Michael Marks remembers the old City. “The stock market opened at 9.30. My senior partner at Smith Brothers would come in at 9.28. The market closed at 3.30. The senior partner would go home after an hour-and-a-half lunch saying, ‘God, I’m exhausted’.”

The 64-year-old financier recalls when the old City died. It was 1974 and the Arab oil embargo, recession and the secondary-banking crisis had knocked 75% off the value of British shares.

“The phone stopped ringing,” he said. “Instead of taking home a share of the firm’s profits as a new junior partner, I had to write a cheque to cover my share of the loss; £1,200 was quite a lot in those days for a young man with a family.”

In the 1980s, Marks helped remake the City as the European headquarters of the emerging global capital market. Then, as Wall Street invaded and bought up rivals, he waited. “We knew that if we could survive, we would become the prettiest girl at the dance, because we would be the only girl at the dance.”

So Marks built Smith New Court into one of the City’s last great British stockbrokers and spurned all offers — until the American financial giant Merrill Lynch paid a record £526m for it in 1995.

He then became chairman of Merrill Europe and until 2002 enjoyed a ringside seat at the dotcom boom and bust.

“I would fly to New York for meetings about concierge services for clients — dog-walking services,” he said. “Then the bust came and there was a rush to cut costs as indiscriminate as the rush to build had been.”

In 2002, Marks retired from Merrill but not the City. He saw an opportunity for a postglobalisation firm helping companies and investors to hold their own against international banking giants.

Marks’s New Smith Capital Partners started as three men in a room. Today it runs four hedge funds with £4 billion under management. It is advising the airports operator BAA on the financing of Heathrow’s Terminal 5 and helping European insurance companies restructure investment products sold by Wall Street. It has 45 professionals.

“Since 2000 a lot of guys have made lots of money,” said Marks. “But they are not ready to retire and they no longer want to work for a bank with 30,000 employees,” he said.

Marks sees the City changing again: international giants will continue to base their European operations there. But a growing band of small, entrepreneurial, British-owned firms will pick off high-margin business.

The top dogs in the new entrepreneurial City are the hedge funds — loosely regulated pools of capital taking more risk to earn higher returns than traditional fund managers. Forty-six of the City’s 100 richest men are hedge-fund managers and almost all of them are British.

Adding to the entrepreneurial ferment are boutique banks such as Marks’s and privateequity firms — British-owned businesses looking to buy undervalued companies, fix them up, and sell them at a profit.

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