On with the show: Mercury AM
Mercury had great people and a great process. When Merrill Lynch paid £3 billion for Mercury in 1997, the former City Cinderella dominated asset management. But within a few years the name had gone, and so had many of Mercury's star managers. Angela Henshall analyses how the Mercury ethos has been exported to all segments of the industry, and why Mercury's acolytes are still calling all the shots.
This article appears courtesy of Global Investor.
The ethos at Mercury began as the ethos of Warburgs, recollects Leonard Licht, founding director of Mercury AM. "This was to work hard, be more aware of what was going on in the market than everyone else, and wherever possible not to be part of the establishment." It's an ethos that has stood ex-Mercury managers in good stead. Ironically, "Old Warburg himself hated investment management. He didn't understand it and didn't want to know anything about it, and yet we were all trained with the Warburg mentality."
The discipline taught under Warburg's roof has imbued Mercury managers with an extraordinary knack for making money. Perhaps it was not so surprising then that when the three-year lock-in period following the Merrill Lynch deal expired, many of the most talented managers promptly quit MLIM to form their own businesses.
The fact that they have subsequently proved so successful has a lot to do with the environment created at Mercury, says Licht. "In some ways those with an artistic bent were just allowed to get on with managing because the old professionals didn't know what they were doing.