Brian Weber: 'boring is good now'

Amidst the largest destruction of private wealth the country has ever seen, it comes as something of a surprise that a Dublin wealth investment manager is planning to expand its business.

But Brian Weber (47), head of the Dublin branch of Quilter, the private clients markets investment adviser owned by Morgan Stanley and Citi's Smith Barney, is hiring in Ireland because it sees the prospects for a strong recovery here.

Weber, who worked in the past at both Goodbody and Davy, set up Quilter in Dublin five years ago.

He said that Quilter escaped the worst of the bust by avoiding the so-called leveraged stockmarket products such as contracts for difference and leveraged property investments.

"A lot of people went off to be wealth managers," he said. "We stayed in that niche of being investment managers for private clients. We made a conscious decision not to make use of leveraged products."

Weber started his investment career in 1988 at Allied Irish Securities, which became Goodbody Stockbrokers when AIB bought the broker. He helped set up Goodbody in Cork and stayed in the city until 1995, when, head hunted by Davy, he continued to focus on private client stockbroking in Dublin for the next eight years.

In the late 1990s, long before the property boom and bust, he said, the two "big levers" of growth in his industry were starting to engage: self-administered pensions and the growth generated by the cuts in capital gains tax.

Even after the bursting of the bubble, clients still need to save and plan their pensions.

A single investment manager can only personally manage between 120 and 150 clients, each investing from €200,000 up to "very big" amounts. Building the business therefore means hiring more investment managers. Charging clients an all-encompassing fee, not transactional stockmarket
costs, has worked well for Quilter, Weber said.

One way of measuring the destruction of wealth in Ireland is to look at the billions of euro written off by the banks. But his industry, he maintained, is a leading indicator and confidence has, he said, returned since late last year, spurring Morgan Stanley to invest more in the Irish business.

Quilter remains comfortable with investments in emerging market funds. After a "dash to trash" last March, investors appear, Weber said, to be returning to "the quality, the high-yielders, the safe havens, the companies that pay the secure dividends". The trend will hold a bit longer.

"I know it sounds a really boring story. But boring is good now: good-quality equities, safe dividends, sustainable dividends. Companies pay dividends out of cash flow and that [cash flow] is a sign of strength in its own right. If you stick to your quality you will do quite well."

Quilter is also "comfortable" with stocks in the oil and pharmaceutical sectors.

On the causes of the Irish property bust, Weber said that Quilter did not have an expertise on Irish commercial property and did not get involved in property investments here in the first place.

"It was the leveraged story that caused most of the damage in the downturn. It was being over concentrated in an asset class with too much leverage. That has inevitable consequences in every cycle," he said. Property remains a big enough market for the existing players. "People have learned a lot about risk in the last two years. It is hard to believe that leveraged products will surface in any scale," he said.

On the wider economy, he sees the lesser-spotted traits of Irish society, such as social mobility, as driving the recovery.

Growing a wealth management business may be another sign of economic recovery.