It’s no easy task setting up your own investment management business, yet we continue to see growing numbers of people doing so writes Eleanor Mahmoud. A case in point is new kid on the block, Malloch Melville Investment Managers, who has defied the ultra-competitive Edinburgh marketplace with ambitious plans to make a name for itself there.
Malloch Melville Investment Managers is the brainchild of Jeremy Balfour-Melville and Thomas Malloch. They first met a decade ago in Yorkshire whilst both working at Redmayne-Bentley. Remaining good friends, in 2015 they both left their roles at national firms (Charles Stanley and Redmayne-Bentley respectively) to set up their own venture, and with plenty of good reason.
‘Taking control of how you manage money and ensuring consistent client treatment is easier when you are a smaller company with fewer investment managers,’ co-founder Balfour-Melville explains.
‘We’re certainly seeing a lot of boutique firms opening, a trend I think is only going to accelerate, especially as the national firms scale up further and become ever more mass-market in their approach to managing client assets.’
With Edinburgh widely regarded as one of the UK’s pivotal financial services centres, I wonder whether its level of competition made setting up shop harder.
‘Yes, Edinburgh is a crowded market, but where isn’t these days? Most cities are well supplied with wealth management firms’, he responds.
A very valid point, following which I ask Balfour-Melville where exactly they found a gap in the Scottish market:
‘We always felt there would be space for a boutique that can offer its clients a friendly, discrete and knowledgeable service. We can offer access to a greater range of potential investments as we are not constrained by liquidity concerns.’
Around 40% of Malloch Melville’s clients are local (Scottish) with the remaining 60% further afield. The team of three are not dependent on a local bias; understandable given that both co-founders spent ten years working in Leeds. Having focused on embedding a number of existing clients from previous roles into the new business, the team are now looking towards expansion.
The third member of the team joined Balfour-Melville and Malloch earlier this year and the former describes how he has already added a lot to what was a two man operation:
‘We have already taken on a new member of our team, Nigel Rawlings has joined us from Beaufort Securities. He brings a wealth of experience having held senior positions at a number of institutions over the years. He and his clients have settled in nicely.’
Balfour-Melville has also settled back into Edinburgh life nicely. Having been born and schooled in the Scottish capital, he moved to England to study at university and remained when he started working, returning to his roots in 2010. Completing the distinctly Scottish feel of the firm is Malloch, who although being a Yorkshire man, also has Scottish heritage.
‘The city has quite a grand feeling. You can catch the castle, the coastline and the Pentland Hills on your journey to work,’ Balfour-Melville says affectionately. ‘Not many people in the UK have a commute like that.’
Anyone who has visited Edinburgh would be testament to the extensive list of positives the city has ownership of – architecture, culture and history being just a few. So when asked for a downside, I’m not surprised that we end up settling on the following:
‘I suppose the climate here isn’t so great, which is just as well or everyone would want to live and work here and the city would become unbearable,’ he jokes.
Weather aside, Balfour-Melville has every confidence that wealth management will remain prosperous in Scotland.
‘Wealth management in Scotland has always been strong. 40 years ago my father built a stockbroking firm and now I’ve done it too,’ he recalls.
‘Edinburgh has such a history in finance. There’s so many fund managers, pension funds, investment trusts and the wealth industry is continuing to expand. It keeps going from strength to strength year on year.’
But of course there is plenty more to Scotland than simply its capital city, something he agrees with when asked whether Edinburgh dominates as a financial hub.
‘Edinburgh does dominate our region but it isn’t the only financial hub in Scotland. Dundee, Aberdeen and Glasgow all had their own stock exchanges in the past and are hubs in their own right.’
As we enter 2018, the firm is eagerly working on growing its presence amongst professional intermediaries and higher net worth clients. In January they will welcome an experienced business development manager to the team - it is clear the emphasis is on building up the business.
Optimistic Balfour-Melville on plans for the New Year: ‘That is an exciting step for us and I think over time it will really pay off.’