25th January 2021, 6pm - 9.30pm

Programme

Company Presentation 

HeiQ

HeiQ is a pioneer and at the forefront of global technology in the $10 billion antimicrobial fabrics and $24 billion textile chemicals market. With the focus on materials and textile innovation, HeiQ has created some of the most effective, durable and high-performance technologies and textile effects in the market today, which cool, warm, dry, repel, purify, and destroy viruses. Since 2005, HeiQ has developed over 200 technologies in partnership with 300 major brands.

HeiQ is a high intellectual capital company which has successfully built up a reputation in textile technologies, having won multiple awards and innovating with leading eco-conscious brands such as Patagonia.

Led by an experienced management team, HeiQ rapidly researches new solutions for partners, quickly delivers scaled up manufacturing from its sites across the world and helps partners market the product to end consumers – aiming for lab to consumer in months.

HeiQ aims to deliver growth for its shareholders through a combination of increased sales of its core products and by entering additional lucrative markets through disruptive innovations.

Carlo is a co-founder and serves as Chief Executive Officer (“CEO”) of the HeiQ Group. Carlo studied Environmental Sciences and Forest Engineering (MSc) at the Swiss Federal Institute of Technology, ETH Zurich. He earned his Executive MBA at the University of St.Gallen (HSG). After his service as an army pilot, he started his professional career as co-founder of the ETH spin-off, myclimate, a non-profit organisation and prominent provider of carbon offsetting measures. Since 2004, Carlo has served HeiQ as co-founder and CEO, developing the firm from a two-employee company to a 90 employee company. He also serves as Chairman of ECSA Group, a 107-year-old Swiss chemical and energy distributor with a consolidated turnover of over CHF 300 million for 2018 and is a member of the executive board of science industries, the Swiss association of the pharmaceutical, biotech and chemical industry.

Xavier started his career in finance in 2005 after obtaining a bachelor’s degree in Business Administration from the University of St.Gallen (HSG). At the beginning of his professional career, he worked with EY Switzerland as an auditor for industrial clients and graduated as a Swiss Certified Public Accountant in 2009. He later worked in various finance positions and led the global finance and accounting team of a listed Korean speciality chemical producer before joining HeiQ in 2018 as Head of Controlling. He was appointed Group Chief Financial Officer in October 2019.

The Mello Soap Box

John Lee, Lord Lee of Trafford

Lord John Lee will talk about takeovers and how the retail investors often miss out !!

John Lee is an active private investor and author of ‘Yummi Yoghurt — A First Taste of Stock Market Investment’.  He is a regular columnist in The FT and a very experienced private investor.

Tatton Asset Management plc

Tatton Asset Management plc was founded by entrepreneur and current Chief Executive Officer, Paul Hogarth who had previously co-founded and developed the then largest IFA support services business in the UK, Bankhall. Paul’s vision in starting Tatton Asset Management was to create a range of services to power the UK’s leading financial advisers, facilitating expansion and enabling them to better service their clients.  Tatton Asset Management offers on-platform only discretionary fund management, regulatory, compliance and business consulting services, as well as a whole of market mortgage provision, to Directly Authorised financial advisers across the UK. This is achieved through two operating divisions: Tatton the Group’s investment management division and Paradigm, the Group’s IFA support services business.

These operating divisions provide support services, such as compliance and business advice, to help directly authorised firms respond to market and regulatory changes, as well as giving them access to discretionary fund management exclusively through fund platforms.

Paul Edwards is the Chief Financial Officer of Tatton Asset Management. He is also Group Finance Director for Paradigm Partners Ltd.

Prior to joining Paradigm, Paul has previously been Group Finance Director of a number of quoted companies, most recently on the main board of Scapa Group plc. He has also held a number of other senior finance roles in a broad range of listed and private companies.

Paul Hogarth is the Chief Executive Officer of Tatton Asset Management, as well as Senior Partner at Paradigm Partners Ltd, Chairman at Tatton Capital Group and Founder of Perspective Financial Group Limited.

Paul has over 30 years’ experience in Financial Services the majority of which being at the centre of IFA distribution. Paul was the Co-Founder of Bankhall in 1987, and built Bankhall Investment Associates from scratch to sale in May 2001 at which point 25% of the IFA sector utilised at least part of the Bankhall service proposition. After leaving Bankhall he went on to establish Paradigm Partners Ltd which launched in April 2007 and has since grown to become one of the UK’s top 5 distribution businesses.

Questions which went unanswered during the MelloMonday webinar:

Why would an IFA choose not to use TAM?

An IFA would choose not to use TAM if they believed they had the expertise and resources within their own business to provide the investment management services themselves or get better rates with providers on their own as opposed to being part of a bigger group. Typically however, IFAs do not have the expertise or resources to be able to provide as detailed and thorough service as TAM, nor do they have the scale to be able to provide the services as competitively as what TAM can.

If I were a client of an IFA, would I be aware that they use your services & how would they sell those services to me?

Yes the client would be aware of Tatton’s services, as part of the advice process that the IFA has to undertake with the end client they would have to advise them to use Tatton’s investment service and confirm to the client  as to why the Tatton service is suitable for their needs and objectives within their financial plan. Clients can have a number of different objectives with their plan, but an IFAs main role in the value chain is to identify those needs and objectives and then recommend different products and tax wrappers to meet those needs. They will then need to recommend an investment service like Tatton’s to achieve those objectives. One of the key focuses of the FCA is on total cost of investing which is where Tatton fits well being one of the lowest cost solutions in the market place.

Could you comment on the mortgage side of your business.
– How does it work?

TAM plc’s customers are all intermediaries who are directly regulated & authorised by the FCA (known as DA’s); some are specialists, e.g. dealing in Wealth Management, or Pensions, or Protection or Mortgages, and some advice across a mixture of areas.  IFA’s are typically multifunction holistic advisory firms dealing in all areas.  Paradigm Mortgages Service operates in a “club” style, creating access by its member firms to the full market of Lenders, Providers and related mortgage suppliers, eg conveyancing or technology offerings. By aggregating large volumes of its members Lending & Protection business, it secures more attractive commercial terms for them, including a margin for Paradigm mortgages.  The business acts to promote the various propositions of its Strategic Partners ie the Lender & Provider community, who pay Paradigm for structured access to its members via workshops & various promotional initiatives.  Paradigm also provides outsourced Compliance services via its Consultancy business, assisting the independent firms in understanding their regulatory obligations.
– How does it compare to Mortgage Advise Bureau?

MAB (Mortgage Advice Bureau) are a Network organisation operating principally in the Mortgage & Protection space, with historic links to various Estate Agency businesses.  Their Advisers are not Directly Regulated, unlike Paradigm member firms, but Appointed Representatives (AR’s) choosing to sit under the regulatory umbrella of MAB, in exchange for a percentage of each advisers turnover.  The Network in effect takes the Regulatory Advice risk on its shoulders, and centrally provides PI cover and central operational processes, meaning member firms and their advisers work under a restricted regulatory framework. Typically, as firms mature they move away from Networks, becoming DA firms.

– How has it been affected by covid and what’s the outlook for 2021?

For a period that coincided with TAM’s Q120 the UK Mortgage Market was in lockdown with Survey companies unable to visit and Value properties… at the same time, Lenders & Providers moved to WFH, (where today circa 85% of all bank personnel still remain) creating incredible operational pressures. Government supported Payment Holidays created turmoil within the lender community, with at peak, 1.8m customers suspending monthly mortgage payments. At the start of Q2, lockdown 1 was lifted, and Gov’ introduced the SDLT (stamp duty land tax) incentive, boosting consumer interest in house purchases. By the end of H120 Paradigm Mortgages where not just back at pre-pandemic levels, but ahead @£5bn Completions, 4.7% up on H119 volume.  The market outlook for 2021 is mixed, with various commentators speculating that UK Gross lending will fall, curtailed largely by banks concerns over unemployment & negative HPI (House price inflation).  UK Finance forecast Gross lending between £215 – £235bn, compared to estimated £240bn during 2020. Paradigm feel that these concerns are cautious but understood.  That said, intermediary services are in significant demand (taking a greater channel share of business during 2020 @circa 78%) and with lending criteria tightening advice is highly sought. Combined with a record volume of maturing fixed rate mortgages during 2021 (at £250bn vs £170bn during 2020), Mortgage intermediaries have a much larger market to work within. It is also worth noting the significant expansion of the Homemover-market, ie with many buyers (since July 2020) seeking alternative properties as a consequence of CV19 restrictions, WFH and on preferred home environments. Paradigm continues to recruit new member firm to its innovative proposition and with this growth and its view of the opportunities for intermediaries, it believes 2021 will be another solid year.

Can you please say more about the team that delivers the service, how does research work?

Our Investment Team is headed up by our Chief Investment Officer, Lothar Mentel. Lothar co-founded Tatton in 2012, and has overseen its growth to becoming a leading discretionary fund manager in the UK. Lothar has previously grown award-winning multi-manager funds and was previously Chief Investment Officer at Octopus Investments. In an investment management career spanning three decades, Lothar designed and launched the Barclays Multi-Manager fund range and held senior roles at NM Rothschild, Threadneedle and Commerzbank Asset Management.

He oversees a total of 11 investment professionals with many decades of combined industry experience. You can find more about our investment team and investment process on our website:

https://tattoninvestments.com/about-us/our-investment-approach/

https://tattoninvestments.com/about-us/our-team/

What are the risks to the business longer-term from new fintech? Or is there more of an opportunity (and if an opportunity), how? 

thanks Paul for a great presentation too.

I think there are two strands to this answer. From an IFA perspective I believe there is a place for fin-tech complimenting and making the adviser’s services more scalable however we believe there will always be a need for face to face advice whether that be remotely or in person when dealing with the typical client that an IFA and Tatton will provide services to.

From a Tatton perspective fin-tech presents an opportunity for Tatton to become more scalable and reach a wider demographic and target market than it currently does, we have an adviser portal which we are continuing to develop to help advisers become more scalable and will look at M&A should the right opportunities come about.

MelloBASH (Buy, Avoid, Sell, Hold)

The MelloBASH features a mix of Fund Managers and Private Investors including Kevin Taylor, Alan Charlton and Leon Boros.  They will be giving their verdicts together with the audience on listed companies selected by you…our Mello delegates.  Donations will be made to their chosen charities to show our appreciation of their excellent research and diligent coverage of the selected companies.   Do let us know which companies you’d like analysed in future MelloMonday BASH panels by emailing georgina@melloevents.com.

Gilbert began his City stockbroking career in 1977 as a research analyst. In 1980 he moved into UK Equity sales, selling to major UK institutions. In 1995 he transferred into Corporate Broking, being actively involved in IPOs, secondary fundraisings and general market advice to corporate clients for a further 15 years. From 2010 – 17 he worked at Equity Development, and remains an occasional contributor to them. 

Leon is a recently retired professional investor. Prior to his retirement he was founder and managing director of Equity Strategies, a boutique corporate finance firm. Leon started his career at EY where he qualified as a Chartered Accountant.

Leon has been investing since his late teens. In 1993 he opened his first PEP and has since achieved annualised returns of 18.42% (to Dec 2019).

Leon was previously a non-executive director of ShareSoc. Twitter: Leon Boros @Boros10  

I’m looking for compounding investments  

I started off in Leisure – a part of the market I still love, but an area where stocks can appear “cheap” for years without going anywhere. It made me realise that valuation is only one part of the puzzle. 

Now I sift through a much broader universe of stocks in search of small, high quality operators with large addressable markets, strong and maintainable margins, and clear share price catalysts. 

@jpbrumby

Kevin began his City career 27 years ago, training as an actuary with a focus on defined benefit pension schemes. In 1997 he moved over to Investment Banking and joined a structured finance team working on complex projects and debt finance for large corporates. During those 27 years of financial markets experience Kevin has been a keen small cap investor looking after his family’s portfolios and trading on both the long and the short side of markets. Kevin is one of the more sceptical member of our panel and likes to see proof that demonstrate management’s claims before investing in a management team.

Specialist Insights

Steve Clapham

Stephen Clapham of investment research and training consultancy Behind the Balance Sheet will be here again with another instalment of his accounting red flags and investing tips series. In accounting red flags he will talk about comparing operating cash flow to earnings, and give some tips on adjustments to ensure you are comparing like with like. In the investing tips series, he will explain why supply is often a much better indicator to use than demand when evaluating the outlook for industry pricing.

 

Behind the Balance Sheet is an investment research consultancy which creates bespoke research for large institutional investors and produces training programmes for their analysts and portfolio managers. The firm was founded in 2012 by Steve Clapham, who has 30 years of experience analysing and investing in equities. He spent some 20 years as a rated sell-side equity analyst before becoming a partner of a multi billion hedge fund in London in 2005.

Gamechangers – which company is transforming this month?

The next in our series of “Gamechangers” – An introduction to a company that has had a transformational announcement which may not have been fully understood by investors. The company will not be pre-announced beforehand but leading investors and directors talk us through the company gamechanger.