How leading a young investment house mirrors sporting success

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CORNELIAN Asset Managers, the investment house which spun out of Noble Group, has grown its funds under management to £250 million - a stellar achievement from just £28m in November 2002.

The Charlotte Square firm, led by former Scotland rugby internationalist Jeremy Richardson and chaired by David Ritchie, the former chief investment officer of Scottish Widows, is hoping to continue this upward trend by raising Cornelian's managed assets to 1 billion within five years, possibly by acquiring rival firms.

It means the firm now sits just outside the top 20 Scottish fund managers.

The firm bases its business on managing mandates from charities and private clients with more than 300,000 to invest.

Last year, Richardson poached a top adviser from Adam & Company which has helped bring in new charity mandates. June Jessop, a former investment director at the Royal Bank of Scotland offshoot, joined Cornelian as a board director and head of charities and is one of a handful of Scottish experts in the charity market where it is now compulsory for trustees to seek investment advice.

"Charity portfolios are always going to be there, and if you have turbulent markets then this is a good business to be in. We have 18 charity portfolios and this is an area we want to develop," says Richardson.

However, pursuing a business career was something of an accident for Richardson, who fell into investment management because he couldn't decide what to do after graduation.

"My family didn't have a business background as my dad was in the army. During my childhood, we moved 17 times and lived in Germany, England and Northern Ireland. When I left Heriot Watt University in 1986 with a business studies degree I had no idea what I wanted to do.

"I didn't do a gap year because I had no money and needed a job so I was introduced by a girlfriend's father to some Glasgow bankers. When it was suggested I should think about stockbroking, my answer was 'what's stockbroking?' but after three interviews and two job offers, I joined Greig Middleton in Glasgow as a trainee."

Despite his perceived lack of business acumen, Richardson brought on board two snippets of advice from his father which remains relevant today.

"My father advised me to stick to orange juice at lunchtimes and always look for the net real returns after tax and costs.

"Lots of people forget these little things. I stuck to the orange juice rule for as long as I had to, but remain always looking for net real returns. This rule stands the test of time and is one I will never forget.

"As for growing the firm, we would look at acquiring similar companies, or those which could extend our range. However, we are not looking for growth at any cost. Acquisitions cost, we would need to look at it as a business, our shareholders would need to be willing to dilute and, most importantly, it has to make sense to our customers and again, we are back to my father's advice of net real returns," adds Richardson.

Last year, the firm introduced the Cornelian Buyout Fund, raising 9.7m during its five-week launch and it was shortlisted for the Scottish Financial Enterprise Innovators Award. With brother Guy, current manager of the Scotland international rugby team, sport is obviously in the family blood. The similarities between the skills needed to lead a developing investment management firm and success on the field are both reliant on building a team of motivated key players, says Richardson.

He was approached by Noble Asset Management in 1992 to set up their subsidiary in Edinburgh, after five years at Greig Middleton - a massive risk with just three staff.

"I joined from a big firm that had full infrastructure support, with IT and investment management systems fully in place. When we came to Noble, it was just us. We had to do everything ourselves but it also provided clear accountability and control. There were pros and cons to being involved in the start-up. I had only been working in the business for five years, but you have to trust your gut instinct.

"Looking back it doesn't seem as risky as putting my house on the line with three small children to fund the management buyout. It was a great opportunity and I focussed on that rather than the threats."

In 1992, the business prospered with a small amount of clients. In 1998, the investment market was rocked by a Russian crisis in currency markets, the collapse of the Long Term Capital Market hedge fund, and spiralling investment funds. Noble Group were considering their succession issues for the firm and in June 2000, Richardson led the management buyout.

"I borrowed money and used the security of my house. It was a risk. It wasn't easy and you have to agree a price and then deliver. In June 2002, we brought in Marcus Brooks and Richard Allison and they both invested financially in the business."

Richardson rebranded Noble Asset Managers as Cornelian in 2005 to stop any confusion linking them to Noble Grossart and Noble Group.

Richardson says the firm needs to focus on winning clients and making money.

"All delivery is in the past, so we have to keep growing the business and taking on new customers.

"We never want to forget it is the customers who got us to where we are. We invest in our own funds. It doesn't guarantee success but we are eating our own cooking."