Close

Not a member yet? Register now and get started.

lock and key

Sign in to your account.

Account Login

Forgot your password?

THE ARTS COMING TO THE JSE

01 Jun General

Diagonal Street is currently devoid of artistic listings. Happily, the gap will be filled soon, when specialist finance house, Mettle, lists on the JSE’s main board. “We make our money through financial artistry,” declares managing director Ian Matthews, who stresses that the type of work conducted by his organisation truly defines what is perceived as intellectual capital. Soon to report for its third full financial year. Mettle’s taxed profit will be close to R30 million, setting the group up for a stock market debut that will differ significantly from competitive predecessors. Mettle will break the mould by offering very few private placing shares to the institutions. Instead, close to 50 percent will go to staff, all of whom will participate. At present, nine of the company’s executives hold nearly 40 percent of the equity. In normal circumstances, empowering employees in this way requires an extensive education programme. In Mettle’s case, however, most of the staff are intimately familiar with the stock market’s machinations and therefore need no further enlightenment. Mettle’s roots go back some four years, when Matthews, along with 10 colleagues from Arthur Andersen, left the accounting firm to form Boland financial Services. “We were doing work for Christo Wiese, who had just bought Boland Bank. We suggested to him that Boland set up a merchant bank, with Boland owning 60 percent of the equity and ourselves the balance. That’s what happened.” Since then, the shareholdings have changed, with management and staff currently owning closer to 40 percent and black empowerment investment group HCI and BOE owning the balance in equal shares. Matthews grew up in Cape Town, got his tertiary education at Stellenbosch University and did his articles with Arthur Andersen in Johannesburg. He remained with Andersen, where he worked in the firms tax/legal division between 1989 and 1995. Matthews and his colleagues needed to differentiate themselves from a whole host of so-called niche banks that had begun to proliferate at that time. What they did was to assess their expertise in, particularly, financial services in the banking industry. “We’d done a lot of work, historically at Andersens in this area, especially in the area of structured finance products,” say Matthews. “We concentrated on that area as an initial focus and then expanded into corporate finance, using the same type of skills and industry knowledge. Thereafter, we went on to establish a treasury function.” In other words, the bank’s founders were determined to stay within specific areas of expertise. Matthews emphasises that Mettle has come across a number of opportunities to go into asset management, private equity, securities trading and other banking-type activites. “But our expertise does not lie in those directions. Some of our competitiors are going into anything and everything. We believe that’s wrong. Mettle, on the other hand, strongly believes it should focus on its chosen areas of expertise. Our real strength lies in being the best in every area in which we trade; to specialise in these areas not only on the domestic front but on a global basis.” Mettle has taken up the global gauntlet by having opened a London office on February 1, 1999. Matthews is confident that enormous potential awaits Mettle overseas, particularly when it comes to assisting its corporate finance clients. “We have a very specific set of skills. We have grown and honed them and are ready to apply them in other markets. This, as much as anything else, differentiates us. “Our competitiors are trying to spread themselves into wider, broadly based financial services. Many find safety in having a spread, they believe they protect their client base by offering everything. I don’t believe that is the way to attract clients; you do so by being the best in the market.” Matthews maintains that Mettle’s differentiation penchant goes yet further, “our people think laterally. They tend to be slightly off the wall; they think dfferently, about things; they try to find new, substantially added value solutions to old problems. The ideas might look ludicrous at first but when implemented often work extremely well. Our clients find this approach refreshing, and profitable.” This, he believes, makes working for Mettle exciting. “Our people love being innovative and creative; seeing the new vision, the new road. It’s all about financial artistry. They get bored doing the same thing. They have to be challenged.” Mettle’s people are clearly exceptionally talented Matthews stresses that they also need to be exceptionally responsible because “they want to take responsibility, to take control of their lives and their careers”. “We want them to be that way, because if they aren’t we won’t outstrip our competitors. We need to grow faster than they are by being more innovative. New products, which translate into bigger profits, command a premium. Bring a standardised product to the market and it becomes a question of who can offer it at the best price. We don’t want to compete on price but on intellectual capital that we can bring to the problem.” Right now, Mettle is building sufficient annuity income to cover its revenue projections and earnings for the next three years. It is currently generating a 25 percent return, one of the South African banking sector’s highest. Mettle employes 70 people, more or less equally spread between Johannesburg and Cape Town.

Source: Accountancy (Profile)