George Osborne is perhaps best-known for cutting government spending far too quickly as British finance minister from 2010 to 2016. His imminent move to M&A boutique Robey Warshaw, announced late on Monday, shows better timing.
The 49-year-old is in many ways an odd hire for the advisory firm run by Simon Warshaw, Simon Robey and Philip Apostolides – former rainmakers at UBS and Morgan Stanley. Osborne has no experience advising chief executives on dealmaking, and his hallmark economic policy of austerity is now widely regarded as a catastrophic misjudgment.
Yet while Osborne may not be able to whip up a discounted cash flow model, there must be some transferable skills between investment banking and running a finance ministry. The late British civil servant Jeremy Heywood moved to Morgan Stanley in 2003 alongside Robey, having previously held senior roles at the UK Treasury. Peter Orszag, Lazard’s head of financial advisory, was director of the U.S. Congressional Budget Office under President Barack Obama.
More pertinently, Osborne will bring Robey Warshaw a bulging book of domestic and international political contacts. That will be handy as the firm helps clients from Vodafone to the London Stock Exchange Group deal with governments, who are become ever more involved in deals. Britain’s recent National Security and Investment Bill, for example, will massively increase state scrutiny of M&A. Governments from Italy to Germany are taking a similar tack.
From Osborne’s point of view, it’s easy to see the appeal of moving to Robey Warshaw. Over the last five financial years, the firm has generated 187 million pounds of cumulative earnings available for distribution between its three partners. On average that’s about 12 million pounds per year each –higher than many of the chief executives they advise.
He’s also joining while corporate debt is cheap, stock valuations are high and as Covid-19 reshapes many industries. That’s a recipe for an M&A boom. About $295 billion of deals were announced in January, according to Refinitiv, or 73% more than a year earlier. If he can last as long in M&A advisory as he did in politics, Osborne’s pay will be anything but austere.
– Reuters