Magazine article The Spectator

The Shipwreck of the Last Buccaneer

Magazine article The Spectator

The Shipwreck of the Last Buccaneer

Article excerpt

Before the number-crunchers of private equity and the hedgefund world took control, the City was dominated by a pretty rough gang. Predatory tycoons such as Lords Hanson and White, Tiny Rowland of Lonrho and Sir Nigel Broakes of Trafalgar House were the big beasts of the stock market.

They created conglomerates to match their egos, and made themselves fortunes in the process. Yet either time or shareholders caught up with them, one by one, and their empires disintegrated. Except, until recently, for one. James B. Sherwood, baron of the Orient-Express hotel chain, Great North Eastern Railways, cross-Channel ferries, container-leasing and dozens of other businesses, somehow managed to cling on.

He, too, now appears to be on the way out.

At 73, he has already stepped aside from his main company, Sea Containers, which failed to make a debt repayment and stumbled into Chapter 11 bankruptcy protection in the US last year. Soon he will be leaving another, Orient-Express, along with his stepson Simon Sherwood, whose resignation as chief executive was announced two weeks ago.

Jim Sherwood's exit closes the book on a particular style of capitalism. Rumbustious and buccaneering, it provided plenty of entertainment for financial journalists. But it was incoherent and self-indulgent, and few stockmarket investors will be sad to see the back of it. Compared with the sober characters running big businesses today, Sherwood was a hell of a guy: if there was an MBA of life, he'd have first-class honours. Born in Kentucky in 1933, he graduated in economics from Yale, then served as a US naval officer before going to work in the shipping industry.

In 1965 he rustled together $100,000 to start Sea Containers. He had spotted the way the shipping industry was changing from oldfashioned dockers loading and unloading cargo to big containers that could be lifted straight on to the big lorries that were then starting to race up and down the new motorways. Sea Containers leased the big metal boxes: it wasn't glamorous, but it was profitable -- not least because its complex structure minimised exposure to tax and red tape: it was headquartered in London, domiciled in Bermuda, and eventually listed in New York.

And it soon made Sherwood his first millions -- while somewhere in the Swinging Sixties he still found time to write James Sherwood's Discriminating Guide to London.

From containers he branched into owning the ships that carried them, running his fleet mainly out of the Middle East. Even through the economic turmoil of the early 1970s, money rolled in -- enabling Sherwood to branch into what he himself termed his 'frivolous ventures'. He took control of the exquisite Hotel Cipriani in Venice -- mainly, he explained at the time, because he liked it.

It was tucked into the portfolio as a tax loss but within a couple of years it had moved into the black again. It became the foundation of his supremely stylish second empire.

If anything marked Sherwood's progress, it was entrepreneurial restlessness. Like Richard Branson, he picked up businesses and played with them because they looked fun. A train enthusiast, Sherwood and his wife Shirley began collecting vintage railway sleeper and parlour cars in 1978. Four years later, with 35 restored carriages -- along with all the silk-shaded lamps, fine china and other bits and bobs that might fill the set of an Agatha Christie movie -- the couple restarted the legendary Venice Simplon Orient Express. …

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