YORKSHIRE’S richest people could provide a shot in the arm for under-performing firms and the county’s commercial property sector as they seek to return capital on their cash, according to a senior figure at Coutts, the Queen’s banker.
Over the last five years, the number of clients served by Coutts’ Leeds and Sheffield offices has grown by 25 per cent to around 1,100, after the technology boom created a new generation of clients.
In recent years, the private bank has attracted younger entrepreneurs who have built up a cash pile which has helped them to ride out the recession. Many of them are now looking to make investments.
Richard Brown, the client partner at Coutts’ Leeds office, which is celebrating its 20th anniversary this year, also predicted that the latest economic data would be revised upwards.
The economy entered a technical recession in the first three months of the year, according to the Office for National Statistics (ONS), as it shrank 0.2 per cent, following a 0.3 per cent decline in the previous quarter.
However, some analysts have questioned whether the UK has dipped back into recession, after a number of surveys from the manufacturing and services sectors suggested that the economy had entered a period of modest growth. Mr Brown said work in the construction sector would probably receive a boost from the Olympics, which means the ONS figures might change.
Coutts is one of Britain’s best known private banks and boasts a client base which includes sports and pop stars, and the Royal family.
“Most of our clients see the current economic climate as an opportunity, (because) most of them have liquid assets behind them,’’ said Mr Brown. “They’re looking at being business angels or picking up assets that are perhaps distressed with a view of turning things around.
“It creates opportunities in the market place for employment but, equally, provides them with interest and the opportunity to make returns on their capital, exceeding those that can be received anywhere else.”
According to Mr Brown, many of Coutts’ clients have been sitting on cash for several years.
He said: “They now need to take a view on how they return capital on their cash.
“For them, it’s a case of picking up business or other assets such as commercial property, residential property and even going into the stock market at the right levels.”
When Coutts opened an office in Leeds in 1992, a large proportion of its Yorkshire clients had inherited their wealth, or were middle-aged entrepreneurs who had invested in a single business.
Mr Brown said: “That’s changed completely. With the growth of the internet and technology, entrepreneurs are becoming young-er.
“The vast majority of our clients are serial entrepreneurs and they are passionate about the region. They are passionate about creating wealth for themselves and protecting jobs in the regional economy.
“Most of our clients will be moving into fast-growing sectors.
“Software and technologies associated with mobile phones and the internet are areas where money is flowing. There are some traditional businesses that have lost their way. Entrepreneurs can spot that, and, with the right management teams in place, they can turn that around.
“A lot of individuals in this region are entrepreneurial. They’ve made a significant return on their capital over the past 10 to 15 years. So there’s an opportunity to pick up businesses that are lacking in direction.
“There are a lot of inspirational individuals in the region, and those individuals, I believe, are in the right place to support companies with new investment opportunities.”
Mr Brown said many of Coutts’ clients had established charitable trusts which provided support for disadvantage children, which reflects the fact that many have come from humble backgrounds.
Coutts, owned by Royal Bank of Scotland, sold its Latin American, Caribbean and African private banking arms to Royal Bank of Canada in March, as part of its strategy to focus on its key markets such as the UK, Switzerland, Russia, the Middle East and Asia.
It can trace its roots back to 1692, when John Campbell set up a business as a goldsmith-banker at the sign of the Three Crowns in the Strand, London. Campbell gained royal patronage when Queen Anne commissioned him to make the collars and badges for the Order of the Thistle.