History of Kleinwort Benson

Robert Benson & Co

Robert Benson's son, Robert R Benson, was the first member of the two families to be involved in railway finance, becoming part of a cartel formed in 1824 to promote a railway between Liverpool and Manchester. By the 1830s he had railway interests in Belgium and France as well as several British railways.

Robert R's son, known as Robert Benson Jnr., moved the family business to London in 1852, setting up as Robert Benson & Son. In this period he also became involved in financing the rapid expansion of the American railway system, becoming part of a syndicate that marketed shares in the Illinois Central Railroad direct to the British public.

In 1875 Robert Benson & Co went into voluntary liquidation, but managed to continue in business as Cross, Benson & Co with a capital injection from Johnny Cross, an Englishman with a sound reputation on Wall Street. On Cross's retirement in 1884, the remaining partners reverted the business to its former name.

Drake, Kleinwort & Cohen

Henrich Kleinwort's son, Alexander Friedrich Kleinwort, established a successful trading business in Cuba, profiting from the expansion of the H Upmann and Sons cigar business.

In 1855, Alexander and his partner Edward Cohen set up a permanent base off Lombard Street in London, just round the corner from where Robert Benson's office was located. 50% of the capital for the business was provided by the Drake family, but they were sleeping partners. This did not stop the business being known as Drakes, however.

In 1863 the business moved to 20 Fenchurch Street where its headquarters remained for over 140 years until Dresdner Kleinwort moved to 30 Gresham Street in 2006.
Kleinwort, Sons & Co

James Drake died in 1870 and Edward Cohen withdrew his capital when he retired in 1883, allowing the Kleinworts to rename the firm Kleinwort, Sons & Co at the start of 1884.

In June 1897, a young man called Samuel Sachs arrived with a letter of introduction on behalf of his firm Goldman Sachs & Co of New York. The Kleinworts checked his references and agreed to go into business with the smaller company as Goldmans sought to expand their business beyond the Lower East Side jewellers and merchants who were their principal clients.

Kleinwort Benson Limited

In the late 1950s and early 1960s there was a spate of mergers in the City and it was natural in this climate for both Benson and Kleinworts to be considering a merger of some sort as a means of survival in an age when London banks were looking to provide a fuller service to their clients.

On 17 March 1961, the two holding companies were made subsidiaries of new company called Kleinwort Benson Lonsdale of which the Kleinwort shareholders held 46% and the Benson shareholders 56%. The banking operation was named Kleinwort Benson Limited.

The 1960s saw a huge increase in the volume of mergers and acquisitions and a corresponding increase in the level of fees that could be charged for advice on this activity. Kleinwort Benson's Corporate Finance division saw its revenues go from being only a small part of the bank's overall earnings to being at least as important as the banking division. By the end of the decade, Kleinwort Benson was participating in some of the biggest deals on the London market (the Cadbury-Schweppes merger, for instance).

Big Bang

In October 1986, the City of London was deregulated overnight so that the closed shop of stockbrokers and stockjobbers no longer had a monopoly of dealing in stocks.

Kleinwort Benson decided to enter the securities market so that it would be in a position to distribute the new issues it originated rather than relying on a third party. 

A number of senior market-makers moved from Wedd Durlacher Mordaunt to Kleinwort Benson as the former was acquired by Barclays Bank.

At the same time Kleinwort Benson's Corporate Finance division was advising a broking firm, Grievson Grant, on its potential acquisition by a bank as part of the deregulation of the market. It became apparent that the ideal partner was none other than Kleinwort Benson itself. The bank acquired Grieveson Grant in April 1986.

Acquisition of Kleinwort Benson

Kleinwort Benson was acquired by Dresdner Bank in 1995 and Dresdner Kleinwort became the investment-banking arm of Dresdner Bank. Dresdner Bank took over the American investment bank Wasserstein Perella in 2000 following which Dresdner Bank’s investment banking unit was renamed Dresdner Kleinwort Wasserstein.

The Wasserstein name was dropped in 2006 and Dresdner Kleinwort became the investment banking division of Dresdner Bank,  which became part of the Commerzbank Group in January 2009, when Dresdner Bank was sold by Allianz to Commerzbank.

Kleinwort Benson Bank Limited

The Kleinwort Benson name survives in the wealth management businesses of Kleinwort Benson Bank Limited. The bank has its headquarters on Gresham Street in the heart of the City of London and is supported by seven UK regional and two Channel Island offices.

The bank was sold by Commerzbank to RHJ International (“RHJI”) on 1 July 2010.

RHJI is a holding company focused on developing into a group with an exclusive focus on banking and financial services. The company is listed on Euronext with a market capitalisation of in excess of Euro 500 million.