TEAM robust business model with more growth to come (LON:TEAM)

TEAM plc (LON:TEAM) Chairman Mark Clubb and Chief Financial Officer Matthew Moore caught up with DirectorsTalk for an exclusive interview to discuss what the company does, aspirations going forward, financial backing, reasons why the company will be a success and what we can expect in the coming months.

Q1: Mark, if you could just start by introducing yourself and tell us who TEAM really are.

A1: I’m Mark Clubb, Executive Chairman of TEAM plc and the company is a new Asset Management and Complimentary Financial Services business, headquartered in Jersey in the channel islands, one of the major, if not THE major international finance centres. To date, we’ve made three acquisitions and we’ve raised about £10 million of new money to go towards financing that.

We provide a range of services that include what you could consider almost like a private bank type service, but without the banking bit so everything from asset management, which is where our heart lies, to advising clients on pensions or savings products, to looking after their cash and also some lending, be that mortgages or Lombard lending. Currently, we cater mainly for local clients and increasingly so for what I would describe as the internationally mobile client that lives outside the UK and that’s quite important.

We listed back in March last year and in terms of scale, we’ve grown to assets under management or under advice of just short of £2 billion, when you include our cash management business.

We are looking to grow and  I think that’s the main thing. It’s about growth, not just in our local market, although we will continue to look to increase our market position penetration locally, but we also are looking to establish offices elsewhere, overseas, but Jersey will always remain if you like the hub or the nexus or the custodian of our clients assets.

Q2: What was the idea behind starting the business and what are your aspirations for it going forward?

A2: I think the best businesses are businesses that are started by their clients really, I listen a lot to our clients, we all listen to our clients, I’d been managing wealthy people’s money for just over 10 years, having had a career in investment banking before that at places like CSFB, BZW, UBS.

The thing that came through from my clients was they wanted something different, something that was contemporary but also that had something of a personal touch and also a broader range of services, the one stop shop approach. The entrepreneur in me was intrigued and then committed to trying to build something that catered for that client and that’s what we’ve done and we will continue to do.

It’s a very, very fragmented market, everything from the very large, big banks, all the way to the very small, small independent advisors, 2/3/4 individuals and that’s the opportunity. The opportunity from an acquisition perspective is providing these people with a home, many of them have got succession issues and also, they lack the platform if you like and we will look to provide that.

I believe that we do have the entrepreneurial background, Matthew will talk a little bit about his, and we are relevant in today’s world for the massive intergenerational wealth change that is going to happen.

So we incorporate all the good things about the evolution of investment management, ESG, impact investing, sustainability but at the end of the day, it’s also about making good returns and we are pleasingly building a very good track record for producing above market returns across pretty much everything that we do.

We can’t take away though the fact that we are ambitious and we will continue to grow and that’s the point of being listed.

Q3: Matthew, who is backing you financially and why did you list on AIM?

A3: We are unusual in as much as we’ve chosen to list on the AIM market, London Stock Exchange, most companies of our size and stage of development are probably backed by private equity and private money and we’ve done this for a number of reasons.

First of all, we’ve been lucky enough to be backed by some of the leading household names in investment in the UK as our cornerstone investors so we have Andy Brough at Schroders, we have Giles Hargreave and Guy Feld at Marlborough Fund and we have Richard Pease and Richard Penny from Crux. Now, normally those sorts of funds wouldn’t invest in the company of our scale but they believe that we are going to be a significantly bigger company in a few years’ time and they’re going to be able to make a good return for their fund investors.

The second group of investors is well it’s Mark Clubb, who is the biggest shareholder in the company, he holds just less than 20%, and all the Board holds shares. I think it’s just worth making the point that all of the money Mark is paid, he puts back into the company through buying shares so Mark is fully committed to the success of this business.

Third group of investors will be the clients that Mark has been managing money for, for the last decade plus. They back him both to run their own money and they back his judgment so they’ve been successful in their own careers and their supporting Mark in this venture.

The final group is that we have also attracted various ultra-high net worth investors such as Martin Gilbert of Aberdeen Asset Management. Now they’re looking for a financial return, that’s why they’re investing us and we fully expect to deliver such a return to them.

One of the benefits we see of being listed is that it also enables us to access the retail investment market, which we see as being a significant part of our funding in the future. It’s also something which we think helps us as a business so we know that our staff and our clients and some of the people we want to do business with, in the future so particularly in buying companies, it’s easier to do so when you have listed paper to help fund some of the transactions.

Q4: So, what are the reasons to believe that the company will be a success?

A4: We believe that the business model that Mark and I have put together is robust, it’s scalable, and most importantly, it’s profitable and alongside that, Mark and I are confident that we can execute on it.

Mark’s talked about his experience founding and growing various businesses. Similarly, I was in the city, I used to work at Ernst & Young and then Cazenove and then ING Barings and Close Brothers and my most recent company was a wealth manager in the UK, which has recently sold for a very good price indeed. So, I think we have the execution experience amongst us.

There’s also the fact that the general market for the services we provide are very strong, Mark’s talked about the intergenerational wealth transfer, he’s talked about the strength of our investment proposition, there’s all the usual things about an aging workforce with self-provision for retirement required and these things are all genuine forces, which we see driving demand for the services that we provide.

Final thing I would say is that the competition that we see from the incumbents is not stepping up, in fact in Jersey in particular, we see there are incumbents who are stepping away from the Jersey market to focus on their core markets, leaving our core market somewhat less competitive for us to take market share.

Q5: Mark, just turning back to you, what should we expect to see from TEAM over the coming months?

A5: Growth. More evidence of growth, be it acquisitions or results but this is the first interview we’ve done with DirectorsTalk and we very much look forward to doing many more over many years.

The next set of broadcasts I think that we will do is we want to make sure that our shareholders or potential shareholders understand our business a bit better and so we plan to do some more interviews with other individuals within the business, in the various disciplines that we have.

But why do you do these things? You do these things because you want to spread the word and you want to spread the word efficiently. It’s a bit of a bee in my bonnet that I think that over the last two decades, companies have become more inaccessible to private individual investors. I think that’s a backwards step and I will make it very much a priority that we, as a company, are always accessible to private client, individual shareholders, after all we look after those people so I’m very keen to encourage openness.

The last message really, I want to get out is why does one invest in a small company like ours? Why am I invested so heavily in such a small company as ours?

That is because of growth and it’s a lot easier to move something from our size to double that size than it is to move a super tanker with a billion market cap up 100% so we really are about growth. If you invest with us, you are investing in growth.

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