The man with the Midas touch

Kathleen Brooks
FEW people can say that Gordon Brown gave them a great business idea. Paul Tustain, the founder of, the internet-based gold trading firm, can. When the current prime minister, then chancellor of the exchequer, sold off the nation’s gold supply in the late 90s, Tustain decided that was a good signal to buy.

But the process for Tustain to buy gold was long and laborious. When he did manage to make the purchase, Tustain found that what he owned was “unallocated” gold. This meant that the bank he purchased the gold from actually kept hold of the physical metal. He had a right to the gold, but his investment depended on the bank remaining solvent.

Bullion Vault was thus conceived in 2002 as an easier way for retail investors to buy real physical gold. After three years of software development, the site was launched in 2005. Four years later it has 15,000 regular users who own and trade more than £500m in gold bars. All trades are allocated, and all clients’ gold is kept in three vaults in Switzerland, London and New York, rather than on a bank’s balance sheet.

Tustain calls Bullion Vault’s success “serendipity”. His background is in computer science and in the early 90s he set up a business that designed the electronic plumbing for settlement in stock and bond markets. When he sold the business in 2002, he decided to sow the profits into Bullion Vault.
The key to Bullion Vault’s success is simple, says Tustain. The site is fully transparent – it publishes an independent bar count every day so that investors know they actually own the gold, and an assayer’s report to prove the gold’s quality, which has to be a minimum of 99.5 per cent pure.
Because investors trade gold between themselves, the commission charged per transaction by Bullion Vault is less than 0.8 per cent per trade. Tustain stores his own gold through the site. Apart from the obvious financial rewards of buying gold, which appreciated more than 40 per cent last year, Bullion Vault won the innovation category of the Queen’s award for Enterprise last year.

So what spurred him to be an entrepreneur? “Back when I started my first business I wanted to be independent. It’s long hours, I’m not obsessed, but every day when I come into work I’m not accountable to anyone but myself.”

Tustain says he never dreamed of getting rich through this. “The most enjoyable part of this is seeing the people who benefit with me – family, friends my colleagues. I’m not greedy, making money on my own would be lonely and boring.”
Age :47
Grew up: Home counties
Lives: West London
Studied: Computer science part-time at night.
Drives: “A family car” an Audi A6
Hobbies: Tennis, bridge, golf
Last book he read: Lords of Finance: The Bankers Who Broke The World, by Liaquat Ahamed. The book that influenced him most is Vanity Fair, by William Thackeray.

Other interests: His bridge partner, Andrew Black, founded Betfair, he was also an early investor in the online betting site. But Tustain says he is less likely to support Black’s next venture: “Andrew Black has just bought Swindon Town football club and he’s trying to get me to support it. To be honest I am a football agnostic unless any of our teams are playing in Europe.” He prefers to watch cricket.