Thursday 25 February 2021 4:53 pm

Exclusive: Square Mile veteran Joe Nally looks back on 45 years in the City

Tomorrow, Joe Nally will retire from Cenkos Securities, a firm he co-founded 18 years ago, after a career of more than 45 years in the City.

Nally, who was previously a partner at Williams De Broe, is one of the few remaining individual members of the International Stock Exchange of London who is still working.

As a prolific raiser of capital for many growth companies over his long career, such as Cove Energy, Western Canadian, Barrick and Majestic Wine, to name but a few, Nally turned Cenkos into one of the leading City brokers to small and medium sized companies listed in London, raising over £21bn since its inception in 2004.

In an exclusive sitdown with City A.M., Nally looks back on the highs and lows of nearly five decades in the City, discussing the ‘helluvaride’ Thatcher years, city manners, endless lunches, why people are much more serious these days and why he firmly believes the City will only grow as a global financial hub post-Brexit.

You first arrived in the City in the late ’70s. Compare the Thatcher years to Boris’ post-Brexit era, what has fundamentally changed?

During the Thatcher years, after a bumpy start, UK growth and financial markets took off and for a time it seemed like the only way was up, that included the price of champagne in City wine bars and the volumes that people were drinking at the time, it was a helluvaride. These days the pendulum has swung almost too far the other way and we are in a much more deferential and compliant environment, which can sometimes act against true character, enterprise, imagination and a sense of humour.

The legendary City lunch, you must have a few stories to tell.

City lunches, I am greatly in favour of them, it is a shame that in recent years when we have all become so much more serious, in my view people are much more miserable and have lost their sense of humour. Also, the European regulations have insisted that we can only spend £120 on a lunch these days, which no one can describe as a decent day out.

One story I can tell was on the day of the hurricane in October 1987. A few of us did actually come into the city, but the market was closed and so we did what you would expect us to do, we went out for a decent lunch. 

I was working at Williams De Broe at the time and a few of us brokers and fund managers decided to go out, get stuck in, so on the basis that we did not have to go back that afternoon and after a few bottles of very good Claret Wall Street came in at 3 o’clock in the afternoon 600 points down.

Emboldened by our liquid lunch, we all agreed that the Yanks were knaves and fools and didn’t know what they were doing. By the time I got over my hangover, which took most of the weekend, I closed down my trading positions on Tuesday afternoon after another 600 point fall on Monday, I had lost at least half of my portfolio value. It was a very expensive lunch!

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Ha! Let’s move on to Brexit, how damaging will the UK’s departure be for the City, in the long term? Will the City still be a financial powerhouse in let’s say, 10 or 15 years from now?

Personally, I didn’t want Brexit I had rather hoped that a strong Britain in Europe could have stopped the impulses for centralisation in Europe, and could have held the liberal economic line. Also, I just felt that leaving Europe was going to be operationally and legalistically difficult.

Given that we are now out and while there might be the odd bump in the road, I would never back against British ingenuity and ambition, especially in modern areas of science and technology and anyone that does back against us I think will be mistaken.

Europe may take back localised business in Europe, which the City can afford to lose. We will go on and expand into markets that are growing much faster than Europe, and London’s exceptional position as a centre of international financial flows will only increase over time.

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So tomorrow is your last day at Cenkos, after more than 45 years in the City. What has been the absolute highlight during your time in the Square Mile?

 It would have to be forming Cenkos in 2004, with my partners and seeing it grow to its leading market position.It would also be becoming a full member of the Stock Exchange which was the culmination of a long apprenticeship in city manners where I was considered by my fellows to be a fit and proper member of an organisation, whose moto was dictum mean and pactum. Membership demonstrated that one understood the manners of the City.

In those days if you walked onto the floor of the stock exchange wearing brown shoes the stock jobbers would pick you up and take your shoes off throw them out the market floor and bring you to your dealing partner saying “next time you let him out on the floor make sure he is properly dressed.

I still have my one share in the stock exchange which I can apparently redeem on my retirement for £6,500, which is the pittance that we were forced to accept around the time of the big bang for our ownership of the Stock Exchange of London. All of which was forced on us by the largest member firms, who saw the opportunity for them to dominate the market. At a time when seats on the NYSE were trading for a million dollars, the Americans thought us chumps.

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And what has been the biggest challenge in all those years?

The biggest challenge over my career was the advent of big bang and the complete change in the trading systems of the Stock Exchange. Physically, we were removed from the Stock Exchange floor and had to familiarise ourselves with new technical means of exchanging shares and also get used to single capacity with the ending of the distinction between jobbers and brokers. Having got over the changes it enabled an explosion in global financial services, new products such as euro bonds and currency swaps ensured London’s dominant position at the centre of the international marketplace.

Any advice for all the City rookies and newcomers who may be reading this now.

Experience tells all you can read about financial markets in books, but it still is an industry where older people with wisdom can educate and encourage younger people coming along to understand how markets work. It really is a case of “sitting by Nellie”. One of the things I do think is important, but is unfortunately neglected, is the City of London history because it gives you a sense of place and a sense of where things come from.

As a young stockbroker surviving on lunch vouchers – they didn’t pay you much in my day – I used to spend my lunch times visiting all the churches, the guilds, the city sites and learning about the City. 

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I give you one small story, after the defeat of the Spanish Armada, Britain controlled the oceans and there was an explosion of trade and wealth creation. Thomas Gresham, the senior city merchant, invited Queen Elizabeth the 1st to come and see the royal exchange and how the boys in the City were really knocking it off. She came for her visit and was impressed with the ambitions and the profits that were being made. She thanked them all for her day and on leaving said that she would impose a ship tax of 10 per cent of everything landed in her realm. She was a clever girl, Great Queen Beth, as the City has not stopped paying taxes since!

In summary, in the City of London I have always met honesty, integrity, imagination and opportunity for people like myself who went to a state school, where we all helped to add to the general commonwealth of the United Kingdom and of that I am very proud. One did meet a few rouges along the way, but the City was always very good at dealing with those in order to protect its reputation.

My final advice to your readers is always make time for a good lunch and never buy cheap Claret!

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