From Bloomberg, July 3, 2019:
In the UK there’s old money, really old money and then there’s C Hoare & Co.
The London firm was started in 1672 by Richard Hoare and has tended to the affairs of diarist Samuel Pepys, poet Lord Byron and novelist Jane Austen. That’s almost a hundred years older than the famous Rothschild dynasty, which was founded in the 1760s. After more than three centuries of continuous operation, the family still runs the show, overseeing about £4.4bn ($5.6bn) of deposits and sticking to a traditional way of doing business.I think Bloomberg went with Rothschild's for name recognition. Coutts & Co. would be the competitor in the longevity race but is 20 years younger than Hoare's.
“You go in and you talk,” said Islay Robinson, chief executive officer of Enness, a mortgage broker with dozens of high-net-worth clients who have borrowed from the bank. “They lend their own money and tend to be able to come up with solutions that other banks can’t.”
The last of the 10th generation of partners retired last year, leaving the bank in the hands of six partners from the 11th generation who have continued its evolution. In March, they opened the first outpost outside London: a Cambridge office designed to serve existing clients but also attract entrepreneurs in a region known for bioscience and technology ventures.
Blending old with new has become vital for C Hoare, rival Coutts and smaller competitors such as Raphaels and Weatherbys as they vie to serve wealthy clients. Independent banks are also striving to reconcile their highly tailored services to an industry where the prevailing trends are consolidation and rising regulation.
“It’s a constant tension because part of what makes us completely different to the clearing banks is that we are smaller and more personable and more human and more relatable to customers,” partner Alexander Hoare, 57, said during an interview in a meeting room festooned with cartoons. “We don’t want to be herded and we don’t want to grow. We want to be special.”
C Hoare is certainly different. The firm is an unlimited liability partnership, meaning the personal assets of the partners are fair game for creditors. Since at least 1994, the dividend has been fixed at £50 per share or £6,000 total. That’s for a business with £26mn of profit in the 12 months through March 31, 2019.
The restraint has built a valuable enterprise. The partnership’s latest accounts show a book value of about £370mn, putting the family among the UK’s richest on paper. But the Hoares said they have no interest in selling.
“If people were in it for the liquidity event, it would have been sold a long time ago,” said Rennie Hoare, 33, who became a partner last year.
The original “golden bottle”, which marked the location of the bank before street numbers were invented, is on display in the bank’s museum.
The bank’s oldest surviving cheque, addressed to Richard Hoare from William Hale, dates from July 1676.
His ancestor Richard Hoare first started to trade at the “sign of the golden bottle” in 1672 (it took another century for street numbering to be invented). He rose to dominate the City of London, dabbled in politics and was knighted by Queen Anne.
Succeeding partners furthered this success, so many of whom were named Henry that they accrued epithets like “Henry the Good,” “Henry the Magnificent” and “Fat Harry” to distinguish them. While the family dodged the pitfalls associated with the third generation of ownership, the seventh generation’s speculative investments proved more problematic, with partner Henry Junior putting money into ventures such as a steam-engine enterprise and a company in Canada that was supposed to revolutionise the leather trade with treated hemlock, according to a family history. The collapse of his personal finances forced him to resign in 1874.
“Our seventh generation got way too wealthy and burnt through a fantastic fortune,” Alexander Hoare said. “There are two things that can destroy a family business: the business and the family, and they both have to be kept in order.”....MUCH MORE
Some previous posts:
South Sea Bubble Survivor Says Dismantle RBS Along With Lloyds
The Amazing Archives of England's Oldest Private Bank: Junk Bonds from 1863
If Britain's Oldest Private Bank Could Survive the South Sea Bubble, You Can Get Through This: More of C. Hoare & Co's Amazing Archives
Prop Trading the South Sea Bubble: Hoare's Bank 1720
For the third time our link to the South Sea Bubble paper has rotted,This paper presents a case study of a well-informed investor in the South Sea bubble. We argue that Hoare’s Bank, a fledgling West End London bank, knew that a bubble was in progress and nonetheless invested in the stock: it was profitable to “ride the bubble.” Using a unique dataset on daily trades, we show that this sophisticated investor was not constrained by such institutional factors as restrictions on short sales or agency problems
Here's the version hosted at MIT:
By PETER TEMIN AND HANS-JOACHIM VOTH
