justifies a premium valuation.
William Hill PLC
p 322
320
318
316
314
310
312
312.00
21 Sep
Hiscox Ltd
p 500
495
490
485
480
475
484.50
21 Sep
THE WEEK AHEAD
U
S stocks could struggle to stay
close to nearly five-year highs
this week as worries mount
about third-quarter earnings
and the market appears primed for
a pullback from recent stimulus-
driven gains.
A bevy of economic reports, includ-
ing durable goods orders, will grab
attention, particularly after the
Federal Reserve unveiled its plan on
13 September for a third round of
aggressive stimulus to help revive
the flagging US economy.
The action ignited a rally but ana-
lysts worry the US economy is in
worse shape than many had feared.
The Dow Jones and the Standard &
Poors 500 index remain close to
highs not seen since December 2007.
I
NFRASTRUCTURE hit the
headlines once again last week,
as the Confederation of British
Industry urged quicker progress
on delivering major transport
and energy projects.
This is a contentious subject, and
calls to fast-track spending in this
area are nothing new. In fact, the
government has already taken steps
to underwrite up to 40bn of
investment, on top of its already
ambitious 250bn infrastructure
plan. It is clear that headway is
being made, even though progress
on issues like aviation remains
frustratingly slow.
Viewing this debate from a
business visit to Vietnam (having
just left China) provides a unique
I
T is meant to be the great new
market that will transform the
Citys prospects. In April, London
hosted the launch of the first
renminbi (RMB) bond to be issued
outside Chinese sovereign territories.
George Osborne hailed it a
significant moment, as he declared
his ambition to see London play a key
role in the emerging offshore market
for Chinas currency. But despite the
competitive international advantage
the City enjoys, it is unlikely to
become an offshore centre for RMB
trading in the near future.
Connected only indirectly to the
onshore RMB market in mainland
China via Hong Kong Londons role
is best described as an offshore hub
rather than an offshore centre. Three
stumbling blocks limit Londons role.
Currently, a cross-border trade settle-
ment scheme is driving liquidity into
this nascent RMB offshore market. The
size of the offshore RMB liquidity pool
a financial centre can generate, there-
fore, largely rests on bilateral trading
volume. Compared with Hong Kong,
which had $283.5bn (174.2bn) of bilat-
cityam.com/forum
In 2011, Hong Kong
had $283.5bn of bilateral
trade with China in. The
only UK had $58.7bn
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.
24
HELENA HUANG
London will find it hard to benefit
from Chinese currency ambitions
eral trade with mainland China in
2011, the UKs trade with China was
only worth $58.7bn. Further, the RMB
is barely used as a trade settlement
currency in UK-China trade.
London is therefore limited by liq-
uidity concerns, even though it hosts
deposits of RMB109bn. This issue will
remain a challenge until the RMB
becomes fully convertible as an inter-
national currency. The City could per-
haps attract a significant volume of
RMB resources through its advantage
in global foreign exchange trading.
But, for as long as the cross-border
trade settlement scheme remains the
major pillar in Chinas RMB strategy,
the City must be patient.
A second stumbling block is the tech-
nical difficulty caused by the RMB
clearing system. In the offshore RMB
market, only Hong Kong is thoroughly
equipped with both the RMB real-time
gross settlement system, which allows
swift, large fund transactions, and
with a RMB clearing bank, Bank of
China (Hong Kong).
London is lacking this critical RMB
settlement system. It also doesnt have
a local RMB clearing bank. Even if the
City is in the best position to gear up
global demand, the majority of those
offshore RMB transactions still have to
be conducted via Hong Kong. As a
result, market practitioners see less
benefit in concentrating their RMB
businesses in London. Multinational
corporations can simply shift RMB
deals to Hong Kong branches (or per-
haps to Singapore). In other words,
until London has the requisite finan-
cial infrastructure, it will struggle to
be more competitive.
Thirdly, and perhaps of most con-
cern, is the differing understanding of
Beijings RMB internationalisation
strategy in the Bank of England and
the Treasury. Chinas RMB strategy is a
policy-driven process, with deep pub-
lic sector involvement. The most evi-
dent example is the role of bilateral
currency swap agreements. In
Beijings view, a bilateral agreement
between central banks has profound
implications beyond the intrinsic
value of the swap itself. It represents a
will to jointly develop RMB offshore
business at the level of officialdom.
However, the Bank of England sees
limited value in establishing a line in
currency swaps. The RMB is not yet
fully convertible, and the size of its
global offshore market is neither large
or liquid. The Bank insists that the pri-
vate sector should take the initiative. It
therefore remains very reluctant to
touch on the swap issue.
The Treasury, on the other hand, is
making great efforts to initiate policy
dialogue with Beijing and Hong Kong.
It wants to push the City towards the
front tier of the RMB offshore busi-
ness, and thereby boost the economy
through a closer relationship between
China and the UK.
While the development of the off-
shore RMB market remains contin-
gent upon Chinas financial reform
process, whether the Bank of England
and the Treasury can take collective
action will ultimately determine the
Citys future in the RMB international-
isation game.
As an offshore hub, London is still
a crucial connecting dot in Chinas
strategy, as Beijing seeks to make the
RMB a truly international reserve cur-
rency. But if the chancellors ambi-
tions are to be fully realised, these
stumbling blocks which restrict
London from growing into an RMB off-
shore centre must first be overcome.
Helena Huang is a researcher at Chatham
House, and co-author of The Connecting
Dots of Chinas Renminbi Strategy: London
and Hong Kong.
perspective.
The Asian Development Bank
estimates that investment in
infrastructure across the region
will total at least $8 trillion (4.9
trillion) over the coming decade. Of
the more than $400bn spent on
global infrastructure projects last
year, 47 per cent was in Asia.
It has been reported that Hanoi,
the capital of Vietnam, will need
$10bn investment in commuter
infrastructure over the next four
years. Commentators also expect
that Vietnam will double its
electricity output by 2015, as it
seeks to meet growing demand
from its population of 88m. But, in
order to do so, it will need to attract
investment. From roads and ports
to power generation, this is an ideal
opportunity for UK firms, with the
right expertise, to assist the
Vietnamese government as
partners on major projects.
The UK has a depth and breadth
of experience in international
financing like no other country.
Our expertise in Public Private
Partnerships (PPP) can make a vital
contribution to developing
Vietnams infrastructure. We can
bring capital to infrastructure. But,
crucially, we can also bring
technical expertise and
management across the whole life-
cycle of major projects.
The announcement in 2010 of
PPP pilot regulations in Vietnam
was a step in the right direction.
The expiry of these regulations in
2013, however, presents an
opportunity for Vietnam to
establish a comprehensive
framework to create the conditions
to attract a greater level of
international capital investment.
Next year will mark over 40 years
of diplomatic relations between the
UK and Vietnam. In that time,
relations between our countries
have strengthened and broadened.
Good progress continues to be
made towards doubling bilateral
trade to $4bn and increasing UK
foreign direct investment in
Vietnam to $3bn by 2013.
Vietnam is building for a brighter
future, and the City stands ready to
work in partnership in laying the
foundations. We can help it develop
as a financial hub, and to create the
ideal conditions for securing
investment. I look forward to
exploring how City firms can best
deploy their resources and skills in
support of Vietnams vital growth
and development.
David Wootton is lord mayor of the
City of London.
CITY
MATTERS
DAVID WOOTTON
The City should put its financial expertise at the service of infrastructure
In association with
25
The Forum is open for you to take part. Got a sharp comment on
one of todays columns? Do you have another subject you want
to share your opinion on? We want to hear your views.
Email theforum@cityam.com or comment at cityam.com/forum
Good regulation
[Re: Regulator: Ill shoot first, ask
questions later, Wednesday]
I am disappointed by your papers
coverage of the Financial Conduct
Authoritys (FCA) likely new stance. Your
coverage seems to confuse two quite
different things: first, the expected new
approach to dealing with any retail
products that are likely to cause
significant consumer detriment; and
second, the approach to dealing with
firms or individuals through the FCAs new
investigations and enforcement process.
My understanding is that Martin Wheatley,
the FCAs incoming boss, was talking
about the first issue when he made the
shoot first comment. If you were to ask
any consumer, or consumer
representative body, about whether the
old system of conduct regulation needed
to change, I suspect youd get a
resounding yes. In no other sector of the
economy are products which can cause
significant consumer detriment allowed to
be marketed and sold for years, without
any action being taken. I suspect youd
also get a yes from the major retail firms,
which want clarity and certainty from
their regulator, rather than the toxic blight
and hefty price tag that comes with
retrospective reviews of past mass sales
and restitution. And you would certainly
get a yes from the majority of
parliamentarians, who are setting the
legal framework for the FCA.
Christine Farnish, chair of Consumer Focus
TOP TWEETS
UK energy costs keep rising but we have
enough shale gas to last 150 years and drive
down the price. Fracking is worth the risk.
@DealJungle
Hopefully the new Bank of England
governor will be more accountable. Sir
Mervyn King generally avoids the media.
@asentance
David Cameron is now set to borrow more in
five years than Labour did over a full 13
years.
@EOboys
So our independent Bank of England chief
has endorsed abandoning the deficit plan.
Consider the can well and truly kicked.
@RyanCPS
Is Sir Mervyn King right to excuse failure to
meet deficit targets on economic problems?
YES
Augusts borrowing figures were a little better than expected, but
the seriousness of the UKs public finances remains plain to see.
Stripping out one-off factors shows that, so far in 2012-13, the
deficit is running at 2.6bn per month higher than last year,
leaving George Osborne struggling to achieve his aim of bringing
down debt as a percentage of GDP by 2015-16. These trends are
not a failure of the government to carry out cuts in spending, but
because the sluggishness of the economy has impacted on tax
receipts. Both income and corporation tax inflows are running at
levels below a year ago. At times like this, fiscal policy treads a fine
line. It is imperative that government borrowing does come down.
But, in times of stagnation, additional austerity can be
counterproductive, squeezing demand further and forcing the
deficit higher.
Philip Shaw is at chief economist at Investec.
Philip Shaw
NO
Eamonn Butler
If you are deep in debt, the first thing a debt counsellor will make
you do is cut up your credit cards. If you keep adding to your debt,
there comes a time when your creditors demand immediate
repayment and nobody will give you any credit to tide you over. It is
no different with governments. Right now, people are willing to lend
to the UK government because they have nowhere else to put their
money that looks even remotely secure. If the UK starts to look
shaky, that money will simply fly elsewhere, and we will be really
stuck. The government must balance its books. It should not do this
by raising taxes, which are cripplingly high already, but by cutting its
expenditure, which has hardly changed since the crisis. To survive,
government has to live within its means like the rest of us. The
coalition must show its committment to eliminating the deficit and
then getting Britain out of debt.
Eamonn Butler is director of the Adam Smith Institute.
RAPIDresponses
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HUGH YOUNG
TEN GOLDEN RULES
OF INVESTING
Rule No. Do your own research 9
Its about being accountable for
your decisions as much as
anything.
Hugh Young is managing director at
Aberdeen Asset Management Asia.
TOMORROW: Rule No. 10 Focus on sustainable competitive advantage
I
N THE case of the medical or
engineering professions, there
is usually a precise standard
for a given procedure. In the
investment industry, while
this may be true with respect to
ethics, not following others is the
key to success when it comes to
investment decisions. Indeed, you
want to be ahead of the herd, and
this means doing your own
research. Broker research has its
uses, but it is no substitute for
doing your own analysis and
coming to your own conclusions.
A
BSOLUTE return funds aim to
deliver positive returns even
in falling markets. Unlike
other fund sectors, which are
defined by the assets they hold,
absolute return is defined by its
performance.
The sector has 24.7bn of funds
under management, about 4 per cent
of the retail fund market. However,
some experts are concerned that
they do not deliver value to investors.
They can be tricky, and should not be
entered into without proper
research.
Last year, only a third of these funds
delivered a positive return, leading
consumer group Which? to call
absolute return an unlucky finan-
cial product. Jason Hollands of
Bestinvest says that many have not
delivered on their promise of
absolute return. Patrick Connolly of
AWD Chase de Vere thinks that the
label can be misleading, and could
give a false impression that perform-
ance does not justify. Investment
Management Association (IMA) direc-
tor Jane Lowe explains that the defi-
nition is not ideal, since it was
given when the sector was young and
only a few funds existed.
Deciding whether the fund is right
for you requires a look at where there
are gaps in your portfolio. Often,
investors feel obligated to add the
fund without having sufficient justi-
fication.
BENEATH THE SURFACE
If you are considering investing in
these funds, their ambiguous defini-
tion requires a careful look beneath
the surface to see how each fund
works. Christopher Traulsen, director
at Morningstar, explains: Absolute
return funds take different risks in
different sectors over different time-
frames the only thing that the
funds have in common is that they
try not to lose money.
Absolute return funds vary in what they
try to achieve, writes Yogesh Chandarana
1 Terms and conditions apply. Visit our website for full details. 2 We will process your refund within 30 days of receiving proof of the transfer costs imposed by your previous broker. *Lines are open 7.3020.30 Monday-Thursday, 7.3018.00 Friday and 9.0014.00 Saturday. 0808 calls are free from
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Morningstar has split the sector into
18 sub-sectors, with each fund
described by their objective and risk
characteristics. The top 10 performing
funds over the last three years span
seven different categories, highlight-
ing the variation in their strategies.
According to Morningstar, the top-
performing fund over the last three
years is the Absolute Insight Credit
B1p GBP fund. It returned 56 per cent
using a debt arbitrage strategy, which
aims to take advantage of differences
in the price of debt securities. In con-
trast, Odeys UK Absolute Return
fund, which is ranked second, uses a
long/short equities strategy, allowing
the fund to profit when the stock
market goes up or down. It has
returned 50 per cent over the last
three years. The rest of the top 10 is
made up of other strategies including:
multi-strategy funds, which use a vari-
ety of approaches; flexible allocation
funds; cautious allocations; market
neutral funds, which use hedging
techniques to avoid specific market
risks; and fund of funds, which invest
in other types of funds.
SEEKING ABSOLUTION
Absolute return funds are difficult to
compare, since they use different
benchmarks to evaluate their per-
formance: some seek to outperform
Libor, others look to outperform equi-
ty indices.
The absolute return sector is com-
plex. Sophisticated, often institution-
al investors have traditionally sought
the strategies that they employ. The
safest strategy for investors is to adopt
a super selective approach, accord-
ing to Hollands, since many funds
have short track records.
Most retail investors will have more
than sufficient diversification
through their holdings in cash, equi-
ties, fixed income and property. The
sector is more appropriate for those
who have large portfolios and are
seeking to add another level of diversi-
fication.
However, due to the differences in
the types of funds, all investors should
look under the surface of each fund to
check whether it would be an appro-
priate addition. Discover whether it is
doing what it says on the tin.
26
cityam.com
PERSONAL FINANCE MANAGEMENT WEALTH
Absolutely inconsistent funds
Source: Morningstar
RANK (3YR) ABSOLUTE RETURN FUND 3YR PERFORMANCE ANNUALISED RETURN MORNINGSTAR SUB SECTOR
1 Absolute Insight Credit B1p GBP 56.1% 16.5% Debt Arbitrage
2 CF Odey UK Absolute Return R GBP 50.4% 14.3% Long/Short Equity - UK
3 Absolute Insight Emerg Mkt Debt S GBP 27.5% 8.4% Debt Arbitrage
4 Cazenove Absolute UK Dynamic P1 24.4% 7.6% Long/Short Equity - UK
5 Standard Life Global Abs Ret Strat Ret 21.3% 6.7% Multi-strategy
TOP 5 ABSOLUTE RETURN FUNDS
27
cityam.com
T
HERE is always a lot of talk
about first mover advantage.
But is it overrated? The
benefits are quite clear:
being first to the market
means you may have a monopoly,
with no competition. This allows
you to charge a higher price than
otherwise. The other big benefit is
that your brand becomes strongly
associated with that product.
Customers reluctance to change
sometimes means that they will
stick to you even if new
competition arises.
However, there are also
disadvantages. Introducing a new
product to market is notoriously
difficult. Customers have to be
convinced to change the way they
are doing things. Sometimes, you
convince some of the junior or
technical people only to find that
the more senior people reject your
offering. Being first also means you
have no real knowledge of how big
the market might be. For a start-
up, chasing these uncertain sales
normally involves making a loss.
I have had companies with new
techniques and products only to
find that, once they started to
establish a market and change
peoples beliefs, new competition
entered very quickly. It is very
frustrating for a start-up to pave
the way and show what can be
done, only to find that, later, one of
the big companies comes in and
takes the market from you.
One company I had, which was
involved in scanning chicken fillets
for unwanted bones, did a lot of
work to convert suppliers from
using hand inspection to using X-
ray technology, which was
much more efficient. It
is a huge market and,
once some progress
had been made and
the suppliers started to
consider making
orders, they became
concerned about using
a small company. They
actually commissioned
some large companies to
come up with competing
technology. Even though my
company had some patent
protection, most of the uniqueness
of its product was in the software,
which is very difficult to protect.
Effectively all we accomplished was
to point out to the market the
benefits of X-ray technology.
Another company I have, which
produces high performance
microchips, achieved a very
significant order from a Tokyo
university. It was a
massive
breakthrough for
the company and
everybody was
very excited. We
assumed that this
would put us on the
map and lead to many
more orders. It had not
come easily. We had spent a huge
amount on research and
development, and the order was
done at a big discount to open up
the new market. Again, all that
happened was that a very large
semiconductor company saw this
sales activity and decided that they
wanted to move into that space.
They offered a similar product at
an extremely competitive price so
low that we suspected they were
actually taking a loss in order to
win the market away from us.
In both of these cases I have
actually regretted being the first
mover. All it seems we did was to
open up the market for others,
with more money or a bigger
reputation.
Richard Farleigh has operated as a
business angel for many years, backing
more early-stage companies than
anyone else in the UK.
www.farleigh.com
Philip Salter talks with Mike Nolet, co-founder of the online technology business AppNexus
WHAT DOES APPNEXUS DO?
AppNexus is todays most powerful,
open and customisable advertising
technology platform. The largest
and most innovative companies in
advertising (like Microsoft and eBay)
build their businesses on AppNexus.
Were trying to establish a new stan-
dard for advertising technology, and
were leading the charge to make
online advertising a force for good.
Advertising is the lifeblood of the
internet. Its how companies make
money online, how they pay for con-
tent, and how they find new users.
AppNexus makes advertising online
more effective, which can make the
internet a better place.
HOW DID YOU AND YOUR CO-FOUNDER
COME UP WITH THE IDEA?
When we founded the company
back in 2007, it was clear that the
market was going to go through rev-
olutionary change and the industry
would need an independent tech-
nology company to support and
power this change. This is the core
behind our name AppNexus. We
thought we could build a technolo-
gy platform that would be the nexus
for all sorts of advertising applica-
tions. Five years later, our theses
about implementation have shifted
dramatically. But the core vision
remains the same.
WHAT FACTORS HAVE BEEN KEY TO
YOUR BUSINESS SUCCESS?
First and foremost -- people. Weve
recruited some of the best people
out there, from inside and outside
the industry. Second, a healthy toler-
ance for trial and error, which goes
with the territory with innovation.
Third, weve had a relentless focus
on building great technology.
HOW HAVE YOU FUNDED YOUR GROWTH?
Weve secured $65.5m (40.5m) in
funding from investors including
Microsoft, Venrock, Kodiak Venture
Partners, FirstRound Capital, Marc
Andreessen, Ben Horowitz and Ron
Conway.
WHAT ADVICE WOULD YOU GIVE ON
HOW TO SECURE FUNDING?
The first thing investors look for is a
team. Next, make sure that you
dont just have a cool idea, but
that its also something that you can
build a real business on. The past
few years has seen a proliferation of
feature not product firms, and
investors are becoming more and
Company name: AppNexus
Number of staff: 330
Job title: Chief technology officer
and co-founder
Age: 30
Born: Utrecht, The Netherlands
Lives: New York
Studied: Economics at Princeton
University
Drinking: French Burgundy wine
Currently reading: The Talent Code,
by Daniel Coyle
Favourite business book: Return on
Influence, by Mark Schaefer
Talents: All things tech. I love tech-
nology
Motto: Not sure I have one
Heroes: Any entrepreneur who
has managed to change the
world in some way. This
includes Bill Gates and his
work on philanthropy,
Steve Jobs and the
iPhone, and so many
more.
First ambition: To be chief
executive (not quite there
yet)
Awards: Ernst & Young
Entrepreneur of the Year, 2012
ENTREPRENEURS
Being a plucky trailblazer can leave you spitting feathers
MIKE NOLET
more wary. Last, be both patient and
humble. If no one is biting, its likely
theres something wrong with your
business case. Embrace all feedback
you get. It will give you a great sense
of where you need to adjust your
plan to be able to secure funding.
WHAT ARE THE DIFFERENCES BETWEEN
NEW YORK AND SILICON VALLEY?
New York is a lot more grounded
than Silicon Valley. Silicon Valley is
turning into a hype hub of yet
another social-related start-
up, where few have real
business models and
failure has become too
accepted. In online
advertising
specifically, New York
has been thriving
because its the hub
for US media. Online
advertising start-ups
in New York have
easier access to
publishers and
agencies, giving them
more immediate
feedback on innovations.
That said, New York is not
yet the size of Silicon
Valley. Engineering talent
is scarce, especially talent
that has been through it
before. We find ourselves
recruiting very heavily from
the West Coast -- trying to
find those engineers who
secretly wanted to be in
New York but moved west
because of the
opportunities in Silicon
Valley.
WHAT ARE APPNEXUSS
PLANS FOR THE FUTURE?
We are focused on
building a great, inde-
pendent company. Our
growth suggests were
on track to become the
biggest, independent ad tech-
nology company.
WHAT ADVICE WOULD YOU OFFER TO
PROSPECTIVE ENTREPRENEURS?
People. People. People. Hire the
best, find the best. Spend your
life recruiting. After that, stick to
it. AppNexus went through
many ups and downs. At cer-
tain points, it wasnt clear that
we were onto the right thing. But
we stuck to our vision (although we
were flexible on implementation)
and its paying off now.
CV
Mentors are vital
for entrepreneurs
of a SERIAL
ENTREPRENEUR
RICHARD FARLEIGH
CONFESSIONS
INNOVATION
DIARY
PHILIP SALTER
A
T THE recent Made entrepreneur
festival in Sheffield, business
and enterprise minister Michael
Fallon announced that the
Mentorsme online portal
which connects mentors and mentees
has over 22,000 accessible mentors.
Thats an awful lot of knowledge on tap.
Setting up a business involves serious
trials and tribulations. So speaking with
someone who has come out the other
side can make all the difference.
Caroline Stanbury, founder of luxury
website Gift Library, says my mentors
advice and guidance was invaluable. I
had strong experience in the luxury
sector but had never set up my own
company. Stanbury says one of the
most helpful people for her was Brent
Hoberman co-founder of
LastMinute.com. Five years on she still
speaks to Hoberman, and his advice is
always valuable: Every entrepreneur
needs a mentor, she says.
Charlotte Knight, founder of GNOSH,
thinks every entrepreneur should have a
mentor. She has worked with Robert
Leechman, former global chief customer
and commercial officer for Coca-Cola.
He has brilliant business contacts and
over 30 years industry experience says
Knight, which she believes will help
develop the companys brand.
Zoe Jackson, founder of Living The
Dream, thinks that as an entrepreneur
you can get too partial to the business
youre starting. She says that having a
mentor helped her to objectively identify
strengths and weaknesses. Priya
Lakhani, founder of Masala Masala,
guided me in re-evaluating my long
term strategy, looking at it with a
different perspective to make it the best
it could possibly be, she says.
As Eze Vidra, head of Googles Campus,
explains: Mentorship is invaluable to
successful entrepreneurs. Often, the
difference between success and failure is
taking the priceless guidance of
someone further down the track than
you.
Twitter: @Philip_Salter
A pioneering approach
to internet advertising
Antarctica is a mysterious, icy
The Antarctic may seem like a desolate expanse, but Lisa Young
discovers it is also hauntingly beautiful and teeming with life
LIFE&STYLE
28
cityam.com
TRAVEL
T
HE Antarctic tundra is a black
and white world, except for the
occasional colourful beak,
feather, foot or fin, or the blue
ice and turquoise underbelly of a
whale. While it is certainly remote
and desolate, it is also pure and
peaceful: it makes you feel alive.
From October to March, there is no
night in Antarctica, just 24-hour day-
light. Its when the Antarctic winter
gives way to the sun and the animals
return, looking fatter from months of
feeding in northern waters.
The air temperature in summer aver-
ages between 0C to 5C and its by far
the best time to see wildlife. And, with
so much daylight, there is plenty of
opportunity to look out for it.
My journey starts in the port of
Ushuaia, in Argentinas far-flung
region of Patagonia. Its the departing
point for most vessels setting sail for
the Antarctic Peninsula.
Im travelling with Aurora
Expeditions, an Australian company
that specialises in small-group Polar
exploration. Its not a luxury cruise,
but an adventure expedition. I chose
Aurora because I didnt want to travel
en-mass, never getting to know the
names of my fellow passengers and
crew.
The Polar Pioneer has an open bridge
policy, meaning passengers can join
Captain Aleksandr Eugenov and his
crew on the bridge any time they like,
which is a great idea, because its the
most interesting place on the ship.
I watch large passenger ships carry-
ing hundreds of souls returning from
their last tour of duty in the unpre-
dictable Antarctic waters. Our inti-
mate little ship looks tiny in
comparison. We are carrying forty pas-
sengers, including three Ukrainian sci-
entists, who well drop of at Vernadsky
research station deep in the Antarctic
Peninsula, if the ice allows. No ship has
gone that far south this season.
At 6pm, we pull out of Ushuaia and
head into the Beagle Channel. Giant
petrels and South American terns fol-
low in our wake as Tierra del Fuego
slowly slips away. We pass Puerto
Williams; according to the Chileans,
its the most southerly town in the
world.
Five hours later we are in open water.
Our latitude: 54 55S; longitude 67
13W; 12 knot winds; course 101. The
air temperature is 10C and the sea
temperature 4C.
The Polar Pioneer is a working ship.
Originally a Russian research ship, it
has been refurbished to an ice-class
passenger exploration vessel, capable
of pulling through one and a half
metre thick ice. Our Captain and his
crew are highly trained ice navigators
and most of the crew have made over
500 crossings to Antarctica.
The notorious Drake Passage,
between Cape Horn and the Antarctic
Peninsula, has a reputation for big
storms. On a good day, the Drake can
be dead calm, earning it the nickname
the Drake Lake. The crossing covers
approximately 800 kilometres and
takes about 50 hours.
Strong 14 knot winds from a previ-
ous storm are still around, but they
work to our advantage, coming from
the stern of the ship, pushing the Polar
Pioneer onwards and making it a com-
fortable crossing.
We dine together around large
tables, filling our bellies with high-
energy meals suitable for the coming
colder climes. Later, I go out on deck to
look for whales and my perseverance is
rewarded by a mesmerising display of
breeching humpback whales.
orange life-vest and a pair of ship-pro-
vided wellington boots the best thing
to wear for wading through water and
snow.
You must keep your distance from
the animals; five metres from the pen-
guins and 20 metres from the seals.
Several hundred elephant seals are
scattered across the island. The doe-
eyed, mainly male, youngsters will
soon turn into four tonnes of gas pro-
ducing, belching blubber. Fights break
out regularly. Gentoo penguins parade
along the stony shore; they are comi-
cal, almost clumsy.
At night, the ship continues south-
ward down the Bransfield Strait to the
northern end of the Gerlache Strait.
We wake in front of Enterprise Island
and scramble into the Zodiacs to
explore the area, passing alarmingly
close to huge, blue bergs. I could feel
the coldness radiating from the icy
cathedrals.
Pulling anchor, we leave Enterprise
and head further into the Gerlache
Strait to Cuverville Island, where the
Jetlagged, I wake at 3am, so I head up
to the bridge where first mate Valery
Manedov is on watch. Valery has made
over 700 voyages to Antarctica; its his
favourite place. He pinpoints our posi-
tion on the charts. We are crossing
the shelf, where the sea is 500m deep
and then it drops off quickly to thou-
sands of metres deep, he explains.
A large tabular iceberg appears, then
I spot penguins diving through the
water and a humpback whale appears
off the ships bow a definite sign we
have arrived.
Our first landing will be in the
evening, when well land at Elephant
Point, on Livingstone Island in the
South Shetlands. A fortress of drifting
icebergs and humpback whales guards
the island.
To get to shore well be using Zodiacs,
a rigid inflatable boat that carries
around 10 passengers. Quality thermal
clothing is essential to keep your body
warm in what will become extremely
cold conditions. On go the ski pants
and jacket, topped with my bulky
Top left: Ushuaia in
Patagonia, Argentina;
below left, the boat as it
cuts through the icy seas;
right: the Antarctic glaciers;
far top right: a whale
belches a cloud of smelly
gas; far bottom right: the
spectacular scenery
We have reached our furthest
southerly point at 65 15S, 16 13W.
Retreating back through the ever-
thickening ice, we head northwards
overnight to Paradise Bay and the
Argentine base of Almirante Brown.
I wake early and the ship is
covered bow to stern in a
foot of snow: its a magical
snow-filled moment all to
myself. We are about to
make our first continent
landing.
At Brown, snow cam-
ouflages the penguins
sitting on their nests;
we must be careful
not to step on them.
We plough our way
up a hill in almost
waist deep snow for
views of the bay. We
cruise the bay to see
a massive awe-
inspiring glacier,
with vast chunks of
blue ice sticking out.
Back on board we
cross the Gerlache
Strait, then enter the
narrow Neumayer
Channel. The sun comes
out as we continue along
wonderland and a visual feast
29
bay is clogged with icebergs.
The setting is nothing short of spec-
tacular. The whole place shimmers in
the sunlight and the bay looks like its
studded with uncut liquid diamonds.
Curious Adlie penguins wander close
to investigate the odd looking visitors
sporting wellington boots. Observing
penguins as they steal stones from
each other to build their nests is a
complete joy.
Throughout the rest of the day and
night we manoeuvre through the
Errera Channel on a course of 35 at
4.5 knots towards to Port Lockroy and
Jugla Point. We wake at the mouth of
the Peltier Channel, off Port Lockroy. I
add an extra layer of thermals for
warmth before leaving the ship.
A short Zodiac ride takes us to Port
Lockroy hut. In 1944 this site became
known as Operation Tabarin-Base A,
built for a secret British wartime proj-
ect monitoring German ships. It was
restored into a museum, shop and the
only public post office in Antarctica.
Visibility is limited as the ship sails
into the narrow seven mile long
Lemaire Channel. It is 0.7 miles wide at
its narrowest point and one mile at its
widest. I stand on the bridge watching
the scenery unfold. Massive edifices
emerge through the mist and snow,
towering either side of the ship. It feels
like we are entering a Norse kingdom.
It is an exhilarating and a strangely
emotional experience.
The waterway opens out, ice builds
up and large bergs with small blue
pools inside drift past. A pod of orcas
are spotted patrolling an iceberg. The
Captain circles the unfolding scene.
The orcas lift themselves onto the ice
to try and dislodge two seals that are
hugging the iceberg for safety. The
orcas fail in their mission and slowly
slip away.
Vernadsky Research Station is in
sight, but to get there we must first
break through a thick band of omi-
nous looking ice blocking the Penola
Strait. It resembles a giant, jagged jig-
saw puzzle filling the desolate land-
scape. The ship shudders when we hit
thick ice, practically stopping our slow
progress. Under pressure from the
ship, huge cracks appear and zigzag
across the ice. The ice groans, creaks
and growls until it finally splits in two.
Job done.
Our brave little ship breaks a passage-
way for the zodiacs to ferry the team
and all their equipment safely ashore.
They will be here for four months, div-
ing daily to research what is going on
under the ice.
beautiful Weddell seals, with their
curly whiskers, round faces and large
black eyes.
The following morning we wake
early to experience the Polar Pioneer
attempting to enter the caldera of
Deception Island (an active volcano),
by way of Neptunes Bellows. This nar-
row passage is being pelted by high
waves and 50-plus knot winds, making
it a gale force 10 on the Beaufort scale.
Its an exciting but tricky situation.
Our landing is cancelled and we leave
Deception Island and prepare for our
Drake crossing back to South America.
Storm warnings have been predicted
and we are in for a rough ride. Buzzing
with excitement from our spectacular
journey, we dont even think about
whats up ahead. The Drake throws up
everything it has, but it only adds to
what must be the most impressive
journey on the planet.
I love the unpredictability of
Antarctica, where things can, and do,
change very quickly. Everyone seems
to be overawed by it, its ten-times
more beautiful and spectacular than
the pictures you see in books or on tel-
evision. Its inspiring and huge and
every day it throws up something
unexpected. I love it down here and I
will return.
the Peltier Channel and Doumer
Island, to see colonies of Chin Strap,
Gentoo and Adlie penguins in abun-
dance. Skuas, a large grey bird, hovers
over nesting penguins trying to steal
their eggs.
En route to Neko Harbour and the
Melchior Islands, two humpback
whales start to follow the ship. The
Captain stops the engines. I look
down and see the whales rubbing
their huge bodies against the
ship. They dive under, only to
come up the other side to
spurt vast amounts of salty,
smelly whale snot all over us.
They play around for half an
hour or longer. A graceful
tail fluke ends the spectacu-
lar display.
We eventually arrive at
the Melchior Islands. The
sun comes out as we cele-
brate 100 years, to the day,
since Norwegian explorer
Roald Amundsen arrived
at the South Pole in 1911.
We are now on our
return journey, and manage
a few more landings at Cierva
Cove and Hydrurga Rocks a
couple of small islets in the mid-
dle of nowhere where we see
NEED TO KNOW
Aurora Expeditions: Antarctica
Aurora Expeditions Antarctica
Peninsula Springtime voyage
departs from Ushuaia, Argentina
on 30th November 2012 on board
the ice strengthened vessel, Polar
Pioneer. Prices start from
AUS$7,200 per person (4,632).
Kayaking, climbing, photography
and camping is available at an
additional surcharge. Return flights
from Buenos Aires to Ushuaia can
be arranged for an additional fee.
For further details or to order an
Antarctica brochure, please visit
www.auroraexpeditions.com.au or
email
info@auroraexpeditions.com.au.
British Airways
British Airways (ba.com, 0844 493
0787) flies direct from Heathrow to
Buenos Aires daily, return fares
cost from 1,169 in World Traveller
(economy) and 3,566 in Club
World (business), including taxes
for travel in November.
Buenos Aires
Passengers spending a few days in
Buenos Aires can book
accommodation through Journey
Latin America.
Contact: 020 8747 8315,
www.journeylatinamerica.co.uk
30
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QUICK CROSSWORD
WORDWHEEL
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ACROSS
1 Ecstasy (5)
4 Assigned to a
station (5)
7 Example, instance (4)
9 Magic word used
in a spell or in
conjuring (11)
10 Marked with spots (6)
12 Held back, retained (4)
13 Small island lying
to the east of
Guernsey (4)
14 At an angle (6)
17 Hate coupled with
disgust (11)
20 Payment by a tenant
to a landlord (4)
21 Fourth letter of the
Greek alphabet (5)
22 Ms Parton,
songstress (5)
DOWN
1 Lacking taste
or avour (5)
2 Less than the
correct amount (5)
3 Pouch (3)
4 Plot of ground
in which plants
grow (3)
5 Field of study (7)
6 Passed out playing
cards (5)
8 Sedimentary
rock (9)
11 Violent
disturbance (7)
13 Burn with steam (5)
15 Bingo (5)
16 Fop (5)
18 Lyricist, ___
Gershwin (3)
19 Added to (3)
E
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S
N I
A
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R

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M A M B A P A N D A
U O Z R I
S J E T S T R E A M
S T O L E O D
E S C R E W E
L A K E H H E M S
P W R O T E U
I H A A R O N
C A P E V E R D E D
R R O A A
T Y P E D T E R S E
5 9 8 9 5 9 8
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The nine-letter words were
LUSTERING and RESULTING
WBO lightweight champion Ricky
Burns has targeted topping the
bill in Las Vegas after on Saturday
clinically stopping Kevin Mitchell
in four rounds in Glasgow.
Promoter Frank Warren has
already spoken of the possibility
of a monster fight with
compatriot Scott Harrison but
Burns, who will fly to Vegas this
week for a holiday with his wife
Amanda where he hopes to
spar with Floyd Mayweather,
has already set his sights
significantly higher.
Ill need to find out if Floyd
Mayweather is around and, if he
is, Ill try to meet up with him and
get some stuff signed and maybe
have a couple of rounds with him
while Im there, Burns said.
My holidays there have never
been during big fight weekends
but boxing there is definitely
something Id like to do.
Theres more to come from me
and the better the guy in front of
me is, the better Ill be.
The result was a
disappointment for the talented
but game Mitchell but Warren
also said that there was no reason
why he could not recover from
the defeat.
The 2008 Olympic bronze
medallist Tony Jeffries,
meanwhile, has announced his
retirement because of incurable
injuries to both hands. My boxing
career is officially over, he said.
ENGLAND captain Stuart Broad
leapt to the defence of his team
after they were destroyed by India in
yesterdays World Twenty20 tie.
Broads men had already
qualified for the Super Eight stage,
yet their prospects of winning the
tournament appear fragile after
they failed to cope with Indias spin
and were dismissed for just 80 runs
in Colombo.
India won by a
resounding 90
runs, having
reached 170 for 4
in their innings.
Yet Broad
remained upbeat
about his sides
prospects. Ive seen the
guys play spin
extremely well,
certainly in
training, Broad
said after the
game.
Weve been
learning in Sri
Lanka and we've developed
wellWeve had a really
bad day but it doesn't
affect our destiny.
We played across
the line a bit too
much whereas
against
Afghanistan we
struck the ball
so straight and
very cleanly
you learn
from your
mistakes, and
well certainly
bear that in
mind when
we come across a wicket like
that again.
England brought in seam-bowler
Tim Bresnan in place of spinner
Samit Patel, while India fielded a
spin-heavy attack. The Asian sides
tactic paid off, as Harbhajan Singh
recorded a superb four wickets for
just 12 runs, and fellow spin-bowler
Piyush Chawla took two wickets for
just 13 runs.
Indias innings had not been
plain sailing, after Irfan Pathan was
dismissed by Steven Finn for just
eight runs.
Half way through their innings,
India lost Virat Kohli to a clever ball
from Englands own spin expert,
Graham Swann, and appeared to
be struggling on 81-2.
Yet Rohit Sharma scored a
half century, ending on 55 not
out and leading India to a
strong total. Captain MS
Dhoni, who only scored nine,
nonetheless saw his side put
out 51 runs in their final four
overs of the match.
And once they got their
hands on the ball, India
were ruthless, taking
advantage of the spin-
friendly conditions.
Wicket-keeper batsman
Craig Kieswetter did his best
to hold the team together,
yet Alex Hales, Luke Wright,
Eoin Morgan and Jonny
Bairstow were all dismissed
for single figure scores.
Broad himself was
dismissed by
medium-fast
Ashok Dinda as
England were
all out in
just 14.4
overs.
SARACENS unbeaten start to the
new Aviva Premiership season
ended at the hands of Exeter and
director of rugby Mark McCall
admitted indiscipline cost them
dear in the 14-12 loss.
Sireli Naqelevukis second-half try
and three penalties from Ignacio
Mieres gave the Chiefs victory as
Owen Farrells 12-point haul was
only good enough for a losing bonus
point for Saracens.
For Sarries, captain Kelly Brown
and Chris Ashton received yellow
cards, the latter moments before
Naqelevukis score for reckless
charging, and McCall conceded such
penalties were fatal.
I think the fundamentals let us
down. We gave a lot of penalties
away and our yellow cards and our
penalty count just werent good
enough, he said.
Exeter did the right things at the
right times and I think we were
guilty of doing the wrong things at
the wrong times too much.
Wasps were the only London club
not to record victory during round
four as Gloucester proved just too
much at Kingsholm winning 29-22
Aviva are proud to be title sponsor of
Aviva Premiership Rugby one of the
world's leading rugby union competitions.
Each season will feature 135 games, which
will be watched by 1.7 million people live
at the grounds visit
www.premiershiprugby.com
IN BRIEF
Brits disappoint on the road
n CYCLING: Britains Jonathan Tiernan-
Locke could only manage a 19th place
finish in yesterdays world road race.
Philippe Gilbert, of Belgium, won the
race.
Pakistan dismiss New Zealand
n CRICKET: Pakistan began their World
Twenty20 campaign with a 13-run
victory over New Zealand in Sri Lanka
yesterday. The result does not stop New
Zealand qualifying for the Super Eight
stage.
Former boxing king shot dead
n BOXING: Former WBO heavyweight
champion Corrie Sanders was shot dead
in South Africa over the weekend. The
47-year-old had been attending a
birthday party in Pretoria when an
armed robbery took place.
A dejected Lewis Hamilton suffers his third retirement of the last five races, having led the Singapore Grand Prix from the start
BY JAMES MARTIN
BRITAINS Lewis Hamilton refused
to give up on his championship
hopes last night, despite admitting
that he was heartbroken when his
car broke down in the Singapore
Grand Prix.
Hamilton, who started the race
in pole position, was leading
comfortably before his McLaren
suffered a gearbox problem and
forced him to retire from the race.
Fellow countryman and McLaren
team-mate Jenson Button survived
an accident-packed race to finish
second behind Red Bulls Sebastian
Vettel, who won in two hours and
26 seconds. Ferraris Fernando
Alonso completed the podium and
now enjoys a 52 point lead over
Hamilton.
Its heartbreaking not to have
finished the race today we
definitely had the pace to win this
weekend, Hamilton said.
Obviously, I was disappointed,
but the good thing we can take
away from this weekend is that we
have extremely good pace. As a
result, I think we can really attack
in the next few races.
While Hamilton admits that it
will be extremely tough to close the
gap on Alonso and Vettel, he said:
Ill never give up. There are six
more races, and I need to go and
win all six. Ill fight until the end.
Hamilton enjoyed a clean start to
the race, while Vettel overtook
Williams Pastor Maldonado almost
immediately. Hamilton maintained
the lead but on lap 22 was forced
into retirement.
The race was twice disturbed by
crashes, yet Vettel was unperturbed
and maintained his lead in
convincing style.
Alonso leads the championship
on 194 points while Vettel now
moves up to 165. Lotus driver Kimi
Raikkonen, who finished sixth, is
on 149 points, with Hamilton
remaining on 142
BY JULIAN HARRIS
England
Twenty20 captain
Stuart Broad was
out for three runs
32
SPORT
cityam.com
McCall calls for Saracens
to tidy act up after loss
Heartbroken Hamilton refuses
to give up on championship
Broad remains
upbeat despite
England failing
to manage spin
BY JULIAN HARRIS
Burns wants bright lights
of Vegas after Mitchell KO
BY DECLAN WARRINGTON
SPORT
33
cityam.com
Results
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LIVERPOOL manager Brendan Rodgers
hailed yesterdays tribute to the 96 fans
killed at Hillsborough in 1989, yet could
not hide his frustration after a fiery
derby ended in a narrow defeat to rivals
Manchester United.
Both clubs honoured the
Hillsborough victims before the match,
while the game itself was more frac-
tious with Liverpools Jonjo Shelvey con-
troversially sent off late in the first half
a decision strongly criticised
by Rodgers.
Liverpool took the lead through cap-
tain Steven Gerrard immediately after
the break, yet a superb equaliser from
Rafael da Silva and a late Robin van
Persie penalty saw the 10 men lose all
three points.
I thought the best team lost,
Rodgers complained after the match.
Of what we could control I thought
the players and performance level was
outstanding [but] what we couldnt
control were decisions by the referee.
If Shelvey gets sent off for having
both feet off the ground then Evans has
to get sent off for that as well.
The new Liverpool boss, who has lost
three of this seasons opening five
Premier League games, was unhappy
with many of referee Mark
Halseys decisions.
I thought [the red card] was very
harsh and that was how it was through-
out as a number of poor decisions went
against us. The penalty was never a
penalty It was one of the those days
where we never got any decision which
could have helped us at all and when
you lose a man you need some help.
Yet Rodgers was also quick to praise
both clubs and sets of fans for their role
in commemorating the Hillsborough
disaster. Yesterdays game was the first
at Anfield since the Hillsborough
Independent Panel absolved Liverpool
fans of any culpability in the tragedy
and exposed an establishment cover-up
that had obscured much evidence for
over two decades.
It was an opportunity for the club to
pay tribute to the real heroes, which are
the families and survivors and all the
people involved in Hillsborough, so I
thought it was really touching,
Rodgers said. And both clubs deserve a
great deal of credit and obviously the
supporters [too]it was good that both
clubs respected it.
Once the game kicked off, Liverpool
enjoyed the lions share of possession
and appeared in control, preventing
United from registering a single shot on
goal in the first half.
Yet after 39 minutes their prospects
were dented as Shelvey and Uniteds
Evans slid in for a 50-50 ball. Evans got
there first and was caught by the
Liverpool midfielder, leading Halsey to
wield a red card.
A livid Shelvey swore at Uniteds Rio
Ferdinand as well as manager Sir Alex
Ferguson; the midfielder later apolo-
gised for his outburst, although insisted
that he should not have been sent off.
But just seconds into the second-half
Liverpool reversed their fortunes by tak-
ing the lead. Substitute Suso combined
with Glen Johnson on the wing and
Gerrard brilliantly controlled the cross
on his chest before volleying in with his
left foot.
The game appeared to be heading for
a draw until 10 minutes before the end
when Antonio Valencia went on a
storming run and was adjudged to have
been fouled by Johnson. Summer sign-
ing Van Persie drilled the resulting
penalty in with his left foot to steal the
three points.
The North West rivals marked the recent publication of evidence that vindicated 23 years of campaigning over the 1989 Hillsborough tragedy in which 96 visiting supporters lost their lives
Rodgers hits out at ref after
Reds fall to latest league loss
LIVERPOOL .................................1
MANCHESTER UNITED................2
BY JULIAN HARRIS
PREMIER LEAGUE
TOTTENHAM manager Andre Villas-
Boas praised his players spirit and
desire after they fought back from a
goal down to secure their first home
win of the season.
QPR striker Bobby Zamora gave his
side a 33rd-minute lead after the
first-half humdrum of the home side
had allowed Mark Hughess team to
control play but a half-time rethink
from Tottenham coupled with a
deflection from Alejandro Faurlin
and a finish from Jermain Defoe
provided two goals in two minutes
to inspire the win that had previously
looked so unlikely.
We have wanted this home win for
some time but for whatever reason it
has escaped us, said Villas-Boas.
It was a good win. We showed the
spirit we have been showing in the
last couple of games.
In the second half the players
really pushed up and changed to
another level and it made all the
difference in the end. The focus and
desire paid off.
Despite disappointment at his
sides defeat, Hughes was content
with QPRs level of performance and
is confident of an imminent positive
run of results.
Overall the performance level we
are delighted with. If we can produce
that against lesser opposition, no
doubt we will get maximum points.
After a through ball from Faurlin,
Zamora lifted the ball beyond Friedel
from close range but it was the
Argentinian, under pressure from an
improved Spurs and from Steven
Caulker, that deflected in a 60th-
minute equaliser.
The home side had changed from
4-3-3 to 4-4-2 and when Gareth Bales
shot was tipped onto the bar just a
minute later, Defoe was ready to score
in an open goal for the winner.
TOTTENHAM...............................2
QPR.............................................1
AT WHITE HART LANE
PREMIER LEAGUE
Our spirit and desire was what
got us through, says Villas-Boas
NEWCASTLE manager Alan
Pardew urged Demba Ba to
continue his fine form after the
strikers third goal in two games
secured their first Premier League
win since the opening day of
the season.
That all got blown out of
proportion a little bit the
comments from his agent, said
Pardew about suggestions the
striker was unhappy at Newcastle.
I spoke to him, I think he was
misquoted on that but I also
think that Demba is a player that
will have to be rested now and
again, he cant play every game.
I hope he gets the same run [as
he did last year] running up to
Christmas. Hes an important
player for us.
Norwich manager Chris
Hughton said: To come here and
have the possession that we did,
cause the problems we did, is
testament to our side, but we
need to get that right formula
that we need to win matches.
Bas goal was a clinical finish
past Norwich goalkeeper John
Ruddy after a defence-splitting
pass from Hatem Ben Arfa in the
19th minute. Papiss Cisse missed a
first-half penalty with Newcastles
best chance beyond Bas goal.
Pardew pleads with Demba to
keep raising Newcastles Ba
NEWCASTLE..............................1
NORWICH................................0
BY SPORTS DESK STAFF
PREMIER LEAGUE
L
ETS not pretend for a moment
that the sporting world will be
watching events in Chicago this
week. The Ryder Cup will not be
reverberating around Rio or
resonating in Russia.
It will barely register in some of the
European countries or individual
states in the US that have players
involved. It will entrance and
fascinate those of us who love golf,
and the final days singles always
has the potential to provide
theatre the equal of anything in
recent weeks, but the names Rory
McIlroy and Phil Mickelson are on the
margins of global sporting
recognition at best.
Whereas the name Tiger Woods is
not. And this week offers Tiger a
unique opportunity to win back many
of those lost admirers who have
consigned him to the reject bin of
flawed geniuses who are past their
sell-by date. The sponsors who
deserted him have slowly but surely
edged their way back into his
wardrobe and current account,
but the adulation of the masses
remains elusive.
Woods attitude towards the Ryder
Cup has always been ambivalent.
Every couple of years he has given the
impression, as was said about Kevin
Pietersen recently, that he delights in
putting the i in team doing all of
us a favour by agreeing to turn up. He
signs autographs begrudgingly, gives
interviews robotically , barely
interacts with his team-mates and
seems almightily relieved when its all
over and he can get back to the
when has Europe ever been a team
anyway? Of course it has tradition,
and this time around features
probably the greatest line of players
since Samuel Ryder first had the idea
of donating a trophy for an exhibition
match between the USA and Great
Britain in the 1920s, but nearly a
century on it remains in essence,
a celebration of the sport and
the best made-for-tv sporting
event imaginable.
So in that context, now is the time
for Woods to loosen the tie and let
himself go. And by giving a little,
rekindling his love affair with the
sporting public.
Smile, Tiger. And the golfing world
might smile with you.
real business of ranking points and
dollar bills.
Yet this is the man who Rory calls
baldy and who responds by calling
McIlory shorty. A man whose friends
and associates say is great company
with a wicked sense of humour. But a
man who has steadfastly refused to let
any of us outside observers see the
real Tiger.
Now in the heat of battle, pursuing
lost glories and Jack Nicklaus record
number of majors, its
understandable that Woods keeps his
game face on from opening drive to
closing putt.
But the Ryder Cup is different. It is
a team event in a sport that barely
recognises the concept, and since
Tiger Woods, of the US, is chasing compatriot Jack Nicklauss record for major victories
34
SPORT
cityam.com/sport @cityam_sport
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The Ryder Cup is the time for
Woods to rise, relax and smile
SPORT
COMMENT
JOHN INVERDALE
In association with
Untenable...
Terry quits
England as FA
begininquest
Former captain ends international career
FORMER England captain John Terry
last night stunned the nation when
retiring from international duty on
the eve of the Football Associations
inquest into the Anton Ferdinand
race row.
The FAs disciplinary hearing was
less than 24 hours away when Terry
accused them of making his posi-
tion untenable when
announcing his immediate
retirement from the interna-
tional scene after accumu-
lating a total of 78 caps.
I am announcing my
retirement from interna-
tional football, said Terry,
who despite earlier this sum-
mer being cleared of doing so
in court is to be investigated by
the FA after allegations of racial
abuse towards Ferdinand in a
Premier League match between
Chelsea and Queens Park Rangers
last season.
I would like to thank the England
managers who have selected me for
my 78 caps. I have had great pleasure
in sharing that honour with all the
players that Ive played with.
I would like to thank them, the
fans and my family for their support
and encouragement during my inter-
national career. Representing and
captaining my country is what I
dreamed of as a boy and it has been a
truly great honour.
I have always given my all and it
breaks my heart to make this
decision. I want to wish
[manager] Roy
[Hodgson] and the
team every success
for the future.
I am making this
statement in advance
of the hearing of the
FA disciplinary charge
because I feel the FA, in
pursuing charges against
me where I have already been
cleared in a court of law, have made
my position with the national
team untenable.
I now look forward to playing for
Chelsea and challenging for honours,
and I want to thank the fans and club
for their continued support.
78
Number of England
caps won by
John Terry
35
The opponent for Ricky Hattons comeback
fight, on November 24, is expected to be
dangerous Australian Michael Katsidis
cityam.com
Chelsea captain John Terry won 78 caps during a consistent England career that began in 2003 in a friendly win over Serbia and Montenegro
New-look Arsenal have not lost a match so far this season
n June 2003: makes his debut for
England, coming off the bench during a 2-1
friendly win against Serbia and
Montenegro (Sven gave him the debut)
n June 2004: Terry is deemed to have
fouled goalkeeper Ricardo during the
crunch quarter-final against Portugal,
leading to a Sol Campbell header being
disallowed. England lose the game on
penalties, being knocked out of the
tournament.
nAugust 2006: Terry is chosen as
Englands new captain by manager Steve
McClaren, replacing David Beckham.
nJanuary 2007: The FA fine Terry 10,000
and reprimand him after he made
comments questioning the integrity of
referee Graham Poll
nAugust 2008: Reaffirmed as Englands
permanent captain by manager Fabio
Capello.
nJanuary 2010: named as the
footballer behind an injunction
that had previously stopped
the publication of an
alleged affair with
lingerie model
Vanessa Perroncel
formerly the
girlfriend of
Terrys once-
Chelsea and
England team-
mate Wayne
Bridge.
nFebruary 2010: Terry loses the England
captaincy after meeting with manager
Fabio Capello. Bridge does not make
himself available for selection for
Englands World Cup campaign, during
which the team is captained by Liverpools
Steven Gerrard.
nMarch 2011: Terry is reinstated as
England captain by Capello.
nFebruary 2012: Terry loses the England
captaincy again, due to ongoing
investigation into allegations of a racial
slur against Anton Ferdinand (below) in a
game four months earlier against QPR.
nFebruary 2012: Just days later, Capello
resigns as England manager in protest
against the decision to strip Terry of
the captaincy.
nMay 2012: Terry vows he will not quit
international football, saying: I will never
turn my back on England.
nJune 2012: Gerrard captains England
in Euro 2012 with Terry keeping his
place in the team. England lose to Italy
in the quarter-finals.
nJuly 2012: Terry is cleared at
Westminster Magistrates' Court of
racially abusing QPRs Anton Ferdinand.
nSeptember 2012: Terry starts his final
game for England in
the 5-0 win against
Moldova, yet limps
off the pitch having
picked up a late
injury.
ARSENAL manager Arsene Wenger admitted
his frustration over a series of missed chances
against champions Manchester City yesterday,
despite seeing his side grab a respectable draw
at the Etihad Stadium.
The Gunners went behind to a soft Joleon
Lescott header from a City corner shortly
before half-time, yet saved a point when
they scored from a corner of their own in the
82nd minute through France defender
Laurent Koscielny.
We are happy because we didnt lose the
game but also a bit frustrated as well because
we had early chances and late chances espe-
cially with Gervinho where we could have
won the game, Wenger said, after the Ivorian
failed to convert a series of chances through-
out the game.
But overall what happened today must
strengthen the belief of our team, he added.
I am pleased also with the quality of our per-
formance and our spirit. Also a bit frustrated
because I feel there was room to
do more.
The Frenchmans side enjoyed the majority
of possession and consistently caused prob-
lems for Citys defence. A quarter of an hour
in Gervinho was set free by an excellent slide-
rule pass from Aaron Ramsey, yet a heavy
touch saw the chance go to waste.
Arsenal continue to press yet found them-
selves behind five minutes before the break. A
David Silva corner was directed to the far post
where Lescott rose above the flailing arm of
Arsenal goalkeeper Vito Mannone to nod his
side into the lead.
City again allowed the visitors much of the
ball in the second-half, but had chances of
their own
With 10 minutes to go, summer signing
Santi Cazorla fizzed a stinging right foot drive
that Joe Hart could only just tip narrowly past
the woodwork. Yet Harts efforts were in vain,
as the resulting corner spilled for the
advanced Koscielny, who stabbed in from
10 yards.
The north Londoners undefeated so far
this season then had chances to win the
game, the best falling to Gervinho at the edge
of the area. Yet the erratic forward blasted
high and wide, leaving the sides to settle for a
point each.
City manager Roberto Mancini rued his
teams inability to hold onto the lead.
I think we need to improve our defending
at set-pieces because this has been a problem
for us this season, Mancini said.
We can do better and we need to work on
this area. We are finding it hard not to con-
cede at the moment.
Wenger admits missed chances cost Arsenal win
MANCHESTER CITY......................1
ARSENAL.....................................1
BY JULIAN HARRIS
PREMIER LEAGUE
TERRYS INTERNATIONAL
CAREER SINCE 2003 DEBUT
Whatever you think
about John Terry, he
always gave his absolute all on
the field for England. A strong
leader and great defender.
Gary Lineker (via Twitter)
If only John Terry had

used the word unten-
able when he shouted at Anton
Ferdinand.
Jeremy Vine (via Twitter)
It's a massive loss. To

replace a character who
has been in that dressing room
for such a long period and
been so consistent is very, very
difficult indeed. Ray Wilkins
John Terry retires from

international football.
Was a class defender for
England. Good luck Arsenal
midfielder Emmanuel Frimpong
(via Twitter)
WHAT THEY SAID: REACTION TO TERRYS DECISION

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