City tycoon in surprise exit from broker Numis

Spencer raises £16m from sale of stake he had pledged against loans
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The Independent Online

Michael Spencer, the Conservative Party treasurer, took the City by surprise yesterday, announcing that he has sold his 12.2 per cent stake in Numis and will step down as chairman of the financial services company, a move the company explained by saying he wants to focus on his other business interests. IPGL, a vehicle that is 55 per cent-owned by Mr Spencer and his wife, sold its entire Numis stake for 120p a share, raising almost £16m.

The sale follows the disclosure last month that IPGL’s entire Numis holding had been placed as security against a loan agreed on 6 October with HSBC by Mr Spencer, who was Numis’s second biggest shareholder. A spokesman for Icap, the interdealer broker where Mr Spencer remains chief executive, declined to comment on whether Mr Spencer has now repaid the loan.

A source close to Mr Spencer said that a large part of the Numis holding was bought in 2003 for about 63p a share – half the current price – suggesting Mr Spencer booked a hefty profit on the sale. The stock sold was placed with institutional investors, Numis said.

Mr Spencer has chaired the company, which provides financial|services such as company research, brokerage and advisory services, for five years, and said yesterday he planned to pursue other business interests.

In his time as chairman of Numis, the firm has tripled in size, going from 62 employees and 40 clients to 190 staff and 116 corporate clients, as the Alternative Investment Market-listed financial firm has established itself as a credible institution.

“Michael goes at 100 miles an hour and is a serial entrepreneur,” said Brian Winterflood, a City veteran and founder of rival brokerage Winterflood Securities. “He is a mercurial character who is always looking for a new game.”

However, while Mr Spencer has many other business interests to focus on, the deal will raise eyebrows in the City. Many analysts were surprised by the revelation that his Numis shareholding had been pledged as collateral on a large loan, particularly as it then emerged that Mr Spencer, one of the UK’s richest men, had also pledged a substantial chunk of his 23 per cent Icap holding against borrowings.

Mr Spencer separated from his wife last year, but sources close to him played down any link between the separation and yesterday’s share sale. He retains 20,000 shares in Numis, as a personal holding.

The Conservative Party treasurer’s other business interests include the financial spread-betting firm City Index, which he owns, as well as a headhunting company. Turftrax, another spread-betting firm, focusing on horseracing, in which Mr Spencer holds more than a third, had its shares suspended on Monday after failing to secure a much-needed cash injection.

Mr Spencer has also made strides as a philanthropist in recent years. Icap holds an annual charity day on which celebrities answer the group’s telephones and the day’s commissions are donated to good causes. Mr Spencer is also an avid collector of art, in particular the paintings of the Scottish artist Jack Vettriano.

“We have been incredibly fortunate to have someone of Michael’s stature and calibre to help guide the management team in developing the business and getting it into the right shape to serve the needs of our growing client base,” said Oliver Hemsley, the chief executive of Numis. “He will be missed, but will remain a close friend of the firm.”

Mr Spencer will remain in his post at Numis until a successor is found.

Mr Spencer founded Icap in its first guise in 1986 as a firm called Intercapital, initially to concentrate on the interest rate swaps market.

In October 1998, the firm merged with Exco, a listed money broker, and formed Intercapital plc. This merged with rival Garban in 1999, adding government bond expertise, before renaming itself Icap in 2001.

As well as his role at Icap and his other business interests, Mr Spencer also moves in political circles. The businessman, who was born in Kuala Lumpur, Malaysia, is a close friend of the Tory leader David Cameron, a factor in gaining his role as Conservative treasurer.