In the Hot Seat by Miles Nolan

Paul Compton recently stepped into the breach as CEO of long-established stockbroker WH Ireland, and is wasting little time in making his mark

We meet at the London head office of WH Ireland, a functional base just off Cannon Street. Chief executive Paul Compton joined the stockbroker-to-wealth manager last year, and he immediately strikes you as a man that wants to get things done.

Born in Port Talbot, he studied production engineering at Cambridge before joining Morgan Grenfell in 1986. He subsequently worked for UBS, Crédit Lyonnais and Merrill Lynch, where he was voted the UK’s leading engineering analyst, according to Reuters.

The big break came in 2002 when Compton joined Collins Stewart to head up the then loss-making small-cap desk. Over a five-year period his team raised £7.6 billion in 234 deals and was the market leader in London. He left to try his hand as a hedge fund manager at Toscafund, where he ran a mid-cap fund aimed at smaller companies.
The performance was strong, with the $100 million fund the second best achiever in Europe in 2009, driven by ‘clever stockpicking’.

Time for a shake-up
Last year, he joined Ireland to shake up a City institution that was founded in 1872 and has offices in Manchester, Ayrshire, Birmingham, Bristol, Cardiff, Malvern, Leeds and Colwyn Bay. The firm floated on AIM at 115p a share in 2000 but now languishes at just 50p, a price that Compton argues ‘significantly undervalues the business given our NAV of 63p’.

Though his FSA registration took longer than hoped to get through, the impact he has made is already showing. Recent results for the year to 30 November confirmed a sharp fall in losses to £618,000 (2009: £2.1 million loss) on a 25 per cent dip in sales to £18.4 million. Of more significance is that WH Ireland has been profitable every month since September.

Ireland has boosted its funds under management by 39 per cent to £1.6 billion and hired people in equity sales, trading and compliance. A market-making team recently joined, headed by Simon Doyle, and other new products include CFDs and spread betting.

Personal service
In private client broking, Compton says ‘we want to provide a personal service, not a one size fits all’. He adds that ‘the UK has an ageing population that want to pay less tax and earn a return in a low interest rate environment’. Recent opportunities the firm has been championing include a bond with the Principality Building Society that pays 9 per cent and a 10 per cent structured product with RBS.

On the corporate side, Ireland has 68 clients. He argues that his sweet spot is the sub-£100 million market cap space – an area he believes offers plenty of opportunity. Trading is on the up, with £35 million raised for clients in the year to date – compared to £16 million in the last financial year.

Compton was given 10 per cent of Ireland under option, and the 47 year old is keen to maximise its value. The firm has 200 people in the UK and a 37 per cent stake in Australia-based stockbroker DJ Carmichael. There is also
a property in Manchester valued at £6 million (with a £2 million mortgage).

Evolution founder Richard Griffiths owns an 8 per cent stake, picked up from Scottish Widows, and employees have been buying.

Compton argues that brokers are ‘rich man’s toys’ and that there are ‘far too many of them’, but he is not about to consolidate the market. Instead, he is keen to recruit good people – interested analysts and salesmen should certainly forward their CV.

The importance of compliance is something Compton bangs home, and he also believes that the government should do more to help smaller companies. When not promoting WH Ireland, he spends time at his home in Devon or on the golf course.