UK: THE ANDREW DAVIDSON INTERVIEW - GUY HANDS - Nomura's money-making magician gobbles up pokey, cash-flow ...

UK: THE ANDREW DAVIDSON INTERVIEW - GUY HANDS - Nomura's money-making magician gobbles up pokey, cash-flow ... - THE ANDREW DAVIDSON INTERVIEW - GUY HANDS - Nomura's money-making magician gobbles up pokey, cash-flow rich companies as avidly as he wolfs d

Last Updated: 31 Aug 2010

THE ANDREW DAVIDSON INTERVIEW - GUY HANDS - Nomura's money-making magician gobbles up pokey, cash-flow rich companies as avidly as he wolfs down food, and workaholic deal-making for his Japanese masters has made him a reputed £40-million man, but he concedes that the art of living leaves him baffled.

Guy Hands has a problem. 'I'm trying to change,' he says, scrunching up his pudgy face and running one hand tentatively across his broadening stomach. 'I have got to get my life in balance, I know that. I'm approaching 40 and I've been told by my doctor to get my life in balance, I have been told by my wife to get my life in balance.' He pauses for effect and smiles: 'I've been told by my 12 year old to get a life ...'

He laughs but the smile becomes thoughtful and for a moment Hands looks rather vulnerable, like a schoolboy who has lost a vital bit of his train set. At times like this, I would guess, his renown as the City's premier financier - the man who works all hours and gets the biggest pay packet the Square Mile has ever seen - is no consolation. Things are coming to a head and, so far, Guy Hands hasn't found the solution.

Because this time it's not business; it's personal. If it were business, Hands, who has already made a mint for his Japanese bosses at Nomura Bank, would have it sorted before you could click your fingers. Those who have worked with him say that, in business, nothing is beyond him. He is probably, one former colleague contends, the greatest deal-maker in the world right now - ahead of anyone in America or the Far East in his financial acumen and chutzpah.

He's certainly a one-off, agrees another, and more than that, he's a little bit weird - not the smooth City ball-breaker that you expect, Daimlered and Savile Rowed, but a likeable - so long as you don't work for him - chubby, scruffy, unworldly, obsessive money-maker whose dyslexia has turned him into a strange mix of financial engineer and numerical savant. A modern-day Slater or Hanson, with a dollop of Rain Man's Dustin Hoffman thrown in. A calculating naif who can see patterns in figures that just aren't there for others, but can also run companies like he's filling in stamp albums.

He has gobbled them up - Annington Homes, AT&T Capital, Inntrepreneur and Spring Inns, Angel Train Contracts, William Hill, Phoenix Inns, Thorn - one after another, ever since joining Nomura five years ago as head of its principal finance division, startling the City with his innovative approach to investment banking: pay big bucks to buy a big business, boost it, belt it out to someone else and pocket the profit. Oh yes, and raise the dosh by securitising the cash-flow, and make sure it's a clapped-out operation that everyone else has given up hope for, and ...

No, the personal stuff is different. Since he was outed three years ago by the Guardian as the man with the £40-million pay packet - allegedly - Hands has not found real life as easy as it was. He works harder than ever, beavering away in his fifth-floor eyrie in Nomura House close by St Paul's. In at 6am, out at 9pm. But there are more rivals around, and the deals are harder to do. He hardly has time for his family, and when he's working, he can't stop eating. Savoury stuff. Indian meals. One financier remembers sitting in a meeting with Hands, and there are 15 people round the table 'and Guy is, like, ordering food for 30, and then he's eating most of it, too. That's just what he's like'.

So he's getting fatter, and unhealthier, and he and everyone else are worried about it. And he feels guilty about not seeing enough of his four kids, and he hates the rich-list spotlight, yet he knows he has to talk to the media, otherwise people will think he is some sinister Blofeld intent on worldwide asset stripping.

All he wants is a normal life in Sevenoaks like his dad, a corporate lawyer who was off on the train at eight, back before seven, and met his kids with the dog halfway home. And his best friends are telling him: slow down, draw breath, you're not going to live long if it goes on like this. But, but, but ...

Hands can't stop.

He is crouched down, pulling papers out of two cardboard crates by his desk when I walk in. That's how he works. He takes them home at night - one crate for in, one for out, and works through them, bringing them back in his dawn minicab.

No chauffeur? That's not the Hands style. He would rather go by train but it got to the stage where there were just too many confidential documents.

And in the back of a car he can keep on working. Now he is shifting the papers into the longest rack of two-tier in-trays I've ever seen on a desk. They are rapidly cleared by his secretary.

It is the morning of the solar eclipse and everyone else is sliding out, up to the roof or on to the street, to have a gawp, but Hands is working.

His office is a grey characterless box alongside the open-plan space occupied by his PFG (principal finance group) team. Hands moved in only last month, after quitting an even greyer, smaller office-box. No pictures, no decoration.

This, remember, is a man who is estimated to have earned his bosses nearly £2 billion in the past few years, and maybe had up to a tithe of that himself.

'No,' he says, 'I think if you start to put paintings up, you would begin to think you are here for ever. It might become too comfortable. In some ways I think it tempts fate.'

He stands up in his rumpled grey suit trousers and shirtsleeves, and blinks behind his steel-rimmed glasses. His mousey hair is cut in a choirboy sweep over his forehead, making him seem even younger than he is. He smiles and pootles nervously round the meeting table by the window, leaning slightly backwards as he goes, as if to balance his tum. Medium height and looking over 16 stone now, Hands has always carried a bit of weight. One old friend from university days remembers he was teased about it then, too. All those curries down Oxford's Cowley Road. Diets come and go but the truth is, Hands has never found any form of exercise that interested him. He just likes making money.

Why? Probably the dyslexia, he says. He wanted to be good at something; he has always had low self-esteem. Maybe that's where the eating comes from, too. Hands says he remembers being hungry when he was young. His parents, who had emigrated to Britain from Rhodesia, were just setting themselves up again. His father had to work through articles unpaid to qualify as a solicitor; his mother, a teacher, had to look after little Guy and his younger brother and his sister. 'We were poor as church mice,' says Hands, 'and I remember the cold of the first winter when I was three or four. We used to go to the supermarket on Fridays and I was always starving. It was quite a tough situation.'

And the effect that had? 'I think it always made me have a certain sense of the value of money.' Hence the famously unflashy Hands lifestyle: he lives in an unassuming house in a well-to-do road in Sevenoaks, Kent, he drives his kids around in a people-carrier, takes time-share holidays, flies economy with the family.

Yet making money has always been his sole preoccupation. Even as a teenager, he was working long hours in a newsagent's to raise cash. At university, he ran an art-sales business. But he did his homework, too. Despite his protestations, he clearly gained much more from conventional education (he went to the Judd Grammar School in Tonbridge, then Oxford) than most dyslexics, possibly because his mother was a special-needs teacher. He was always brilliant at maths but also loved politics and debate.

The Oxford years are important, if only because they had a profound effect on Hands' entrepreneurial instincts. He made so much money selling art - net profit £1,500 on a good week - that, while still a student, he bought a house in Nelson Street. There he rented a room to the young William Hague for a year. 'William Hague had lots of blonde girlfriends and was paranoid that I was going to get off with them,' chuckles Hands. Then he mutters. 'Probably wise.' (Another friend says the idea of Hands and Hague being great varsity Romeos is probably wishful thinking.)

But the art business eventually proved his undoing. Served with a dilapidation order on the property he was leasing for his gallery, he got a vital lesson in reading the small print of anything you sign. The lease said 'full repairing, reinstatement of condition'. Suddenly he was in the red, and had no choice but to find a well-paid City job to pay off his debts. He left university with the conviction that some things in business are best left to others. He applied to Goldmans, because he liked their non-Establishment tag. They recognised his entrepreneurial drive and made him a bond trader and left him alone - and he loved it.

Does he think of himself as an entrepreneur?

'No,' he says, 'I'm not an entrepreneur. I like rules too much and entrepreneurs break rules. I am a risk-taker but only within rules.

I just like the combination of support that an organisation gives, combined with the freedom to express myself.' Basically he likes to concentrate on what he is good at - doing the deals, working through the figures - and let others do the stuff that he hates: administration (ie reading leases), PR, man-management (at which he is terrible). 'He can be a real screamer,' sighs one who worked with him at Goldman Sachs, 'but he always apologises afterwards. There's no one in his office who hasn't been fired at least once.'

He walked from Goldmans because, he says, they had become stuffy and wouldn't back his plan to buy over a thousand pubs from Grand Metropolitan.

'They didn't think I was mad but just didn't think they could do anything for me.' They let him put the scheme to other organisations. A few were interested but he plumped for Nomura - not because it offered him the biggest cut of profits (it didn't, he says), but because it was really committed to his idea. 'They demonstrated their commitment by allowing me to buy 1,800 pubs nine months later,' he says. It proved highly profitable and Hands has repeated the trick again and again, buying Nomura the oddest businesses - betting shops, military homes, British Rail trains - securitising loans on cash-flow, extracting maximum value and transforming himself into a City celebrity in the process.

How does he do it? Hands readjusts his spectacles before answering, clearly pleased to be asked. He is not a Hanson, he says. There is no set method, just certain things he looks for. All his targets are dying businesses, written off by others, but with good cash-flow and assets. And, unlike most bankers, he moves fast. 'We sort out all the hygiene factors, get all the control and risks buttoned down, then look for the sizzle.'

The hygiene factors? What he means is just bad management. He gives the pubs as an example: 'The pub businesses were not collecting their rents properly. They had high operating costs because they were not maximising their discounts and not spending their cap-ex correctly. Analytically it was very easy to understand. You just work through them and end up with a much more profitable business on the bottom line.' He gives another plump smile.

Why couldn't the old owners do that? 'I think just because they have owned them for hundreds of years and lost the ability to tear up the sheet and start again. The people are not bad, but they have stopped questioning themselves.'

He goes on: 'Then, having reinvented the rule book, we go to the next stage, where we get the sizzle. Those ideas don't normally come from the management level but from people just below. Some of the ideas are crazy but one or two are great. We work out which ones, pump money into them, and go with them.'

But it seems bizarre. Nomura currently owns more pubs than anyone else, a huge stock of army homes and a high-street TV rental chain. Does he think people understand what he does?

'No, and that's my fault,' he says, 'because I don't spend a lot of time communicating with the staff who work for the businesses.

If I did that it would undermine the management. At the peak, we had 30,000 people working in these businesses. There was no way they could feel I was their boss. It would be wrong. My job is to work through the management.'

There's something about the way he describes it all, the boyish glee with which he runs through the intricacies, that makes it seem like some complicated game which only he has mastered. And he has. The whole of Nomura PFG, indeed the whole of his home life, too, is organised to allow him to concentrate on what he does best - analysing the figures and tapping into his uncanny feel for where the value can be squeezed out.

One former colleague says that is probably where the dyslexia plays a part. He tells the story of sitting beside Hands, conducting a negotiation to buy a company. Hands asked question after question about the numbers, never writing anything down, just going 'hmm, hmm,' to each answer, memorising it all. Then he stood up, left the room with his team, and announced there was a deal there - but only at such-and-such a price. Just get it done.

'I told him: 'You're full of shit, Guy. How can you say that?' But nine months later, we settled on that price. He was spot on. He is just extraordinary.' Sure, he concedes, Hands is probably not a balanced individual, but then how many really successful people are? The one thing he isn't, though, is full of his own ego.

Now what about that pay packet? A tenth of all the profit he makes for the bank? Not true, says Hands. That was made up by a rival's PR firm during the bid battle for the Energy Group, and it was fed to the Guardian, which simply took it as gospel.

What is his cut then? 'No comment,' he says, straight-faced.

'I didn't comment when it was first written and I won't comment now.

It's between me and God.' Then he looks sheepish. 'Well, me and some senior Japanese and God.'

Others in the City suggest it won't be as simple as a straight cut. So vital is Hands to Nomura that he will be tied in on a long-term deal that ensures he must stick around to sell the businesses he has bought and that keeps a lot of his earnings on hold, no doubt reinvested to insure against any losses - which he has to share in, too, should they arise.

Hands says he doesn't want to talk about it. Or any questions about how the fall in Nomura's fortunes worldwide has affected his ability to raise cash. Probably a lot, but he won't say. You can understand why he has had enough of people sniffing around. After newspapers ran the story about his earning power, he had hacks on his doorstep shouting at his family, a helicopter over the garden. The £40-million man! His wife hates all that now, he says. All she wants to do is protect the family.

Those who know him outside work say he is lucky to have a wife who keeps his feet on the ground. Julia, a solicitor, was his long-term girlfriend.

He was president of the Conservative Association at Oxford; she was president of the Conservative Association at Cambridge. She now runs the money he brings in. They are looking at hotels and have already put money into a new motor-racing track in the Midlands. They have also set up a charitable foundation and have a host of other schemes under consideration.

'My wife's view is that we should probably just leave the money on deposit,' says Hands, 'but with the rates having dropped, it really doesn't produce very good returns.' He speaks as if it is just a few thousand. Clearly the thought of not extracting maximum value from his earnings-Everest is too painful to contemplate.

And living a normal life just isn't easy when you are really rich, he admits. Ostentation has a habit of creeping up on you. Yes, he has a Maserati, bought when he left Goldmans, but he assures me he is too embarrassed to drive it. Then there is the new mansion, a crumbling listed building close to where he lives. It used to belong to the Churchills and had been scheduled for conversion into flats by developers. His wife didn't like the plans, so they bought the mansion and are slowly doing it up before moving in, probably sometime in 2001. Hands looks uneasy when I ask him about it.

'I quite like where we live now, actually,' he mutters, sticking his bottom lip out. But really I think part of him would like his success to be recognised: Look at me, Ma. I'm on top of the world ...

What else can he do with his money? He rarely goes out, just to a bit of opera and middle-of-the-road pop. He took his kids to see a Spice Girls concert not so long ago, but also made a point of bringing along a party of children from the Great Ormond Street Hospital. His biggest worry, he says, is how his wealth will affect his children. He doesn't want it to ruin them.

Otherwise, he has been to the cinema only once (Evita) in the past 10 years. No time, he says. He does buy wine and collects line drawings of nudes. He doesn't give to the Conservative party anymore, although he stays in touch with Hague and did contribute to Mrs Thatcher's leaving do. He worshipped her and says people should remember what Britain was like in the 1970s: the strikes, the three-day week, the food. The only good thing about the '70s, he adds, cheering up a bit, was the music.

Now he's moved on. He likes Gordon Brown and says he is 'an admirer of Tony Blair's ability to move the Labour Party forward', but no more than that. He sounds as if money has put him above these sorts of things.

Will he succeed in winding down his commitments? Probably not, say his friends, and the way PFG is structured, with its cyber-room of PhD graduates pounding the numbers, and vassal businesses posting in the figures, he cannot walk away. Everything spins round him. And the competition to do the deals is fiercer than ever, with everyone circling a finite number of targets: big-asset, cash-flow rich, non-growth companies. 'There are 14 other principal finance businesses in the UK now,' says one friend.

'He is going to find it tough to win as much business as before.' And if the market falls, his previous purchases may look very expensive.

The question is, how long will Hands stay hungry? Those who know him well say he wouldn't be happy doing anything else, certainly not politics (too socially awkward) or building his own empire (too impatient). I can believe it. At times, walking round his offices, showing me the team as we wander slowly upstairs to get his photo taken, he looks like he cannot believe how lucky he is. His cyber-room, his people, his facilities, all to play his game.

Upstairs, after the photographer has persuaded him to take his glasses off, Hands leans back against the wall, looking tired and rather dazed, clearly not happy in his own skin. He had told me his one great hobby is taking landscape photos but he is too shy to strike up a proper conversation about it with Harry Borden, the photographer. Only once does he perk up - as a Nomura waiter goes by, wheeling a trolley of sandwiches to the dining room beyond. Hands' eyes follow the food wistfully.


1959 Born 27 August in Rhodesia. Educated at Judd Grammar School, Tonbridge; Mansfield College, Oxford

1982 Joins Goldman Sachs as a Eurobond trader

1994 Managing director, Nomura Principal Finance Group

1995 Nomura buys 1,800 GrandMet and Fosters pubs for £250 million to create Phoenix Inns; pays £700 million for a third of British Rail's rolling stock, to set up Angel Train Contracts (which was sold off in 1997)

1996 Buys 57,000 Ministry of Defence houses for £1.7 billion, and AT&T's equipment leasing company in US for $2.2 billion

1997 Buys Inntrepreneur and Spring Inns for £1.2 billion, and bookmaker William Hill for £700 million (which was sold off in 1999 for £825 million)

1998 Nomura buys Thorn for £1 billion and Inn Partnership for £370 million.

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