The establishment of Merrion Capital represents probably the most concerted assault on the institutional equity market since the establishment of NCB and Riada (now ABN AMRO) in the late 1970s/early 1980s.
While the institutional market is being targeted, the company, called Merrion Capital Group, will also target private client business, and corporate finance as well. Although it is a people based venture, the group show no signs of wishing to enter the market short of capital, and accordingly first on the agenda for Merrion’s new corporate finance unit is the financing of the group itself.
Seven people have left NCB to establish the new venture. Combined, they have around seventy years experience in the Irish equity and corporate finance markets. Currently, they are putting together a business plan and looking for a permanent base. They expect that the corporate finance business will be up and running by July/August, but the stockbroking side will probably not be operational for three‑six months.
Merrion Capital will be headed by NCB’s ex Deputy Managing Director, John Conroy. He is being joined by Shane Nolan, Kevin Kilty (ex head of IT development), Rory Gillen (ex Head of Equity Product Development), Barry Connell (ex Head of Equity Sales), Pat Landy (ex Director of Corporate Finance) and Martha Hayes (who ran Equity Research Production).
Initially, the company will be funded via an equity injection by the founding shareholders. Whilst this will be sufficient to get the new venture up and running, the intention is to attract a major institution in as a financial backer. This would allow Merrion to scale up its equities business rapidly, developing independent best‑in‑market research and distribution capabilities for Irish shares.
The new group will have a team with a variety of skills and expects to compete aggressively in all the traditional areas of stockbroking (institutional and private clients), corporate finance and venture capital. There is no doubt that the substantial growth in the financial markets over the past five years is indicating an attractive opportunity for a new, indigenous entrant. Prime among these is the scope to improve on the relatively low level of equity advisory services to high net worth individuals. The new entrepreneurs behind Merrion believe that the venture will have the necessary expertise, service ethos and flexibility to adapt to changing trends which leave current, less nimble, players vulnerable to loss of business.
Apart from the core stockbroking and corporate finance business, they intend to set up a niche asset management unit, with an initial specialisation in Irish equities. This will be devoted to providing a premium service to high net worth individuals and is not aimed at the space served by the established Irish asset management institutions.
The company will have a relatively simple operating philosophy ‑ to provide the best quality service in Irish equities and corporate finance to a range of domestic and international clients. The operating structure is intended to be flat and lean, and a partnership ethos will be developed by spreading equity ownership widely within the new business. |
