Bob Diamond’s stockbroking business Panmure Gordon is merging with mid-market player Liberum to create what it claims will be the UK’s largest independent investment bank – supported by Diamond’s Atlas Merchant Capital and led by former Barclay’s exec Rich Ricci.
“This merger will lift the level and quality of service to mid and small-cap businesses and investors in the UK and beyond,” said Diamond. “These businesses are the lifeblood of the UK economy and require flexible and tailored solutions to enhance their productivity. This is a very powerful combination and I am excited by the prospect of Panmure Liberum raising the bar in the UK middle market.”
The former Barclays CEO Diamond bought a majority stake in Panmure Gordon through Atlas Merchant Capital for GBP15.5m in 2018 and quickly brought in ex-colleague Ricci as CEO.
The broker, which focuses on UK small and mid-sized companies, doubled its client list under their leadership, adding players such as former Aberdeen Asset Management Martin Gilbert’s new acquisition firm, AssetCo.
However, although it reported a profit of GBP3m in 2021, the firm has struggled with deal scarcity over the last few years – as well as the exodus of liquidity from the UK and a 40% decline in UK listings last year, while MiFID II’s unbundling hit research spend. In 2022, the firm posted a loss of GBP16.3m, with revenues falling 43% to GBP27.6m.
The new merger, brokered by Atlas, will bring the 118-year-old broker together with 16-year old Liberum in a partnership that the two firms believe will “reinvigorate” the UK’s struggling public equity markets.
“The creation of Panmure Liberum will ensure that together it has scale to be at the forefront of key market initiatives to reinvigorate the appeal of UK listed equities and of listing companies and funds in the UK,” said the combined entity in a statement.
The new bank, which with over 250 corporate clients claims to be the largest investment bank in the UK, will be chaired by Shane Le Prevost with Rich Ricci as CEO, former Liberum chief Bidhi Bhoma as deputy-CEO, and Liberum’s David Parsons (former head of equity sales at Citigroup) as head of equities. Panmure Gordon’s current head of equities, Richard Morecombe (former head of equities at Numis), will become head of origination and business development, while David Schamis and Sarah Raimi from Atlas Merchant Capital will also join the board.
The bank will have offices in London, New York, Leeds, Cambridge and Guernsey, and offer research coverage of over 580 stocks across the UK and Europe and trading relationships with over 900 counterparties, as well as acting as market maker in over 750 stocks with all-cap execution capabilities across the UK, US, Europe and Asia.
“In Panmure Liberum, we are combining two highly complementary and culturally aligned businesses and creating a new force in UK investment banking with an exciting long-term future,” said Ricci. “We have long admired the impressive track record that Liberum has built in its 16-year history and we now look forward to building on that momentum together.”
“Combining the financial strength of Atlas Merchant Capital with our culture of employee ownership is a highly compelling proposition,” added Le Prevost.
The merger is the latest in a line of similar deals as UK brokers struggle to adapt to a new, tougher climate. Numis last year sold out to Deutsche Bank for US$500m, while Cenkos Securities and Finncap merged in a GBP43m deal to form Cavendish.
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