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2016 Open

Malik Karim: The refugee fired by Credit Suisse who's quietly breaking M&A records

10 June 2016

The receptionist at the bottom of Tower 42 repeats her instructions for the third time.

“Take the left escalator then the blue lift to 24, get out and turn right for the lift to 32 and then turn right again.” Got it.

The lifts are so fast my ears pop like the champagne corks that must have been going off lately at the offices I’m heading for.

Why the bubbles on the 32nd floor? Because Fenchurch Advisory Partners, the mergers and acquisitions boutique that resides there, has just had a record month, steering its clients through no fewer than six takeover deals.

The most recent was Axa’s high profile sale of its UK pensions and Sunlife protection operations to Phoenix Group.

But don’t feel dumb if you’ve never heard of Fenchurch. While fellow boutiques like Robey Warshaw regularly hit the news with the multi-billion megadeals they advise on, Fenchurch’s 22 dealmakers quietly ply their trade in the mid-sized market, solely for clients in financial services.

Ruling this understated power broker is as calm and modest an executive as you’re likely to meet.

He is Malik Karim, one of the most successful Muslims — alongside our new Mayor — that modern London has created.

The office is an elegant, walnut-panelled affair with a long boardroom boasting a spectacular view over the City.

Greeting me, tall Karim beams proudly as he sees me gawp through the glass.

“Not bad, eh?” he says, shaking my hand. “This was the boardroom of Credit Suisse. I started my business here after they fired me.” What? “I was fired by Credit Suisse, and when I heard they were moving out of here shortly afterwards, I moved Fenchurch in.”

It’s unusual for a successful City boss to use his sacking as an opening gambit with a complete stranger, I suggest.

“Why hide it?” he asks. “It’s a badge of honour. And it was one of the two main things that have happened in my life not of my own choosing which have turned out really well.”

The first was more dramatic. Karim spent his first 12 years in Uganda, where his father ran a café in a bus station. But the family was forced to flee when the dictator Idi Amin expelled all Asians from the country in 1972. The members of Karim’s family were among 27,000 taken in by Britain.

They spent their first year here in a series of refugee camps, he says. That sounds awful, but Karim had a ball.

“It was a lot of fun. I missed a year of school, which was great when you’re 12 years old. Every day was playday. The camps were old military bases and there wasn’t much to do, so you just did lots of sport — cricket, table tennis.”

The family settled in Leicester, where Karim became the first boy at his secondary modern school ever to get a Grade A at O-level English. Not bad for a kid who’d missed a year of education and didn’t speak the language as his mother tongue.

At his sixth-form college, the headmaster was the father of Andrew Bailey — the man now running the Prudential Regulation Authority. “Andrew and I joke about that when we run into each other,” he says.

“It wasn’t part of the plan, to wake up one day and find your family has to get on a plane and start all over again,” he adds. “But it turned out to be a good break because I was able to come to the UK and live here and be part of this wonderful country.”

He certainly made the most of it. After taking a degree and a masters in economics at Manchester University, Karim qualified as an accountant at Andersen in London before deciding on a career in the City.

He joined Kleinwort’s mergers and acquisitions team at a time the Square Mile was changing. “There had been a lot of people who had been on the classic public school-Oxbridge route. But when we had that first M&A boom in the late Eighties, the City had to expand. I was part of that wave of new people.”

After Kleinwort, he joined DLJ, one of the first specialist M&A boutiques. But in the years after it was bought by Credit Suisse in 2000, many of the DLJ-ers in London got the chop. “I was one of them,” he grins.

He could have taken a job at another bank, but wanted to try going his own way.

As Jonathan Bloomer, the former Prudential chief executive who has known him since his twenties, says: “There’s two things to remember about Malik. He was always very entrepreneurial, and when he builds relationships, he makes them to last.”

That stood him in good stead, as old clients from Credit Suisse said they would put work his way if he set up his own firm. Fenchurch was born.

Twelve years on, the business is thriving. Specialising in financial services has paid off as banks and insurers are forced by the raft of new regulations and capital requirements to sell businesses.

“Solvency II, Basel III, RDR, Mifid — you name it, all these new rules are making clients carry out a surgical examination of how their businesses make money and how much they make. The regulators are saying ‘you need to allocate more capital to this or that’ — so what looks profitable one day doesn’t look profitable the next day.”

At a time when many M&A practitioners in other sectors are expecting a quiet year, Karim says: “Our pipeline is amazing.”

When pitching, Fenchurch is mostly up against the big investment banks — Goldman Sachs, Morgan Stanley, JPMorgan. But the perception of customers is that M&A teams there are under pressure to sell other products to the client during the transaction process.

“A home run for a big bank is where every part of the chain is involved in a transaction; debt, advice, foreign exchange, derivatives, onselling of some assets and maybe even co-investing. But here at Fenchurch, we’re the antithesis of that — we just do advice.”

Standard Life chairman Sir Gerry Grimstone, who has used Fenchurch on numerous deals over the past decade, says there is another reason why Karim’s customers go to him rather than a big investment bank.

“Financial services companies do not want other financial services companies poking their noses into their affairs. But with Malik, there’s no conflict of interest. You don’t need to worry about him sticking his nose in.”

So, what next for the partnership? Two of Karim’s co-founders, Simon Yun-Farmbrough and Kevin Cunningham, are leaving the business — notices of the shake-up went out to Companies House this week.

But four more of the Fenchurch team are today promoted to the new posts of senior managing director as Karim expands his top tier.

He himself is moving from chief executive to executive chairman. Current chairman Cliff Hampton is retiring. Karim denies this is part of his succession planning — “I’m only 55!” — but he is clearly paving the way for the next stage in Fenchurch’s development.

“This is just recognising we are a much bigger and more diverse business than we used to be. You know, I feel like a grandad — some of the guys who joined us when they were young are now becoming parents. I feel like I’ve been through a sort of marriage with them.”

His actual wedding was to Azmina, who’s also from an East African family, in 1995. Like Karim, she’s an Ismaili, the branch of Islam that follows the Aga Khan.

They met in an airport queue en route to the inauguration of the Aga Khan University in Pakistan and married a year later.

The couple are now in the process of ferrying their daughter around the country to look at universities. Their son is in his final weeks at Harrow and has a place at Oxford.

Given Karim’s tough start in life, I suggest he must feel pretty darned pleased to have provided so well for his own kids.

“Actually, I’ve never looked at it that way,” he responds. “The most important gift anybody can give their children is their love and attention, and my parents gave me that in bucketloads. I aspire to give the same to my kids: I don’t care about the material stuff, and they don’t either — that stuff is just noise.”

He’s right, of course. But looking at the million-dollar view from the 32nd floor, it’s hard not to marvel at how high he’s risen since the refugee camps of his youth.

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