Robert Fleming Holdings remained one of the last major private investment banks left in the world, holding out for 127 years. The London-based firm does underwriting and mergers and acquisitions work as well as asset-management for wealthy individuals. The company was founded in Dundee, Scotland in 1873 by Robert Fleming as an investment trust, pooling money from Scottish investors into overseas ventures, especially in the U.S. and South America. It's said that Fleming was such an active participant in these ventures that he crossed the Atlantic almost 130 times in his life. The Fleming family has retained effective control over this firm to this day. (One well-known family member is Ian Fleming, creator of the James Bond character.) The firm moved to London in 1909.
Flemings continued to expand its international presence, starting with its expansion into Japan in 1971. Flemings was the first foreign investment bank to move into Japan, and scored another first in 1988 in Thailand. The big score, however, came in the 1970s, around the time of the Japan move. Flemings teamed with Jardine Matheson to form Jardine Flemings, a 50/50 joint venture that became one of the most powerful investment banks in Asia. Jardine Flemings spread itself all over the Asian continent, gathering business in all major markets. That strategy was profitable for many years, especially in the Asian economic boom of the 1980s. When Asian markets crashed in the late 1990s, however, Fleming Holdings took a hit. The firm was forced to approve massive lay offs in late 1998. It was surprising to some, then, when Flemings increased its exposure in the Asian markets in 1999, buying the remaining 50% stake in Jardine Flemings. In addition to increasing the firm's exposure in a market many analysts still believe is unsettled, the transaction meant a smaller stake for the Flemings family in Robert Fleming Holdings. As a result of the deal, Jardine Matheson took an 18% stake Flemings, bumping the Fleming family stake from 35% to 30%. While that is by far the largest stake, it makes it much more likely that a large pool of investors, such as Jardine Matheson and several of the institutional investors that hold a stake in Fleming Holdings, could impose their will on the firm.
Stuffy, British traditions?
As with any firm with a 100+ year old history, Flemings has an entrenched culture. The firm is said to revel in its Scottish roots, and Institutional Investor reported that the receptionist at the company's London headquarters greets visitors every Tuesday and Thursday with traditional Scottish bagpipe music. However, a century of history often means reluctance to change, which has occurred frequently in the wake of the firm's Asian losses. "In the last 18 months, we've had as many changes as we could possibly handle," company CEO William Garrett told II in October 1999. "It was a remarkable stress test." The firm cut staff and bonuses in belt-tightening moves, and Roddie Fleming was named chairman, effective April 2000, the fifth Fleming to hold that post. The corporate culture may have resulted in massive management changes in the mid-1990s, as several high- and mid-level executives left the firm, reportedly to seek more freedom in younger, less-established firms. The culture has reportedly frustrated investors as well. "The annual meetings are very old school," one institutional shareholder complained to II. "A cup of tea and a 'Don't worry, old chap.' Then you're out the door."
Loss of independence: a new chapter
In April 2000, after months of speculation and rumor, Flemings finally lost their independent tag when Chase Manhattan bought the firm for $7.7 billion. The price was said by industry analysts to be a premium for Flemings. "This begins a new chapter in Flemings history," CEO William Garrett said at the time of the merger.
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