“Challenger broker” Zeus Capital hails bucking the investment banking trend with 2016 figures
Boutique investment bank Zeus Capital described itself as a "challenger broker" as it released results showing it has "bucked the trend".
In the year to 31 March 2016, Zeus said it had completed 23 transactions, raising £1.5bn – up from around £500m in the previous year – across the public and private markets. Its revenue for the period was £25m, up from £16m.
The company has today reported pre-tax profits of £11m, up from £7m in 2015 and down from £16m in 2014, giving an "average pre-tax profit of over £10m per annum in the last three years".
Its year-end net assets, meanwhile, were £18m and it reported net cash of £13m.
Read more: Nomura set to announce hundreds of London job losses
"The whole market is in trouble," chief executive John Goold told Morning Wire "[But] actually that isn't the case [for us] – we have bucked the trend…
"So there are those that can make it work and those that can't seem to make it work."
Describing Zeus as a "challenger broker", he added: "The fact is that a gap has been created here because the bulge-brackets have pulled out of mid and small-cap. They weren't often in it massively before, but they were in it.
"And there were good brokers in there. And we have focused on taking out those good senior brokers into a very focused business in a fresh environment – it's unencumbered, as well, from everything else that's going on in a bulge-bracket.”
Read more: Investment banking revenue plummets to post-crisis low
In the the 2015/16 year, it completed three initial public offerings (IPOs) for Purplebricks, Watkin Jones and Elegant Hotels.
And while 2016 has seen the IPO market drop off both globally and in the UK, Goold – speaking to Morning Wire along with chief operating officer Darren Ellis – said Zeus's flotation "pipeline is pretty good".
Zeus has also completed two reverse-takeovers and 13 secondary fundraisings in the year, as well as five private fundraisings totalling £32m. In 2015, it was ranked second on the London Stock Exchange's alternative investment market (Aim) for funds raised.
Read more: Barclays: Our investment bank's performance won't be strong this quarter
Over the course of the year, Zeus also grew its total employee number to 56 professionals, up 50 per cent on the previous year.
The investment bank said it had done this by adding to its financials team and also moving for the first time into the natural resources sector.
Ellis said: "Most of the investment banks, be they large or small, have pulled out of the resources sector, both oil and in mining…
"We think there's an opportunity in that area right now. It's quite a step for us and we're probably bucking the trend. But actually we quite like the look of it and so therefore we've invested in it."