Winds of change blowing through corporate world

The small to mid-market corporate advisory firm yesterday began trading as N+1 Brewin, majority owned by Spanish private equity group N+1.

The adviser, which has offices in Leeds, Glasgow, Edinburgh, Newcastle and London, works with a number of Yorkshire firms. N+1 said its regional presence is vital as it trades through tough markets for investment banks.

“At the bottom end of the peer group you will probably see more consolidation,” said Jamie Cumming, chief executive of N+1 Brewin.

“I think at the small end you will probably see others taking a step back. You can’t get the returns out of pure equity trading.”

Brewin Dolphin sold the division for £5m to N+1 to focus on wealth management, but retains a 14 per cent stake in the partnership.

N+1 Brewin spans corporate advisory and stockbroking, equity research, sales, trading, investment banking and capital markets services.

The sector has seen a swathe of consolidation in recent months, as firms struggle with low transaction levels, a dearth of IPOs, de-listings and weak markets for capital issues.

South African investment group Investec recently bought Evolution Group, merging its corporate advisory arm. As a result, Investec is consulting over closing Evolution’s Leeds corporate advisory office. Boutique investment bank Liberum Capital recently pulled out of Leeds, blaming low levels of business.

Westhouse Securities, which has an office in Leeds, recently acquired Arbuthnot Securities. American investment bank Jefferies is believed to be close to buying Hoare Govett from state-backed Royal Bank of Scotland, while Canaccord is buying Collins StewartHawkpoint. “Part of the reason for doing the transaction with N+1 is we could retain the regional connections we have,” said Mr Cumming.

“If we’d merged with one of our peers, we would have had to rationalise – half the offices, half the staff.”

The Leeds team is headed by Richard Lindley, who joined last month after more than three years with Rothschild in Leeds. Prior to that he was with WH Ireland and Williams de Broe/Evolution. He is joined by associate director Luke Boyce, associate James White, and analysts Joe Stroud, Will Goode and Laura White.

A number of former members of the Leeds Brewin team recently left to set up an independent firm, Spark Advisory Partners.

N+1 now has a 55-strong team. Employees have taken a 21 per cent stake in the business, and N+1 Group owns 65 per cent. N+1 advises a number of Yorkshire firms, including Animalcare, Billington Holdings, Airea, Carclo, Communisis, Renew Holdings, Vp and The Black Sheep Brewery.

Latest reported earnings for business totalled £1.3m in the year ended September 2010, while income was £10.5m. It has raised over £2.1bn in the last five years and advised on transactions worth more than £4bn.

N+1 Group chairman Santiago Eguidazu said: “The UK represents a very dynamic market where we believe there are extensive opportunities for growth despite the economic gloom of the last few years. From the outset the N+1 Brewin team has shared our vision of creating a truly pan-European operation which is able to offer a leading service to our clients in every country in which we are present.”