Hoare Govett’s larger clients look poachable
JEFFERIES Group, the global investment firm that has picked up the Hoare Govett name and around 50 of its remaining employees, has done a good job in hanging on to many of the firm’s stars.
So, corporate advisers like Paul Nicholls and Chris Zeal have made the move across to the new firm, as has Stephen Ford, who is widely described as the firm’s best salesman. Ford’s move in particular is a big deal because for a few days he was widely rumoured to be shunning the move but he went eventually, consolidating the firm in the small- to medium-cap sector in which he specialises.
Where rivals think Jefferies might be vulnerable is in keeping some of Hoare Govett’s larger FTSE clients.
Despite its troubled period under the ownership of RBS, Hoare Govett managed to retain a number of big clients, such as BAE Systems, Rexam, Tate & Lyle, Rolls-Royce and RBS itself.
Some clients have already left the franchise, such as Tullow Oil, which recently moved its brokership to Morgan Stanley and Barclays Capital, one of the many banks hoping to gain from all the uncertainty at Hoare Govett.
Another client, G4S, is expected to have a change of adviser any day now after the failure last year of the group’s highly ambitious tilt at buying ISS.
Rivals say that Jefferies’ focus in selecting people from Hoare Govett has not necessarily been at the higher end of the value chain. Some of the sales teams that serviced the bigger clients have not moved across. And some research stars, such as John Messenger in building, and Tony Shiret in retail, have not made the move.
Jefferies is adamant that its strategy does not involve exiting from advising its bigger clients. It already employs analysts like Mike Betts, who covers a similar space to Messenger, and James Grzinic, who trades his wares is in the same sphere as Shiret.
But the feeling among its rivals is that its newly acquired FTSE 100 clients (it did not have any of its own pre the Hoare Govett acquisition) are especially vulnerable to being poached by larger banks, which can offer a balance sheet and a fully-fledged sales and research team aimed at the blue-chips.
These things happen slowly, though, with brokerships often sticky. “We’re not going to make a move just yet,” said one rival. “But make no mistake, there will be a push to win some of those clients in time.”
david.hellier@cityam.com
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