By Steve Slater and Clara Ferreira-Marques
LONDON, April 3 (Reuters) – Britain’s financial regulator
has gone to war with one of London’s most powerful investment
bankers, Ian Hannam, a former soldier with a string of
multi-billion-dollar deals to his name and links to U.S.
generals and Iraqi ministers.
The JPMorgan banker, a former member of Britain’s
Territorial Special Air Service, a special forces unit, can be
brash, loud and divisive, but is respected for spotting
innovative deals and has top mining executives on speed-dial.
“He comes up with a good idea, goes to the chairman, and
says this is what I think. He is innovative – great at a time
when bankers run around after the same stuff, most of them
coming up with cookie-cutter deals,” said one person who used to
work with him, asking not to be named.
Hannam is behind a string of deals in mining that has
transformed Britain’s blue-chip share index, but has
also left his mark on the telecoms, media, financials and
household products sectors thanks to a 28-year career that has
taken him to some of the world’s most prestigious banks.
That reputation is now at risk.
Britain’s Financial Services Authority on Tuesday fined
Hannam 450,000 pounds ($720,000) for market abuse, a decision
the 56-year-old Briton is appealing against, though he has
resigned from JPMorgan to focus on challenging the regulator.
TRUSTED ADVISER
Raised and schooled in Bermondsey, a tough area of south
London, Hannam is not a typical senior JPMorgan banker.
His banking career began in 1984 when he joined Salomon
Brothers. He progressed through British merchant bank Robert
Fleming, which was bought by JPMorgan in 2000.
He then teamed up with Cazenove in a joint venture in 2004,
before the U.S. investment bank fully bought out Cazenove in
2010.
Hannam was angered after being passed over for the top job
at Cazenove in 2008, and one report said he sulked for two weeks
in New Zealand, turning off his phone.
But he stayed on as one of the U.S. bank’s top rainmakers,
in the role of chairman of JPMorgan Capital Markets.
His biggest deals include the merger that created BHP
Billiton and its subsequent listing to create a $180 billion
mining giant. He has advised on a string of deals for Xstrata
, helping to transform it into a commodities powerhouse.
“Ian has been a trusted adviser of mine for many years
including advising Xstrata from its inception. He has always
acted with honesty and integrity and I have greatly valued his
counsel,” Xstrata Chief Executive Mick Davis said in a statement
to Reuters.
NO ONE LIKES US
Married, with three children, Hannam lives in Notting Hill,
an expensive London neighbourhood, but still supports Millwall
Football Club, a second-tier soccer team based where he grew up.
Millwall are renowned for their chant “No one likes us, we
don’t care”, and people who have worked with Hannam said he can
prompt a love/hate relationship. Extremely hard-working, he
dislikes fools and likes others to match that ethic.
At age 17, Hannam passed the service’s tough selection
process and joined the Artists Rifles, a part-time volunteer
regiment.
While serving, he studied for a degree in civil engineering
from London’s Imperial College, graduating in 1977.
After a spell with construction firm Taylor Woodrow, helping
build roads and other infrastructure in Oman and Nigeria, he
went to study at the London Business School and in 1984 joined
the Salomon Brothers training programme in New York.
One report said he arrived there by parachuting into the
United States with a Special Air Service (SAS) unit that was
training with American special forces, and then made his way to
New York.
Almost 30 years on, he is renowned for spotting
“undervalued” opportunities in emerging markets, often bringing
them to market in London through an initial public offering or
by doing deals like the Rothschild reverse takeovers.
FTSE 100 firms he has brought to market include Vedanta
, Kazakhmys, Fresnillo and African
Barrick Gold (ABG). He advised Wellcome Trust on one of
the biggest share sales of the early 1990s, and HSBC on
its $18 billion rights issue three years ago.
The listing of ABG showed how he works. He visited Barrick
Gold’s top brass with the idea that its African
businesses were not properly valued in its current structure,
and they should be separated and listed in London, where
investors would put more value on the assets. The firm took his
advice, and ABG is now worth $2.54 billion.
Working in mining has taken Hannam to many danger zones, and
he has been active in recent years in Afghanistan.
“You need a madman or a genius – I am not sure which one he
is – but maybe you need a madman and a genius to get these
things done,” said one person who has worked with him.
He regarded Afghanistan as a resource-rich, untapped
opportunity that could supply China and India with iron, copper,
rare earth metals, and gold.
A Fortune magazine report last year said that had left a lot
of powerful people, including U.S. General David Petraeus, as
counting on him to demonstrate that the country is safe for
foreign investors.
In a profile on his efforts there, Fortune said: “If anyone
can wrest a fortune from Afghanistan’s rubble, it is this man,
Ian Hannam.”
