It's a double act that's been on the scene ten years. Michael Taylor meets Ian Currie and Richard Hughes, founders of Manchester investment bank Zeus Capital
A couple of regular guys with a few quid tucked away or financial geniuses with an uncanny grasp of complex financial engineering. That's the mystery of Ian Currie and Richard Hughes, mainstays of corporate finance in Manchester for the last ten years, serial investors with something of the entrepreneur about them, but also difficult to pigeonhole or categorise.Currently the founders and directors of Zeus Capital, the Manchester-based investment bank - a business that's just chalked up its second birthday -, they've done different roles in different kinds of finance businesses, but the constant has always been the double act.
Currie, the elder of the two at 42, was a brainy accountant, one of the highest rated in the country, when he qualified at KPMG in 1986. He went into stockbroking at Manchester-based Charlton Seal where he met Richard Hughes, then a raw school leaver eager to make his way in the Manchester brokerage. Currie left but it wasn't long before he brought his hungry prot\xe9g\xe9 with him to Peel Hunt, another broker, where the two forged a reputation for deal doing and making money for their clients. Before long it also became the genuine relationship of equals that it is today.
From modest and low-key offices in Ralli Court, just over the Irwell on the Salford side, Zeus Capital is no longer just the current trading name of Currie and Hughes Investments. Put bluntly, they're really going for it this time. They've bought a Lancashire-based stockbroker, Hedley and Co, have opened a London office, moved into private equity and are eyeing up an institutional broking business.
Whatever the name above the door, the two of them working together has been constant. "Historically we've successfully set up financial services businesses in Manchester that have done well," says Hughes. "Apax and Altium were start-ups that we were involved with. We used to own 25 per cent of City Invoice Finance before we sold our stakes to management last year. We back ourselves and our judgements."
Notable among the investments the business has backed are the impressive list of shareholders and backers that they can pull together. Billionaires, footballers, serial entrepreneurs, family trusts, whatever and whoever they are - there are plenty of clients who keep coming back for more.
"Now we want to build an investment bank and use our skills and our money and our fan club, who are rich individuals worth anything from £35m to £31bn," he says.
What's more, they bring deals to Zeus that don't get on the radar of the traditional corporate finance merry-go-round.
The latest news to shake up the corporate finance world is the launch of an indigenous private equity business from the Zeus stable. Running that business is Gary Tipper, until recently the pugnacious and down-to-earth managing director of Aberdeen Murray Johnstone Private Equity. He's planning on raising funds once Zeus Private Equity has achieved its FSA clearance.
Hughes is clear that the business will differ from the dozen or more mid-market private equity players in Manchester.
"Gary will offer speed and deliverability. Businesses will be dealing with equity investors who are able to make a decision on the spot, not by committee like most of the other venture capitalists in Manchester. Gary's track record of investing in businesses and working with management teams speaks for itself."
It's the Zeus "fan club" that has proved so vital to the success of the business.
"If you analyse it, less than 5 per cent of the businesses we've invested in are actually based in the Manchester area," says Hughes. "We're able to win mandates without going through beauty parades. We've been fortunate enough to hear about deals way before anyone else does.
"Our fan club are key to giving us deal flow because they see that we're very good financiers. We're not really good business people. We're not retailers, we're not engineers, we're financiers and we can structure a deal better than anyone else. It has to be your role, to add value by the way the finance is structured."
Naming the fan club would be a fruitless exercise in shameless name dropping, but three examples show how the circle can be squared. One, venture capitalist Jon Moulton, founder of Alchemy, puts deals their way and Zeus has been principal financial adviser to Alchemy-backed businesses like Four Seasons Healthcare.
"We started with John Moulton when he was with Apax and tried to buy Wallace Arnold and merge it with Shearings. It didn't come off, but we worked on a few other things since. Jon Moulton uses us because we see ways of working that no one else would. We give people the right advice," says Hughes.
The second example is Richard Matthewman, Lancashire businessman and a director at Blackburn Rovers, where Currie watches football with his family. He's taken a stake in the business as well as being a loyal and satisfied investor.
Thirdly, there's Joe Dwek, chairman of Bodycote, a board director of the Northwest Regional Development Agency and one of the region's leading industrialists and business figures. Dwek has provided Hughes in particular with guidance and advice as he has seen the potential to transform them from hustlers into owners of a business with depth.
"Joe Dwek is one of the most impressive people I've ever met, real class," says Hughes. "He's intellectually demanding and forces me to think in new ways. But you can only look after someone like him if you're keeping him happy and making him money. Now we take his counsel because we've got a solid platform to build on," he says.
"We could keep our overheads low, make a few investments, do a couple of deals a year and make a good living. The other way is to reinvest, open up new offices in London, develop a private equity business by supporting what Gary is doing and build equity value in Zeus.
"The nice thing now is that we both sit on the boards of plcs. It gives us a sight of what's going on in the real world. We can also see what other advisers are saying. We recognise that Currie and Hughes in an office in Manchester has no value, but if we build a business with legs then it has huge value.
"We do have cracking people. It's not just about me and Ian, but we want to help Kevin Wilson and Alex Clarkson become millionaires and make them happy in what they do. The key to the business is to do it because you enjoy it, then after that it's all about determination and drive. You've got to care.
"Everyone talks strategy when you launch a business but it's all bollocks unless you generate cash and make profits," he says.
But whoever you talk to about the two of them, there's the view that Ian Currie is the cerebral accountant, who sits on the Princes Trust board, while Hughes is the rottweiler. It doesn't do justice either to Hughes' grasp of detail, nor to Currie's quiet steel.
According to Hughes, there are differences, but that they both share more than people imagine: "I'm definitely harder than Ian. I'm a nice person, I have integrity but I don't suffer fools. I'm sure you could go around town and meet a few people who'll slag me off, but would say Ian's alright. The thing is I can't be bothered with all that chumming and
arse kissing."
Between them, they've been through a great deal together, not least seeing their proposed buyout of Altium bite the dust, resulting in their year in the garden waiting to do Zeus.
That must have been frustrating for a couple of self-confessed workaholics? Not a bit of, Hughes says. He invested in Spanish property and other businesses. "It was probably the most profitable year I've ever had," he laughs.