He couldn’t have been more wrong. His lifetime in the City has just peaked with the sale of Nex, the interdealer broking business that has morphed out of Intercapital and in which Spencer still owned an 18% stake until this week. Over its 20 years as a listed company, its total shareholder return was close to 6,000%. Now that the deal with Chicago Mercantile Exchange has completed, he is pocketing more than £700m, half in cash, confirming his net worth at more than £1bn.
As if to stress the fecundity of his entrepreneurship, two of Oswald’s waiting staff swoop in, bearing baskets brimming with figs and porcini mushrooms, and invite us to order. I am tempted by the special starter of figs and pecorino and the special main, porcini pappardelle. While Spencer orders a Greek salad, followed by chicken cacciatora and a side order of smoked peas, I take the chance to have a quick look around the restaurant: all rococo styling, with glass and mirrors seemingly plucked from the Palace of Versailles. The self-made man is quite at home in this paean to old money.
The year Spencer founded Intercapital, 1986, was also the year Thatcher launched Big Bang. The break-up of the City of London’s restrictive categories of jobbers, brokers and bankers brought with it a flood of new clients in the form of Wall Street’s giant investment banks. “It was a lucky thing, yes. It was good timing — ’86 was dead easy. No regulatory requirement. No capital adequacy. No anything at all. Just set up your own company, phone up your clients, say: ‘Hello, it’s me again.’ ”
Thatcher was “jaw-droppingly bold”, he recalls with admiration. Though he didn’t meet her when she was in government, he had plugged into the Tory party machine from his student days. “My original dream was to go and be in the city for a while and then go into politics later in life,” he says. But by his early forties — with his firm still small but thriving — he was enjoying business too much. Instead, Spencer began giving increasingly large sums to Tory party coffers. (To date he has donated £4m.)
Our starters arrive. The wine is poured. And Spencer tucks straight in. There is a short pause in the conversation but he is clearly impatient to relive one of the most influential periods of his career. During the late 1990s and early 2000s, his business grew exponentially — both through acquisition and thanks to the fast-expanding use of derivatives by companies (to hedge risks) and by investment banks’ casino banking arms (to inflate profits).
He recalls inviting David Cameron and George Osborne to lunch in 2005, as the Tories were regrouping after another Tony Blair election victory. “I said at the end of it, ‘Listen, if you’re going to run, David, I will support you. I will give you public support and obviously some financial support.’ ” Within six months, Cameron was leader. And barely a year after that, Spencer was Tory party treasurer, a part-time fundraising role.
Spencer’s conviviality has always been one of his defining traits. His 60th birthday party three years ago, with Robbie Williams as the £1m entertainment, is the stuff of legend. The first time I met Spencer was on the fringes of the World Economic Forum in Davos seven or eight years ago, when he was dancing enthusiastically — surrounded by admirers, most of them beautiful women — at the Hotel Europe piano bar, the town’s top after-party venue. But he also proved adept at tapping his contacts for cash. In his four years as treasurer, Tory party funds recovered from a deficit of £8m to a surplus of £75m.
Our main courses arrive and Spencer carves into his chicken, only to be struck with a brief bout of coughing. A glass of water is to hand, but true to type he prefers to wash down the offending morsel with a slug of wine.
As I fork a mouthful of salty pasta, I tell him that my inner quack psychologist is curious how Spencer became the mix of contradictions that he is — the bon vivant who is also a considered collector of fine wine and fine art (his favourite painter is Lucian Freud); the impetuous gambler who has steadily built a £1bn business empire; the embodiment of the City’s Thatcherite revolution, who never quite fitted into the financial establishment.
Spencer was born in British Malaya in 1955, his mother a linguist, his father an economist working in the colonial government. Aged five, as his father moved to a UN post in Sudan, Michael was parachuted into a life of exotic liberty. “I was a little white boy in Khartoum. My parents didn’t mind what I did. I had a donkey to get me around.” His memory is not entirely rose-tinted — he notes the poverty, the commonness of diseases such as leprosy. But these were clearly among the happier days of his life.
And then, aged eight, he was shipped off to boarding school in northern England. “It was wet and grey and cold.” There is an almost visible shudder. “You arrive, you don’t know a single child, you have nothing in common with them. You are dumped there with your big suitcase and [told]: ‘Well, get on with it.’ ”
After his mother intervened, he was moved to Worth Abbey, the Catholic boarding school, where he gradually felt happier. He remained something of an outsider but ultimately formed firm bonds with some fellow pupils and masters, particularly his maths tutors, physics tutor and housemaster. “Funnily enough, about 10 years ago, I managed to corral them all together for lunch. Just to say thank you.”
Spencer is similarly soft-hearted about Africa. Though he has no ongoing connections with Sudan, he does have two houses in Kenya — a villa on the Indian Ocean and an estate in the mountains that is home to 43 rare black rhinos and stables where he and his wife, Sarah, breed racehorses. Much of Spencer’s charitable giving has gone to African conservation projects, he tells me.
Our dessert arrives — a plate of hard cheeses for Spencer and a fruit salad for me. With it the tone of the conversation changes. For all his business success, I say, I have the sense that the decade since the financial crisis has left Spencer feeling more of an establishment exile than ever.
“Of course there have been setbacks and disappointments and issues that have saddened me,” he admits. “Probably the worst,” he says, was the accusation that his company, at this point called ICAP, was complicit in the manipulation of Libor, the interest-rate rigging scandal that rocked the City in the aftermath of the 2008 crisis.
Although the three brokers involved were acquitted of criminal wrongdoing, the company was fined £55m by regulators. Spencer has always been adamant he knew nothing about the brokers’ actions that helped (subsequently jailed) UBS and Citigroup banker Tom Hayes in his attempts to push Libor rates up and down by altering their market quotes for Libor. Their behaviour was “extremely stupid”, he says.
When pressed, he admits the affair was probably part of a broader “cultural malaise” in the city. “It’s ultimately about the ethicality of: ‘I’m doing business with you. Am I giving you a fair deal or am I really trying to rip your eyes out?’ ”
Shouldn’t we have tamed trading’s macho culture over the past decade? “It’s a contact sport. It’s a bit like telling people in a rugby game that you can’t say in a locker room you’re going to f***ing kill your opposite number when you go on the pitch. Language and actual actions are different. But you’re right: there are cultural issues that need to be addressed.”