Simon Melling was enjoying a genial semi-retirement after 30 years in the investment industry, when a group of old contacts got in touch to ask him if he wanted to roll the dice one more time and join their start-up wealth management business as chief executive and shareholder.
He says it took him “five seconds” to say yes.
Melling had set his mind on semi-retirement, buffered by a number of non-executive director positions at both financial and non-financial businesses, and some work running the family investment office of Hargreaves Lansdown founder Steve Lansdown, but when the offer came in 2018, he says, he snapped it up.
The company in question is Vermeer Partners, a discretionary and advised investment management business with £1.7bn of funds under management after just more than three years in operation.
Melling was working as head of corporate finance at Ravenscroft, a stockbroking and investment management company based in Guernsey.
He was working on a possible merger and acquisition transaction with Ravenscroft, and during the course of it encountered a group of wealth managers who had worked at Cheviot, and then at Quilter Cheviot.
He says: “The M&A deal didn’t happen, but I said to the guys that had been at Quilter Cheviot that they should set up on their own, they had the experience, they had the clients, and when I said it, it really was just advice to them, it was not meant as a job request.”
Several months later the wealth managers came back to him and said they were setting up the business, but wanted him as chief executive.
The business is structured as a partnership, with around 30 of the 41 employees having an equity stake.
He says: “We made the decision very early on to structure it as a sustainable partnership and fund it ourselves, so that we didn’t have to give too much of the equity away, other than to the working partners.
"We have also brought in some previous Cheviot partners who have retired but who have important client relationships. No one owns more than 7 per cent of the firm, and the intention is that when current partners retire, they will sell their partnership equity to the next generation.
"That might mean when they sell it's not for the absolute top, top price, but they are prepared to tolerate that. We are trying to be good corporate citizens and replicate the model that accountancy firms, lawyers, and even the big investment banks had before the financial crisis."
Melling’s career to that point had involved roles as chief executive of listed stock broker business Cenkos Securities, finance director at Interactive Investor, and finance director and chief operating officer at Collins Stewart, a brokerage business that was at that time headed by subsequent Fundsmith manager Terry Smith.
He describes Smith as a “workaholic” but also as “probably the most intelligent person I have ever met”.
Melling says he believes the early, key decision made by Vermeer was to outsource most regulatory and administrative functions to Pershing, a subsidiary of BNY Mellon.