Operations
How did the idea behind the company come about?
The idea behind Peel Hunt LLP originated from the desire to create a specialised, client-focused investment banking service. Founded in 1989 by Charles Peel and Christopher Holdsworth Hunt, the firm aimed to provide high-quality, independent advice and execution services to UK mid and small-cap companies. This focus on a specific market segment was somewhat unique at the time and set Peel Hunt apart from larger, more generalised investment banks. The firm's approach centered on building strong, lasting relationships with its clients, emphasising deep sector expertise, and providing tailored financial solutions. This dedication to serving a niche market effectively has been a defining characteristic of Peel Hunt since its inception.
What's the mission of the company?
The mission of Peel Hunt LLP is focused on "guiding and nurturing people through the evolution of business".[1] This mission statement highlights their commitment to supporting and advising their clients and stakeholders as the business landscape changes and evolves.
What's the company's flagship product and what makes it unique?
Peel Hunt LLP, as an investment bank, doesn't offer a "flagship product" in the traditional sense like a tech or consumer goods company. Instead, their primary offerings are financial services, specifically tailored to the mid and small-cap sectors in the UK. What makes Peel Hunt unique is its specialized focus on these market segments, providing expert advice and services in equity research, sales, and trading, as well as corporate broking, advisory services, and investment banking. Their emphasis on in-depth sector knowledge, coupled with a strong commitment to independent, client-focused advice, differentiates them in the financial services industry. This approach allows them to cater effectively to a specific group of clients, creating strong, lasting relationships and a reputation for tailored, high-quality service.
What is the price of the main offering(s)?
The pricing of Peel Hunt LLP's services, such as equity research, sales and trading, corporate broking, advisory services, and investment banking, is not typically publicly disclosed or standardized. These services are highly specialized and tailored to each client's needs, and as such, their pricing would vary depending on the complexity of the service, the scope of the engagement, the market segment, and other specific requirements of each client. Generally, in investment banking, fees can be structured as fixed amounts, percentages of the transaction value, or a combination of both, and are often negotiated on a case-by-case basis.
From which place(s) are the offerings able to be purchased?
Peel Hunt LLP's financial services and offerings are primarily accessible from their offices in the United Kingdom. The firm operates predominantly within the UK market, focusing on serving UK mid and small-cap companies. Clients typically engage with Peel Hunt through their corporate offices for various services such as equity research, trading, corporate broking, advisory services, and investment banking. These services are usually procured through direct business-to-business interactions and are tailored to the specific needs of each client, rather than being available for purchase in a conventional retail sense.
From which place(s) are the offerings promoted?
Peel Hunt LLP promotes its offerings primarily in the United Kingdom, reflecting its focus on the UK mid and small-cap markets. The firm leverages various channels for promotion, including its corporate website, industry events, financial news media, and professional networking opportunities. Additionally, as an investment bank, a significant portion of its promotion and client engagement likely occurs through direct, relationship-driven business development efforts, targeting specific sectors and companies that align with their expertise and service offerings.
What's the current strategy of the company?
Peel Hunt LLP's current strategy, as outlined in their 2023 annual report and other sources, revolves around the following key priorities:
- Extending Leading Liquidity Provision: Peel Hunt has transformed from a market maker to a key liquidity provider, trading in over 5,000 UK securities and 9,800 overseas securities. They aim to continue this growth by adding incremental liquidity, expanding and diversifying trading counterparties, developing new digital infrastructure to live stream prices to alternative venues, and establishing new strategic partnerships with larger pan-European liquidity providers.
- Expanding Investment Banking Capabilities: Having evolved from a corporate broking business to a specialist UK investment bank, Peel Hunt is focusing on building its track record with mid-cap and growth companies. The firm is diversifying its client base to include both public companies and its Private Capital Markets business. Additionally, they're expanding services in areas like M&A and Debt Advisory, and integrating investment banking teams with Research & Distribution to deepen relationships with institutional investors.
- Advancing as a Distribution Powerhouse: Recognized for its award-winning research and experienced distribution teams, Peel Hunt is strengthening its role as a connector between investment institutions and companies. They are deepening relationships with institutional investors, expanding market share, and enhancing their international influence and access. Notably, they've invested in North American and European distribution platforms and are planning to establish a new European office in Copenhagen.
- Embedding Technology in Operations: Technology is central to Peel Hunt's business strategy. The firm is investing in and innovating digital tools and infrastructure to maintain competitive pricing and secure access to liquidity. A notable development is the spinning out of their proprietary REX platform into a standalone business, RetailBook, aimed at expanding retail participation in capital markets.
- Leveraging Unique Culture for Performance: Peel Hunt's collaborative culture is seen as a key strength, fostering team collaboration and an increased focus on performance. The firm encourages cross-functional projects and initiatives to drive strategic goals. A newly launched Investment Banking graduate program exemplifies their approach to harnessing internal talent and ideas.
These strategic priorities highlight Peel Hunt's focus on diversification, technology integration, and deepening client relationships, positioning them well for future growth despite challenging market conditions.
Who are the key members of the team and what makes them unique?
Key members of Peel Hunt LLP's team, each bringing unique experiences and expertise, include:
- Lucinda Riches - Chair: Lucinda Riches is the Independent Non-Executive Chair of Peel Hunt. She has a distinguished career in investment banking, previously serving as Global Head of Equity Capital Markets at UBS. Her experience spans various non-executive roles, including at Ashtead plc, Greencoat UK Wind plc, and LGT Capital Partners Group Holding Ltd.
- Maria Bentley - Non-Executive Director: Maria Bentley, with over 30 years of experience in financial services and investment banking, joined Peel Hunt's board in 2022. She has held senior human resources roles at Goldman Sachs, UBS Investment Bank, and Nomura International. She also serves as a non-executive director and chair of remuneration at various firms including Daiwa Capital Markets Europe Limited.
- Liz Blythe - Non-Executive Director: Liz Blythe, who joined the board in 2020, has a background in audit and finance, having served as Chief Internal Auditor at Skipton Building Society and Finance Director at Homeloan Management Limited. She also holds roles as a non-executive director at other firms including Together Personal Finance.
- Richard Brearley - Non-Executive Director: Richard Brearley, an Independent Non-Executive Director since 2020, has a strong background in compliance. He has held senior roles at Ninety One, Macquarie, and Investec plc, covering a range of markets and business areas.
- Darren Carter - Non-Executive Director: Darren Carter has been with Peel Hunt since 2004, bringing over 30 years of equity markets experience. He has held senior positions at D. E. Shaw Securities International and KBC Financial Products, and is involved with other financial firms like Praetura Ventures and Praetura Debt.
- Steven Fine - Chief Executive: Steven Fine has been with Peel Hunt since 2006 and played a pivotal role in the management buy-out from KBC Bank in 2010. He has extensive experience in equity, convertible, and derivatives operations, and is a non-executive director for the Quoted Companies Alliance.
- Sunil Dhall - Chief Financial & Operating Officer: Sunil Dhall has been with Peel Hunt since 2010 and previously held senior roles at KBC Financial Products and Credit Suisse. He is active in initiatives to improve socio-economic diversity in UK financial services and holds a degree in Engineering, Economics, and Management from Keble College, Oxford.
These individuals contribute to Peel Hunt's strategic direction and operations with their diverse experiences and specialized expertise, underscoring the firm's commitment to leadership and excellence in the financial sector.
What's the company's TAM, SAM and SOM in terms of definition and figures?
Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM) are metrics used to estimate the market potential for a business or product. However, for a company like Peel Hunt LLP, which operates in the investment banking and financial services sector, these terms are less frequently used or defined with specific figures, as their market potential is largely determined by the breadth of financial services they offer and the size of the UK mid and small-cap market segments they target.
- TAM (Total Addressable Market): The total market demand for a product or service. For Peel Hunt, this would theoretically encompass the entire UK financial services market.
- SAM (Serviceable Available Market): The segment of the TAM within a firm's reach. For Peel Hunt, this would be the UK mid and small-cap sectors that they specialize in.
- SOM (Serviceable Obtainable Market): The portion of SAM that a company can capture. This depends on Peel Hunt's market share and competitive position in the UK financial services sector.
Specific figures for Peel Hunt's TAM, SAM, and SOM would require detailed market analysis and internal data, which are typically not publicly available for such specialized service sectors.
Who are the company's main peers and how are they similar and different to each other?
Peel Hunt LLP's main peers in the investment banking and financial services sector are other firms specializing in mid and small-cap markets in the UK. These would include companies like Numis Corporation, Panmure Gordon, and Shore Capital. Similarities:
- All these firms offer similar services such as equity research, corporate broking, trading, and advisory services.
- They focus on the UK market, particularly targeting mid and small-cap companies.
Differences:
- Peel Hunt distinguishes itself through its unique client-focused approach and deep sector expertise.
- The firm's emphasis on building long-term client relationships and its specialized focus on the UK mid and small-cap sector set it apart from its peers.
- Additionally, Peel Hunt's strategic priorities, like expanding its investment banking capabilities and leveraging technology, contribute to its distinct positioning in the market.
| Feature/Company | Peel Hunt LLP | Numis Corporation | Panmure Gordon | Shore Capital |
|---|---|---|---|---|
| Equity Research | ✓ | ✓ | ✓ | ✓ |
| Corporate Broking | ✓ | ✓ | ✓ | ✓ |
| Trading Services | ✓ | ✓ | ✓ | ✓ |
| Advisory Services | ✓ | ✓ | ✓ | ✓ |
| UK Market Focus | ✓ | ✓ | ✓ | ✓ |
| Mid and Small-Cap Focus | ✓ | ✓ | ✓ | ✓ |
| Client-Focused Approach | ✓ | ✓/✗ | ✓/✗ | ✓/✗ |
| Deep Sector Expertise | ✓ | ✓/✗ | ✓/✗ | ✓/✗ |
| Investment Banking Expansion | ✓ | ✓/✗ | ✓/✗ | ✓/✗ |
| Technology Emphasis | ✓ | ✓/✗ | ✓/✗ | ✓/✗ |
✓ = Feature is present ✗ = Feature may vary or be less emphasized
This table highlights that while these firms share a core set of services and market focus, differences emerge in their approach, emphasis on expansion, and technology integration. Peel Hunt, for example, is particularly known for its client-focused approach and emphasis on technology.
Risks
Investing in Peel Hunt LLP involves several key risks:
- Financial Performance: Peel Hunt reported a significant decline in its financial performance for the full year 2023, with a net loss of UK£1.32m compared to a UK£11.0m profit in FY 2022. The revenue decreased by 38% to UK£80.0m, and there was a UK£0.011 loss per share, down from a UK£0.15 profit in FY 2022 [9].
- Market and Economic Conditions: The company faced challenges due to market turmoil driven by various economic and geopolitical events, such as the war in Ukraine, political upheaval in the UK, and the biggest US bank failure since 2008. These factors have impacted investor confidence and led to low capital markets activity and lower trading volumes [27][28][29].
- Management and Governance: Less than half of Peel Hunt's directors are independent [17], and there's a relatively inexperienced board with an average tenure of only 2.2 years [19]. Additionally, CEO Steven Fine's compensation has been a point of discussion, being above average for companies of similar size in the UK market [18].
- Business Model and Strategy: Peel Hunt's unique business model includes serving retail investors through intermediaries, which diversifies its business and reduces exposure to the capital markets cycle [26].