Panmure Gordon to close Liverpool office

Panmure Gordon is to close its Liverpool office in a reversal of a recent trend for City brokers to establish regional outposts as economic recovery spreads from London.

The office was founded in 2006 but houses research analysts rather than fee-earning corporate financiers. The five staff are being offered jobs in London but a statutory consultation ends this month.

Cenkos, the small-cap broker, opened an office in Liverpool in December and intends to offer a full service of research, and corporate broking. It is headed by Simon French, who left Panmure, and could lure others from his former employer. Other analysts have left for HSBC and Peel Hunt in the last year.

Rival Numis opened in Manchester in October. Shore Capital, the boutique investment bank, remains strongly committed to Liverpool though Charles Stanley closed its wealth management office there last year.

Panmure's move emphasises the pressure on boutique brokers despite the recent health of Aim.

Patric Johnson, head of securities, said it needed to "manage the cost base".

The Leeds office, with just two staff involved in finding deals, was unaffected, he said.

"It is the ebbs and flows of the business," Mr Johnson said. The research team in Liverpool was hired when Numis shut its office there. "If we find the right talent I would not rule out a return."

Panmure, partly owned by Qatari investment bank QInvest, announced its first dividend in eight years in March.

It reported pre-tax profits of £2.15m on the back of a 7.6 per cent increase in net revenues from commission and fee income to £29.39m for the year to December 31.

However, Philip Wale, chief executive, warned at the time that commission rates for all brokers were declining and trading volumes reducing.

Brokers now have to win mandates for initial public offerings rather than rely on listed company retainers. Under recent changes, research must be billed separately rather than "bundled" into commission fees.

Mr Johnson said Panmure would continue to provide the same breadth of research, with 24 analysts, as it could bring in business if they were motivated to sell. "We can no longer afford library analysts. Everybody has to be a marketing analyst."

It has handled several northern IPOs and is floating for Gear4Music, the online instrument retailer from York that is looking to raise £10m on AIM.

Research by Capita found that £5.2bn of capital was raised on Aim in 2014, a four-year high. The volume and value of IPOs in 2014 was the highest since 2007. There were 79 IPOs raising £2.5bn, three times more than the year before.

Professional services firm EY said a quarter of all IPOs by value in 2014 were of northern businesses, including AO World, the online consumer goods seller, and Polypipe, the Doncaster maker of plastic pipes.

Liverpool's financial sector is in good health. It is home to the biggest wealth management sector in England outside London, with companies such as Investec, Rathbones and Quilter Cheviot, bought by Old Mutual, the FTSE 100 insurer, this year, managing around £135bn.

It has also lured a number of City firms to open back office functions in recent years including Pershing, an arm of Bank of New York Mellon, with cheap office space and lower wage but skilled labour.

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