BROKING firm Paterson Ord Minnett’s national expansion took another step forward this week when Burdett Buckeridge Young’s corporate finance team started with the firm in Sydney.
BROKING firm Paterson Ord Minnett’s national expansion took another step forward this week when Burdett Buckeridge Young’s corporate finance team started with the firm in Sydney.
This followed the acquisition in July of struggling broking firm Terrain Securities, which nearly doubled the number of investment advisers working for Paterson.
Another small but notable move was the opening earlier this month of Paterson’s first Kalgoorlie office.
There was a touch of history in this move, since Paterson has taken over the former Eyres Reed branch, which latterly had traded as Macquarie Equities.
This series of transactions has substantially bolstered the size and profile of Paterson, which now has 124 advisers in nine offices across four States.
The challenge facing the firm is to ensure the rapid national growth does not unravel the business formula that has brought it success in WA.
Executive chairman Michael Manford is confident Paterson can comfortably manage the larger network.
In fact, he would readily make another acquisition.
“If another Terrain knocked on the door I would do it immed-iately,” Mr Manford said.
However he said he believed Terrain was a rare opportunity.
“Definitely we would take the opportunity if it presented itself again but I think that would be highly unlikely, especially as the market has picked up,” he said.
“The thing is, in the 10 years I’ve been running this business, that is the only deal to come along like that, at that pricing.”
Mr Manford said the stockmarket rally over the past few months had also ensured a smooth transition for the 60 Terrain dealers who joined Paterson.
“We’ve been a bit lucky with timing because the market’s picked up. Everyone has had a very good run,” he said.
The good fortune that has shone on Paterson extended to the recruiting of BBY’s experienced corporate finance team.
“This team approached us, it was just amazing actually,” Mr Manford said.
The approach was in response to an advertisement Paterson placed in newspapers seeking extra staff in Sydney and Melbourne.
Head of corporate finance Aaron Constantine said Ray Shorrocks, Tom Hardwick and Peter Hynd were a highly experienced team in the mid-cap corporate finance sector and would lift Paterson’s presence significantly in the Sydney market.
When asked about the challenge of managing a business that has doubled in size over the past few months, Mr Manford plays down the task.
“We’re not trying to create anything particularly new,” he said.
“We’re not trying to turn into a wealth management operation and change our whole style, we’re just doing nationally what we’ve traditionally done over a long period of time.”
Mr Manford said Paterson was already used to dealing with regional offices in WA.
“We also started up a small Melbourne office two years ago and we’ve merged our Melbourne office with Terrain’s Melbourne office, so really all we’ve done is added a Sydney office, a Woy Woy office and a Mornington office,” he said.
Mr Manford also highlighted the role of his experienced admini-stration team, which runs the national operation out of Perth.
“The thing I don’t have sleepless night’s about is our administrative ability to manage the national operation,” he said.
“I’ve always felt that our admin-istrative people here had a lot more to offer than just dealing with a Western Australian broker.”
WA remains the firm’s power-house, with 62 advisers in Perth, substantially more than any other broking firm, and 18 in regional offices.
Its three-person institutional desk includes former Hartleys dealer Andrew Frazer who recently joined the firm.
Mr Manford said he believed the secret to success of full service stockbroking firms was to grow the “four pillars” – private client dealing, institutional dealing, equities research and corporate finance – in a cohesive and coordinated manner.
This formula has delivered a profit every year for the past decade, although Paterson cut it fine last year.
Mr Manford said its 2003 profit was “substantially less” than the $1.17 million profit in the 2002 financial year.
“We just made a profit in 2003,” he said.