Me And My Partner: William Carey and Nigel Legge
William Carey was recruited by Nigel Legge to his sales team 13 years ago. Nine years later, the pair established River and Mercantile Asset Management, specialising in the UK stock market. They now manage pounds 550m on behalf of 7,000 clients
Wednesday 24 March 1999
I was out on the road four days a week, with five appointments a day. I explained to clients that I was new to the job, but they could ask me any question and I would get the information for them. I enjoyed the role of selling enormously, but it was a big company and there were a lot of people above me. I was keen to look at other sides of the business, and I was offered another job as an investment manager for an independent financial adviser, the John Lamb Group.
Then Nigel, who had been offered the job of sales director at James Capel, said: "Here's a hell of an opportunity - do you want to come and join me?" That put me in a difficult position because I had made a big decision to join the John Lamb Group. I jumped on my motorcycle and went to see the two owners of the group that evening. They thought I should take it, so I joined Nigel.
When I started at James Capel, our job was to raise money as quickly as possible. We were able to offer clients something different: people liked the idea that we were recommending James Capel products, because the name had a certain pedigree. We started as a small team - just 12 - but as it grew, Nigel became managing director and I was sales director for European business.
We have always worked incredibly closely. During that time, we grew to know each other very well. Then in 1994, I got a call out of the blue, asking whether I would be interested in setting up a unit trust company. I thought there was no point in leaving a big company to join another unless you got equity. But the carrot was there.
I didn't feel I had the confidence to be the lead man, so I spoke to Nigel and we decided this was very much something we would like to do. We realised we would never have tried to set up a company called Legge Carey, but what was presented in this company was a name - River and Mercantile - that had been around for 108 years, with existing funds under management, and we could call the shots. That was very interesting and very exciting.
We wanted to challenge some of the conventional thinking: that you had to be a big company to be in fund management, for example. I think people thought we were mad, but nobody can criticise you for having a go. Soon after we started trading on 14 July 1995, our parent company sold off the investment trusts to other houses. That changed our perspective on life. We hadn't thought it was a possibility when we joined, but it did make sense because they were complex structures and due to wind up in the year 2000. But we could no longer say we had pounds 400m under management, so that was quite a frightening moment. How were we going to persuade fund managers to join us when there was nothing to run? We were told we had to cut costs by 35 per cent, and we had a pretty open meeting with all the guys who had joined. We said: "We can cut staff, or we could take a pay cut." We didn't lose anyone, but people took that big cut, and I think they knuckled down. They were always convinced that we could do something. The most satisfying moment was after about 18 months when we made more money than we spent. That relieved a lot of the pressure about one's responsibility to the people who work here. It would have been difficult for one person to have not gone completely bald during that first period. But we shared it. Nigel is an optimist and very positive. He is good at talking to the press and is passionate about the industry. My role was to look after the people in the business. It's the combination that's so good.
We have been able to achieve things without causing a lot of upset. A lot of people are successful but they haven't half trodden on toes to get there. I would like to think River and Mercantile has a nice, informal but professional environment, and that everyone feels they know us well. You have to be able to trust people, and our whole style has relied on trust and openness. It's useful to have team support, where you are looking out for the others.
NIGEL LEGGE: I was at Henderson when I met William - the interview lasted seven minutes, and although it wasn't long enough to tell if he had the talent, he seemed like a pretty solid, nice guy, and someone I could work with. I enjoyed sales and marketing because there was nothing travelator- like about it - you weren't in the office, thumbing through boxes of cards, but you were entertaining people and communicating - and the people I was working with were like-minded.
What was particularly refreshing was the complete honesty with which we admitted the things we didn't know. William would say: "I don't fully understand investment, but I wouldn't be here trying to encourage you to buy if I didn't have tremendous confidence in the people who are doing it." It was an open, trusting approach to get people to invest with us. We didn't want to hoodwink anybody. If we could build our business round transparency, integrity and honesty, I thought we could achieve something. It was an environment where you could respect and work with each other's strengths and weaknesses, which is why William and I have stuck together for so long. I am much more impatient than he is, but we have learnt to act as a foil to each other.
I left Henderson in 1988 for James Capel. William had left to become an investment manager for private clients - he was slipping over to the other side of the fence, and it was a valuable period for him. Then he and Richard Farquhar, who is now also at River and Mercantile, joined James Capel, and we had a good sales team because we enjoyed each other's company and did business with people who were happy to do business. It was fluid and never felt hierarchical - there was a strong chemistry between us. We experienced huge expansion, and James Capel became part of HSBC. One aspect of William's responsibility was looking after the PEP business, which was complex and highly regulated and therefore needed a safe pair of hands. It also helped that William is a great diplomat.
It just followed on that we would set up together. We would kick around ideas of what we thought we would do, unless it was blindingly obvious - in which case we would just do it. In bigger companies, you have to manage in the way that gives you the best chance of further progress - which is about politics. What's important is delivery. William and I are both quite strong-willed, and we have occasionally disagreed, but it now gets resolved quickly - when one has a firm view on something you can say: "I really don't think you are right on this one."
I remember at James Capel people always talking about the future. We had a fantastic role, and I remember saying to William: "We are not going to go anywhere - unless we are given a chance to do our own thing." The opportunity came up soon after, through a contact of William's. The crunch came when it was time to leave: it was very difficult and we had huge trepidation, but there was a certain pull. It was something we had to have a go at. We felt there was a good chance that we might be able to build something. I don't think either of us wanted to get to 60, only to think: "We should have had a crack at it."
William is now the godfather to my one-year-old daughter, which is nice after all the ground we have covered. We now have pounds 550m that we manage for other people, which is considerable growth, and progress beyond all our expectations.
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