EDINBURGH-BASED investment house Martin Currie has seen rapid growth in recent years. It almost trebled its funds under management from £5.5 billion in 2002 to £15.7bn last year.
And such has been the success of the company that flotation was seen as the next logical step for a business seeking further expansion.
However, in an interview with The Scotsman, Willie Watt, chief executive of Martin Currie, has ruled out – at
least in the short term – floating the company.
Watt stressed that any sensible firm should never say never, but it seems clear that a stock-exchange flotation is not part of his immediate plans.
But that does not mean that the company lacks ambition.
From its base in Scotland's capital, Martin Currie invests in international equities for its clients, mainly pension funds and high net worth individuals.
On the back of its success in the first part of this decade, the question being asked was how the employee-owned firm could move on to an even higher level. That in turn led to speculation that the business – established in 1881 – would float on the stock market to raise capital.
And the speculation intensified when Martin Currie sold almost 25 per cent of the firm to two external investors last autumn.
In September, Crestview Partners, a New York-based boutique investment firm, took a 17.43 per cent stake, while 7.47 per cent was bought by the family interests of Lord Jacob Rothschild.
Around the same time, Martin Currie appointed Scott White, who had managed public relations for Standard Life during its flotation, as its director of communications. The Edinburgh rumour mill suggested White would help take his new employer through the same process.
Watt told The Scotsman: "If you're the chief executive of a medium-sized company, you need to consider different ways of raising capital. To not consider flotation would have been negligent.
"But I don't necessarily think it's a route that I would see us going down. That might change as flotation is something you have to look at every couple of years."
According to Watt, bringing in the external shareholders, while leaving the majority of the firm in employee ownership, removed the need to list on the stock exchange for the time being.
But there are no plans to sell-off any more of Martin Currie as employee ownership is important to its investment approach. It positions itself as a "big boutique", which means that, despite is relatively large scale, people are at the centre of the business.
"Our approach is that we believe people make a difference to investment management. If you get the team working together effectively you'll get a better result," said Watt. "Companies are social as well as economic organisations, We use the 'big boutique' tag to mean a certain way of doing things that is distinctive from the behemoths of the industry and the very small, ten-man business that might run a hedge fund."
What makes Martin Currie distinctive is that everyone has the chance to have a share. There is also a limit on how much individual directors can own.
Watt said: "We actively discourage the concentration of share holding in a small number of people."
This approach seems to work as Martin Currie has staff turnover of less than 5 per cent, compared with an industry average of between 10 and 15 per cent.
Despite being something of an Edinburgh institution, Martin Currie is surprisingly cosmopolitan in the make-up of both its staff and its clients.
The majority of its fund managers have come from outside Scotland to work in the capital. As a global business, its equity investment funds attract interest from across the world. About 30 per cent of its clients are in the United States, around 25 per cent in mainland Europe and 20 per cent in Asia.
Unlike competitors which have diversified into other asset classes, Martin Currie has stuck to actively managing equities. While equities are at the mercy of the current turbulence in world markets, the wide geographical remit helps reduce risk. But Watt admitted times are likely to get even tougher.
He said: "The US is probably going to go into at least a technical recession – two quarters of negative growth. There is also a downside scenario significantly worse than that.
"I think the UK will slow but may not go into recession. Put all that together you get an uncertain scenario for 2008 and into 2009."
Watt sees his role as one of navigating the turbulent times to take the business through the next growth phase. Given his track record, the chances are that he is likely to succeed.
