Broking's odd couple are scaling the heights, as shares go past them in the opposite direction
Their backgrounds are different but their outlook is the same. The founders of Mint tell Margareta Pagano why 'now is a great time to expand'
Sunday 20 July 2008
They interrupt each other, disagree a lot, finish off each other's sentences and laugh all the time – a sort of happy odd couple. One half is Richard Barnett, an East End Jewish chap who hated school, left at 16 and fell into insurance broking, wears a tie once a year (at Ascot) and is a Tottenham Hotspur fan.
The other half is Tim Bullman, known as Raging Bullman from his boxing days, who went to Millfield, studied town planning and is sending his son to Eton. Put the sharp and the smooth together and you get the subtle mix that has oiled the City for decades, centuries even. Or, in their case, you get Mint, an independent agency broker set up by Barnett and Bullman three and a half years ago and which is going a storm, even in these hairy markets.
We meet in Mint's offices at 80 Cannon Street, the glass structure criss-crossed with steel next to the train station, from where there are stunning views of St Paul's Cathedral.
Up on the eighth floor, Mint's reception feels like the New York subway, dark and brooding, the walls covered in graffiti art. But once you get inside the office itself, the trading floor is light and airy. The mood, however, is blood red; the Dow Jones has just crashed another 200 points or so overnight as the US markets go into financial meltdown. The brokers are shouting at each other as they watch share prices in the US and the UK slide deeper into bear territory. Whoever thought open-cry broking was dead didn't anticipate markets like these.
"It's scary, all right," says Barnett. "Scary and hairy. It's by far the worst I have seen in my lifetime. When you have these sharp, gaping drops and big volatility, it's difficult to put through trades. Share prices falling 10 per cent in a day instead of the usual 1 per cent is madness. And I'm not sure we're anywhere near the bottom."
Bullman adds: "Headlines are driving the markets. It's day to day."
Not the greatest time to be building a broking business, then? He disagrees: "The story is to build the business but keep cutting the costs. It's going to be tricky but now is a great time to expand."
They have just taken another floor at the Cannon Street building and recently opened a small office in Paris. Revenues have doubled each year and they predict another doubling to $70m (£35m) this year.
Mint, which describes itself as a hybrid inter-dealer broker to mini-investment house, now employs around 100 brokers and support staff, dealing mainly in equities but also fixed income, energy, metals and futures. They clear through Goldman Sachs and Fortis and look after 500 clients, including big institutional investors, mutual funds and hedge funds.
Mint nearly didn't happen, says Barnett. "We were working for big broking firms but became disillusioned with the work, and the City. We were thinking about leaving it for good." Bullman adds: "Maybe they didn't want us working for them." Or, as Barnett puts it: "More like we weren't very good at the politics."
Happily, neither of them is disillusioned any more; they're fired up and ready to take on the big boys. You only have to spend a couple of minutes in their company to find their enthusiasm infectious, which is rather nice amid the doom and gloom elsewhere in the City today.
Barnett, 39, and Bullman, 41, had known each other for years while on the staff of rival broking firms. Then they worked together at Eurobrokers. But it was after a stint at Tullett, now part of Collins Stewart, that Barnett decided to set up on his own and called Bullman, who says he was ready to quit the City.
After much chat and a good deal of wine, the deal was hatched at the Balls Brothers wine bar in Blomfield Street. They put up about £200,000 each, borrowed against their houses, and tempted family and friends to invest as well. It was a good decision: Mint has been making money since day one, though the profit has all gone back into the business. Now it is going through a new financing to help fund the next stage. This should leave the two founders with about a third of the equity each.
From the start they have been encouraged by Meryvn Davies, chief executive of Standard Chartered, a close friend through a shared passion in Spurs. Davies has introduced them to Fleming & Family Partners, now their adviser, where he is chairman.
Mint's staff own about a tenth of the equity in the broker, and having shares and options is encouraged. Neither Barnett nor Bullman is big on titles, calling themselves simply directors. They have a robust chairman in David Mills, a former County NatWest banker; Andrew Herrtage, an ex-GFI broker, is finance director.
They anticipate floating or selling the business in five years or so. As Barnett says: "We're not naive – we know anything can happen. But we'll keep building this while it's fun. It's like a family at the moment, but what happens when we double in size?"
Both claim to be hopeless at numbers so it's just as well they have a talent for wooing clients. They agree that good relationships are why broking is not dead, despite the Cassandras who have been sounding its death knell for a few decades now. As the big inter-dealer brokers such as Icap and Tullett have shown, you still need a face behind the screen.
Barnett says: "If you go back 15 years, everybody said broking was dead. That was partly due to the growth of electronic trading. But what has happened is that people prefer a hybrid of voice and electronic."
Mint's economist, Geoffrey Wilkinson, heads its research team, which advises clients on market trends. Wilkinson is also advising Lex Van Dam, the top hedge fund trader behind the BBC's forthcoming reality TV show, Traders, in which six contestants will be taught the dark arts. Mint's trading floor was nearly used for filming, but its bosses reckoned it would be too much of a diversion.
Still, they like to keep Mint's door open to new and unproven talent. "We don't care about the CV," Barnett explains. "If we think someone has something interesting to offer, we'll invite them in for an interview."
It's refreshing that Barnett hasn't forgotten his own background. The entrepreneurial spirit in his family, he explains, has deep roots. His mother, Pauline, has always run her own businesses, and in her role as deputy chief executive of the East London Small Business Centre, she has helped more than 1,000 start-ups – an achievement that was recently recognised by the Queen's Award for Enterprise.
As her son says: "You've got to give everyone a chance."
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