Interview: No more buyouts

THE BROKERAGES industry, particularly at the small- and mid-cap end of the market, is widely thought to be ripe for consolidation.

Oriel Securities, for example, was snapped up by US firm Stifel Financial earlier this year.

So now that Panmure Gordon is doing well, one might have thought the firm would be looking to grow through some acquisitions of its own.

But that reckons without Panmure’s troubled recent history.

Its last big purchase was ThinkEquity in 2007 in an effort to break into the US market. The deal turned bad, and Panmure lost around £80m over its five-year spell owning the firm.

That history is still felt keenly today.

“We are not looking at whole firm or massive team acquisitions,” Phillip Wale said.

“Historically those have been expensive in terms of integration, and they can be culturally very different.”

Instead, Panmure Gordon will focus on growing organically, both to gain market share and create profits for shareholders, and to make sure it does not fall back into the territory of acquisition targets.

“Trading revenues are up 25 per cent this year and there is no reason we cannot do that again,” said Wale.

“If the market remains open for issuance we can scale up the corporate finance business.”

And this is clearly where Wale wants to make progress – he has jealously watched rival brokerage Numis climb up the rankings on IPO volumes this year, while Cenkos made a killing on the AA flotation.

“We will aim for bigger-win deals like we have seen some competitors do,” he promised. “We want to see ourselves running at the front of the pack.”