Foreign takeovers of cherished names in Britain do not create a fuss

London Briefing Chris Johns: Few economic or financial policies are unique - in the sense that they are practised by one country only. Most governments adopt an eclectic mix of policies often based on a bizarre blend of blind prejudice, ideas that have worked elsewhere, new theories and old promises.

But if there is one policy - pursued across decades by successive UK governments - that is different to anywhere else, it is in the attitudes displayed to the foreign takeovers of British companies.

Subject to the usual laws about competition, the UK has, generally, been supremely indifferent to who owns what.

Arguably, the continuing success story that is the City of London is partly because of the ownership factor. Venerable names in the world of stockbroking and merchant banking have long since disappeared with many institutions having been swallowed by foreign financial giants. People of a certain age might reflect on names like Scrimgeour Vickers, Phillips & Drew, Simon & Coates, Morgan Grenfell and wonder where they all went. The answer is that they were all absorbed into US, German and Swiss banking giants. Citigroup, JP Morgan, Deutsche Bank and UBS all have huge numbers of people working in London. In one way or another, their presence in the City owes something to an earlier acquisition of a very British company.

Of course, changing ownership patterns, and our indifference to them, are not just restricted to the financial world. The latest example in a long line of foreign acquisitions is the imminent takeover of Heathrow and Gatwick airports by a Spanish construction company.

But back to the City. The investment banker (old style) turned author, Philip Augur, has lamented the Death of Gentlemanly Capitalism that all this change represents.

He takes issue with the new style of investment banking that has promoted the lawyer to the same status as the corporate financier: "my word is my bond" is no longer an acceptable form of contract. But Mr Augur looks back with fondness on times past through the same lens that many people view history, one that filters out all the bad bits. Change brings its own stresses and strains and if it there is one thing that the City does well it is displayed in its unceasing ability to completely reinvent itself.

An earlier author, Anthony Powell, wrote about The Acceptance World, reflecting a time when pieces of paper called Acceptances were one of the main instruments traded in the City, and the institutions that made up that particular market were called, accurately, if a little unimaginatively, acceptance houses. Ask a modern trader in collateralised debt obligations about acceptances and I guarantee a blank stare.

To be fair, most traders in CDOs and the other exotic instruments that fly around electronic ether are unaware of most things outside their immediate environment, such is the nature and intensity of the modern financial factory.

Partly in an attempt to welcome the latest barbarian invaders to the UK, Knebworth House recently hosted a weird sort of party called Hedgestock, designed to showcase London's attractions for - you guessed it - foreign (read US) hedge funds.

Why Hedgestock? I'm not sure, but the headline attraction was the surviving bit of the rock band The Who (they were a big deal at the time of Woodstock - you had to be there to get the reference). As one commentator put it, this was the opportunity to turn on, tune in and leverage up. I'm not sure that they played polo or drank loads of champagne at the original Woodstock but, like I said, we have to embrace change.

Hilariously, various British newspapers insinuated reporters into the audience at Hedgestock and most seem to come away more baffled about the modern financial world than when they went in. Inevitably, they made great fun of the seeming inability of any of these new Masters of the Universe (Tom Wolfe references abounded in most stories) to let their hair down.

But these were soft targets - as I have already mentioned, CDO traders and the like don't get out very often. Not in daylight anyway. To be fair to Hedgestock, it represented a departure from the dreary conference circuit and it was a charitable event that raised lots of money for good causes.

Hedge funds are London's most recent success story. They have arrived for the same reasons that all the other foreign institutions came. From Rothschild to Soros, they come mostly because they can: the flexibility that London has always offered means that new ways of doing things are, paradoxically perhaps, the norm. It also helps that we couldn't care less when they buy one of our own "cherished" names.

Chris Johns is an investment strategist with Collins Stewart. All opinions are personal.