When I lived at Barmeath I was a young dabbler in the stock market using my grandfather’s broker, Dudgeon, in Suffolk Street, Dublin. They were an old-fashioned firm whose partners were all known to my grandfather as friends or relations. On important occasions such as the Irish Derby there would be no partner in the office and so it was impossible to place a trade. When my brother moved back to Ireland in the 1970s more often than not they booked his trades to my grandfather’s account or vice versa; an Old School firm.
When I started working in London in 1976 my uncle recommended Pidgeon Maguire but if I needed to deal on the Dublin Exchange I stuck with Dudgeon who were soon absorbed into Goodbody and Wilkinson, in Crow Street. This all changed when Alan Tinsley joined Grenfell and Colegrave and since about 1980 I have followed this firm in its many changes of ownership. Alan has long since left the City but his colleague, Trevor Watmough, has proved a safe pair of hands and has provided continuity for thirty-six years. Looking back on those early days with G&C I see that in 1980 alone I have twenty-six Contract Notes. It seemed fine at the time but these days would be regarded as “churning”.
The partners at G&C scooped the jackpot at Big Bang, selling the firm to CIBC Investment Management. It stands for Canadian Imperial Bank of Commerce. I had never seen a trading floor before so was mightily impressed when I saw their’s on the south bank of the Thames in Cottons Centre. At the time it was the second largest in the City and, even at the time, I did wonder how the G&C business would contribute to the overheads that included a magnificent suite of dining rooms looking over the river.
The short answer is that they didn’t and Trevor and his G&C colleagues moved to Henderson Crosthwaite in St Mary at Hill. They are now part of international, FTSE 250, financial services firm, Investec. I sense that Trevor’s team find working for a big shop less congenial than in the old days but this seldom has any impact on me. I get the same friendly and efficient service that I got pre Big Bang, only occasionally being baffled by their arcane rules.
Let me tell you about one, which is rigidly applied. If on the telephone or over lunch I ask Trevor to invest some money for me he does so on that day and sends me a Contract Note for settlement. This is fine and shows a high level of trust in me. However, if I send him a cheque and ask him to invest the money he has to wait for the cheque to clear and then wait an additional twenty-four hours before he can execute the transaction. But, though I have never been invited by them (Trevor doesn’t like opera), they do sponsor Opera Holland Park.
Periodically Investec send me their newsletter, Private Insight. This is seldom of any interest but an article by a financial journalist in the most recent edition caught my eye. She makes a range of suggestions for maximising income in this era of low interest rates and suggests City of London Investment Trust, so I took a look. At first sight it ticks a lot of boxes. Founded in 1891 it has £1,417 million of assets, yields about 4%, has a low fee of about 0.4% and remarkably has increased its dividend every year for the last fifty years. I’m almost ready to recommend the shares but not quite.
First they put 75% of their fund in big UK companies and the rest in the US and Europe. There is less than 0.1% in Singapore and Hong Kong. This is a big vote of confidence in the UK at a time when growth in emerging markets should outpace old western economies.
Secondly, the shares are trading at a premium of about 2.5% to their net asset value and I can never bring myself to pay a premium for an investment trust. One to put on the Watch List for now.
By the way, I was a broker myself (in futures markets) so of course I think Balzac was a bit harsh:
“I do not regard a broker as a member of the human race.”
Bismarck was closer to the mark when he said: “… an honest broker who really wants to press the business forward”. Although I suspect that I have taken that quote out of context.