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Profile: 'we are tiny but profitable'

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Profile: 'we are tiny but profitable'

Although his heart was set on it, Nick Hooper never got to join the navy, which was probably for the best.

After finishing school, Hooper, who just launched a boutique firm London Investment Management, applied to join the military but was told to come back in six months. During that time, the Falklands war broke out so he decided it was best to move to London instead.

He ended up getting a job at Debenhams in Oxford Street. ‘When I decided to join there had not been any wars for a while,’ he says. ‘And I felt very lucky I did not have to go to one at the age of 17.’

Though most of his friends attended Oxbridge, Hooper never went to university – mostly because of arrogance, he says. Out of admiration for his father, a former Royal Air Force officer and a successful businessman, he was determined to either make it in the armed forces or excel in the business world.

Hooper’s first job, following his short stint in retail, was that of a trainee assistant buyer for an Indian-based global construction company, where he spent two and a half years learning how to buy and transport equipment to the Middle East to build dams.

It might be an unlikely route to managing private wealth, but it was not a wasted experience.

‘Working for that company taught me how big businesses are run,’ he says. This, he explains, came in handy in his later life as a stockbroker.

Some three decades and numerous stockbroking roles later – still with the enthusiasm of a schoolboy but also the experience of a veteran – he is now building his own investment management firm.

London Investment Management went live at the beginning of the year, having received its license in November 2017 when Hooper was still working at Credo Wealth. He had the idea of setting up his own shop months before and had a sit-down with Credo to make sure there were no obstacles to his departure.

Mark Hudson, a trader who previously worked at firms such as Amundi and RJ O’Brien, joined Hooper late last year.

‘We were mission critical before the launch date, but we had to check systems, put new computer programmes in and so on,’ Hooper says. ‘We are three weeks in and I still have not moved over my own account. Everything is still a work in progress.’

The pair are working out of Hooper’s London home for now. The plan is to recruit two to three people with stock market and professional client expertise in the next few months and move to a more appropriate office space.

Hooper knows all about new beginnings. His finance debut came in the mid-1980s when he was hired by an Australian trading firm in Sydney. His job there was to reduce the company’s debt by analysing the data on computer punch cards and monitoring transactions to reconcile all of the accounts.

After the firm went under he returned to Britain and continued his stockbroking career. He joined Merchant Securities, now part of Sanlam, and then went on to work for a number of companies, including Townsley & Co, Teather & Greenwood and JM Finn until he joined Credo as a consultant in 2004.

What he enjoyed in this last role was the independence of working with the company, but not for it. He had the liberty to manage his clients his own way, which was something he wanted to preserve.

It was the feeling that this freedom could soon be lost that drove him to go into start-up mode.

‘I set about building my business there,’ he says. ‘We all worked very much together, we had a revenue share and that’s the traditional old fashioned way of doing things.’

But as time went by some things unavoidably started to change. ‘When I joined Credo there were 16 or 20 people. There are 70-odd people now. I was non-political so things would happen and I would not find out about them and they were not necessarily good for what I was doing,’ he says.

‘Some time ago I looked at it and thought that sooner or later Credo would impose walls to stop the independence of brokers because they have to and then my clients would become the firm’s clients. This has not happened yet, but eventually it will.

‘I could see the industry moving in that direction. All the larger companies have turned around and said “this is the way we manage a client” and for smaller clients that makes a lot of sense, but for mine it does not.’

London Investment Management now has only eight clients, all of whom have been with Hooper since his days at Credo or even before. They range from a Norwegian shipping family to a private family that has accumulated its wealth through venture capital and are spread across various locations, including Scotland, Singapore and Luxembourg.

Hooper says he is now only interested in taking professional clients on board. Although he had more clients while at Credo, only those who fulfilled that criteria were carried over to the new firm.

‘My clients are worth hundreds of millions but we have less than single digit percentages of that,’ Hooper says. ‘We are tiny but profitable and we are pretty international for our size.’

His expectation is to increase client numbers by one or two annually and pass the £100 million mark within a year.

It is still a small number, he concedes, but says that one of the reasons why he decided to embark on a new adventure 32 years after his first finance job is that he sees there is a specific market for family offices to deliver an independent service.

‘What I mean by that is to sit between the supplying brokers and the family office and go through the documentation, look at the deals, the management and the industry and assess the various transactions that are available and say this is good and this is not.’

He adds: ‘These days everyone is comparing themselves against an index and it is all becoming the same format; but it may be the case that doing something slightly different may be more profitable. You have to ask the question and this is what I did. I could see that professional clients were capable of buying without necessarily having to look at the index – they would look at other things too.   

‘A lot of things have changed since I joined the profession,’ he says. ‘The regulators have done a brilliant job of cleaning up the industry and making sure that everyone has the same information.

‘But profitability has been squeezed as a result. It’s interesting how businesses are separated between corporate finance, which is still making a lot of money, and looking after individuals, which is the side I am on. I think the future of the industry is a total expense ratio of 1%.

‘All I want to do is look at investments and talk to family offices and larger clients and focus on what I am good at. I joined the industry to help people.’  

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