Strong backing for Cazenove float

INSTITUTIONS which hold 9% of Cazenove have told the blue-blooded stockbroker they want it to push ahead with plans for a £1bn-plus float early next year.

They are supporting Cazenove's proposal despite the questionable demand for new issues and the sharp downturn in corporate activity, which has traditionally been at the core of the bank's earnings.

Cazenove chief executive Robert Pickering said the float plans were not being altered as a result of turbulent market conditions. 'Our plans remain unchanged and we are continuing to work towards a float on the same timescale envisaged,' he said.

Cazenove is aiming to complete its eagerly-anticipated initial public offering in the first quarter of next year.

But many market followers believe falling profitability and the lower earnings multiples being applied to investment banks will prevent it from achieving an acceptable-price. However, its institutional shareholders, which bought a 9.2% stake in the firm for £100m in April last year, are concerned that conditions could deteriorate further next year and say they accept Cazenove's schedule.

'We bought into Cazenove on the basis that there would be an IPO and we would very much follow their lead on the timing,' one said. 'The outlook for everything is so uncertain and conditions might not improve for some time.'

Some close to Cazenove say many of the partners, particularly the younger ones, are questioning the desirability of floating in a bear market while others, including 62-year-old chairman David Mayhew, believe the move is a high priority. They say Mayhew's case is supported by evidence that fees for advisory services are falling.