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Jim Slater, businessman (13 March 1929 - 18 November 2015)

jimslaterJim Slater was once the most influential figure in the City, and certainly one of the most feared. The godfather of “asset-stripping” – gaining control of a company then selling off its underperforming assets – he made and lost a fortune before reinventing himself as a children’s author. “I don’t deny asset-stripping, though the phrase is used as a smear,” he once said. “If a firm has its assets stripped it means they have not been properly used.”

Born in 1929 in Cheshire, he was brought up in Wembley, north London; his father was a builder. He attended Preston Manor County Grammar School, whose motto is “Duty before rights”. An able maths scholar, he was good at chess and collected stamps. He left school at 16 to train as an accountant, though somewhat half-heartedly. His training was interrupted  by two years’ National Service, which proved a transformative experience. “In the Army, I met many no-hopers, going nowhere. It made me realise I must get down to it,” he told Hunter Davies in The Independent in 1992.

Having passed his accountancy exams he took a job with a struggling metal-finishing firm, and when the bosses were sacked he found himself in charge. His business acumen kicked in and he turned the company round.

He moved on to British Leyland, rising to deputy sales director, but his ascent was interrupted by a two-year struggle with a mystery virus. “It made me feel I might be unable to earn a living,” he recalled. “I only had £3,000 in savings, so I began to look for an outside way of making some money.” Returning to an old hobby, he first devised a plan to corner the market in a rare Australian stamp, then began to apply the same principles to stocks and shares, a subject hitherto unfamiliar to him.

Buying two years’ back issues of the Investors’ Chronicle and the Stock Exchange Gazette, he read them all: “What I learnt enabled me to buy my first shares and make £40,000.” For two years he wrote a share-tipping column in the Daily Telegraph – under the nom de plume of “Capitalist” – while still working for British Leyland, and was named in an Evening Standard list of the most dynamic under-40s, along with Peter Walker, the promising young Conservative MP for Worcester.

The pair decided to go into business together. They set up Slater Walker Securities and proceeded to make themselves rich in a dazzling series of deals, using their clients’ money to buy companies in what became known as “corporate raids”, then dispose of any underperforming parts. In the financial good times of the second half of the 1960s Slater Walker grew spectacularly, the City historian David Kynaston describing Slater as “a self-made man uniquely in tune with the Zeitgeist of big-is-best industrial efficiency.”

When the firm’s market value passed £200m Slater declared his aim to make it worth £1bn in 10 years, and to own “a significant percentage of every major asset situation in Britain”. But trouble came during the secondary banking crisis of 1973-75, when a crash in property prices caused dozens of small (“secondary”) lending banks to be threatened with bankruptcy.

Unable to refinance its debts, the company was taken over by the Bank of England, and Slater was hit with 15 charges under the Companies Act by the Department of Trade, having allegedly misused more than £4m of company funds in share deals. Although the case was eventually thrown out in 1977, and he fought off an extradition request from Singapore, where the firm had been operating, Slater had become a busted flush. Left with £2m of assets and £3m of debts, he was, he declared, “a minus millionaire”.

After that came his resurrection: he paid his debts through property deals and stock-picking, helped by his friend Tiny Rowland (whose Lonrho company was famously described by Ted Heath as “the unacceptable face of capitalism”), and turned to writing successful children’s books – Goldenrod (1978), A Mazing Monsters, Grasshopper and the Unwise Owl and The Boy Who Saved Earth (all 1979).

He became a business force once more in the 1980s, selling fishing-beat timeshares, setting himself up as a share tipster and serving as a director of several companies. He also wrote several business books, most notably The Zulu Principle (1992), which postulated that by reading every book in the library about Zulus, you will soon know more about them than anyone else around you. He later worked with his son Mark, continued share-tipping online, ran seminars on investment techniques and wrote for The Daily Telegraph’s money pages.

In 1992 Hunter Davies asked Slater what he would like to be remembered for. Six things, he said, the first three being his financial support for British chess, his sponsorship of young British tennis players and his support for the charity Birthright, which carries out research into childbirth. “Fourth,” he said, “I’ve taken the nets off several rivers, letting the salmon return freely. Fifth, I’m happily married with four attractive children [he married his secretary, Helen, in 1965]. Sixth, my children’s books. I thought they were worthwhile.”

And Slater Walker? “I’m not particularly proud of that,” he replied. “It failed, after all. But I’m not ashamed of it, either.”

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+1 #1 John B 2015-11-22 15:46
Slater Walker was man made by Jim Slater for its time, one of sleepy post war companies making small profits from old machinery and under utilised assets and employees. Had the City of London been on its feet it would have done what Slater Walker did, but Slater moved with precision and speed spotting opportunity where others did not. This is what he promised and his shareholders expected and got. The Labour government of Wilson and the 70's financial crash brought the takeover fever to an end, not to be restored until the US inspired management buyouts (MBO's) of the 80's. These enabled existing management to borrow money to privatise the companies they were managing badly from their public shareholders and then to strip them to sell them for a nice profit.
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