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How Daniel Stewart's wealth move paid off

How Daniel Stewart's wealth move paid off

It took two and half years, and a pivot to retail wealth management from corporate finance, for Daniel Stewart to finally return to profit.

‘We basically had years of stagnation where we were moving the business towards retail distribution. Things are now starting to look pretty good,’ said Peter Shea, Daniel Stewart’s CEO. ‘We’re now back to a point where we are profitable month on month.’

The company, which is creeping up to its 30th anniversary, refocused its business towards retail clients after it suffered a number of setbacks in its core corporate finance activities.

‘We had an early recession in that we were heavily focused on the gaming industry and had a number of deals in the pipeline that didn’t pan out in November 2007. We went from a profit of £12 million that year to a loss of £6 million, literally overnight. When legalisation around online gaming changed, profitability fell through the floor.

‘Furthermore, it was our view that this market would only retreat as smaller houses like ours would continue to lose out to larger M&A advisers, so we were very happy to reprogram and refocus our business on discretionary wealth management.

‘We agreed with our shareholders that this fundamental change to the business would be in their long term best interest.’

Starting in 2009, the business began to rebuild itself through a slow and methodical process. Over the period, it went from £40 million in assets under management to £342 million in the private client arm.

Shea expects the year ending March 2018 to have significantly improved results compared to the previous two years given the new strategic focus and the turnaround.

He said: ‘The business is now benefiting from the investments and changes made and has swung from being loss-making to now running profitably.’

The business has more than 1,000 clients, with 700 in execution-only, 250 in advisory and 50 in discretionary.

‘To try to build products around our discretionary clients, we launched a Ucits fund in August of 2017, which currently has roughly £2 million in it and is growing reasonably well now that it’s on five platforms,’ he added.

‘We are targeting £100 million with a hard stop at £250 million to ensure performance for our clients, and expect to grow it to that in four to five years.’ 

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