MAGGIE PAGANO: The City loves a clever rogue

When your name is Bob Diamond or Rich Ricci, there is only one way to go – up the money-tree. 

The two former Barclays head honchos, who now run the UK stockbroker, Panmure Gordon, are doing just that with their latest move to merge with rival investment boutique, FinnCap.

FinnCap, which even after the jump in its shares yesterday is worth around £30m, may look a relative minnow.

New venture: When your name is Bob Diamond (pictured) or Rich Ricci, there is only one way to go up the money-tree – onwards and upwards

Yet the merger is an important step forward for Panmure, giving it access to FinnCap’s specialist knowledge, specifically in the fast-growing life sciences and technology sectors.

The smaller firm is also number one broker and adviser to growth companies listing on junior market, AIM.

It is an important tie-up for the future of the City’s capital markets and ensuring the Square Mile holds on to its role as the place for start-ups and small and mid-cap companies to raise new funds, list and expand.

What’s more, with corporate activity and IPOs on the downturn and tighter fund-raising conditions world-wide, the deal should give the two firms the chance to make cost savings. 

Others have already started the process. Numis, Peel Hunt and Zeus Capital over the last few weeks have been cutting back on staff while FinnCap made ten of its 150 workers redundant only recently. 

FinnCap has been through its own roller coaster, losing Sam Smith, its charismatic chief executive and founder after she decided to opt for a lifestyle change in September, although she remains an adviser. Over the last year, the shares have more than halved.

That talks have reached this stage suggests FinnCap’s biggest investors are on board, and that having such ambitious personalities as these two US bankers – Diamond and Ricci – running the show will put some much-needed oomph into the business.

FinnCap’s investors include a cast every bit as colourful as those at Panmure. Venture capitalist, Jon Moulton, who backed Smith when she set up the firm, owns 11 per cent. Smith herself has 9.85 per cent. 

Lord Leigh, former Tory party Treasurer, has 9p. Tech supremo, Vin Murria, who lost her battle for M&C Saatchi, holds 10.3pc.

FinnCap is listed so should the deal go ahead, the new group could come back to the public market through a reverse takeover – neat and cheap.

Such a move also places Diamond, who owns nearly a quarter of Panmure through Atlas Merchant Capital, and Ricci, back in the public spotlight after a bruising journey since their controversial departure from Barclays over the Libor-rigging scandal.

After Diamond’s Atlas took a majority stake in 2017, he brought in the famously obsessive racehorse owner Ricci, who calls himself the ‘maddest f****r on earth’, to run the broking house two years ago.

Since then, the duo have turned around the loss-making firm

Word has it that Diamond and Ricci were deeply scarred, if not humbled, by their Barclays experience and wanted the chance to prove and rehabilitate themselves with their peers.

If they pull off this deal to build a serious player in the capital markets, then they might just about have clawed back their earlier reputations as brilliant albeit sharp-elbowed deal-makers.

The City still loves a rogue, especially if they do good business.

Go-ahead for gilts

Phew. The confusion is over. After having to repeatedly deny reports that it was delaying the start of its gilts sale operation, the Bank of England has confirmed that sales will now go ahead on November 1.

The Bank was due to start the gilts sales on October 31, after postponing the operation from its original date, October 6.

This was delayed because of the emergency bond buying package to prop up the pension funds. But a newspaper report yesterday rather upset the apple cart as it claimed the Bank was postponing the sale because of the febrile state of the markets.

That’s when the first denial came with the Bank’s spokesman unusually using strong language – inaccurate was the word – putting the kibosh on the rumours.

Yet the report was sort of right. The Bank is now going for November 1 because it does not want to launch the sale – otherwise known as quantitative tightening – on the same day as the medium-term fiscal plan is being launched.

Got it? Gilt yields on ten-year bonds shot up initially on the report of a delay but dropped down again to below 4 per cent on the denial. That is the right direction.

This post first appeared on Dailymail.co.uk