James Paterson, the country head of CLSA in Australia, rejects the notion that the industry has too many stock brokers.
“There is over broked and well broked,” says the 18-year CLSA veteran who has worked in Hong Kong, the Philippines and South Korea. “Australia is over analysed but under researched.”
Sent by the Hong Kong head office in 2009 to sort out a Sydney office with teething problems eight months after it opened, the bull necked, broad shouldered, blunt speaking Paterson has done that.
He has got the office, if not in the black, at least to break even in 2012. Its market share is just over 1 per cent of all trades on the ASX but Paterson claims between 3 per cent and 4 per cent of institutional business. He wants to double that in three years and become one of Australia’s top six institutional brokers.
Paterson was born in London and his family moved to Perth when he was four years old. He went to the city’s tony Scotch College where he played rugby union and then studied commerce at the University of Western Australia. After five years as an auditor and consultant at Arthur Anderson in Perth including a one-year stint in outer Mongolia, Patterson joined CLSA in 1995.
CLSA now has 25 analysts in Australia, up from six when Paterson took over the Sydney office. That is not far behind the 30 to 40 analysts at CLSA’s competitors such as Citigroup, UBS and Macquarie Group.
CLSA covers 20 sectors of the Australian market, with 10 sales staff who want to ensure the firm’s relationships with AMP, Colonial First State, Perpetual and BT are on par with CLSA’s longstanding ties with Capital Group, Fidelity, Henderson and Templeton.
On the trading side, CLSA has been careful not to over spend on technology which Patterson says can quickly change and blow out costs. CLSA does not do business with high frequency traders and has no proprietary desk.
Gary Coull and Jim Walker, both now deceased, started the Asian focused brokerage in 1988. CLSA has made a name for itself as being outspoken in challenging company management and convention. Its annual conference on Asian markets in Hong Kong has hosted Sarah Palin, Mike Tyson, David Beckham and Duran Duran, the latter as a music act who have performed twice for an audience that has matched them in age.
“We try and break out of silo thinking,” says Paterson. “The influence of Gary and Jim is such that CLSA believes research should be both rigorous and digestible, hence some of our research reports have cartoon covers.”
In July, CITIC Securities, the Hong Kong listed Chinese investment bank and broker, took control of CLSA. Paterson insists the change of ownership will have little effect on the independence of the firm.
“The DNA of CLSA is very strong,” he says. “A lot of people revel in a different model that is smaller and more nimble.”