Articles on Patersons History:
New century, new nation, new business
A well known identity in the Perth business community, James Paterson was renowned for his even temper and likeable manner and developed a valuable client base - in particular, pastoralists - through his accountancy practice. This proved particularly valuable when the stockbroking arm of the business began operating in 1922, as the Stock Exchange of Perth was fiercely opposed to marketing activities of any nature by stockbrokers right up until the 1970s.
Baptism by fire
In 1929 James was joined in the firm by the youngest of his four children, Colin, whose first job was balancing the postage. Though a tough entry to the industry with the effects of the Great Depression evident in all aspects of life, Colin worked hard and was a qualified accountant before he was 21.
The war years
By the beginning of the Second World War, Colin was sole partner of the firm. He enlisted with the RAAF in 1940, flying original Wellington Bombers out of the UK and becoming a member of the Goldfish Club as one of the select few to survive a ditching into the English Channel. During his absence, the business – by this time called James W Paterson & Son – was run by Colin’s sister Mary Paterson, who kept the doors open throughout the war years. Their father James died shortly before the end of the war, and Mary withdrew from the business immediately upon Colin’s return from service.
Dedicated stockbroker
The hardships faced during the war years were replaced with much excitement in the post war period, as industry boomed and businesses began to expand. By the 1950s the accountancy profession demanded that the firm split the joint functions of stockbroking and accounting, and so from this point forward the Paterson business was one of a dedicated stockbroker.
However the experience Colin had gained from his accounting background proved invaluable in moving the firm forward, as he began to focus on corporate finance in Perth, an area he believed was greatly underserviced. He was known to spend much time walking factory floors, gaining insight into many of the companies that were to become the public floats of the 1950s and 60s. It was also around this time that Colin resolved to add to his senior staff only people with tertiary, academic or accounting qualifications.
Throughout the 1950s the Paterson business undertook a number of underwritings, using somewhat rudimentary processes in the developing area of corporate underwriting. The firm would act as broker and underwriter to new issues, with Colin finding the company, working with the accountants and solicitors to draw up a prospectus and then offering the stock around Perth for support. At this time the idea of sub-underwriting was unheard of, and the firm would take on the full commitment of the stock and the substantial risk that came with it.
A new breed
It was during the 1960s that Colin took on three highly qualified young men as partners in the firm – Bernard Wright, Terry Hogan and Ron Punch – each of whom would go on to serve prominent terms as Chairman of the Stock Exchange of Perth, and would contribute greatly to the evolution of the industry throughout the 70s and 80s. Colin retired from the firm in 1977, leaving behind a solid legacy and a reputation built on his old-world professionalism and inherent sense of propriety.
The late part of the 1970s saw the business corporatise from a partnership to a company, to become Patersons Securities Limited. In 1985, a 50% interest in the firm was sold to Ord Minnett - a partnership founded partly on the friendship of Colin Paterson and Charles Ord, as well as the close association Ord had with money market companies for which Colin acted as Perth agent. The relationship with Ord Minnett gave the Patersons business - now known as Paterson Ord Minnett - national contacts, as well as access to both domestic and international resources and research.
The heady 80s
It was during this lively decade that the firm employed another three young businessmen who would go on to shape the future of the firm, in the form of Michael Manford, Aaron Constantine and Murray McGill. Michael joined the firm in 1979 as an Operator on the trading floor, and worked his way up to become Managing Director in 1991 and Executive Chairman in 1994. Aaron moved to Patersons in 1985 and was appointed Executive Director in 1990. He spent time as a Private Client Adviser and Research Analyst before taking over the Corporate Finance business in late 1999. Murray, who joined Patersons in 1988 and became an Executive Director in 1992, hails from a farming background and honed his skills as a Private Client Adviser before moving into the asset management arm of the business. All three remain Executive Directors and major shareholders in the firm today.
Moving with the times
With a solid management structure in place as well as systems and technology continually improving with best market practice, the 90s saw the firm expand to become a full service stockbroker, taking on institutional dealing capabilities as well as adding complementary investment services such as financial planning and portfolio administration. The retail, corporate finance and private asset management divisions grew strongly during this time and three regional WA offices were established in Busselton, Bunbury and Albany.
Strength and growth
The new century brought with it new challenges, for both the firm and the stockbroking industry as a whole. The highs of the dot-com boom were followed by a relatively mild but lengthy market downturn when the bubble burst.
Paterson Ord Minnett remained strong, and embarked upon a strategic expansion program that saw it open offices in Melbourne in 2002 and Sydney in 2003. At the end of that year changes meant that ownership of the firm came full circle, as the Paterson business cut ties with Ord Minnett (itself owned by JPMorgan), buying back the half share and changing its name back to Patersons Securities Limited.
Doors opened to a Canberra office in 2004 and a small Brisbane office was established in early 2008, the firm seeing opportunities in the Queensland resources sector.
2008 bought hard times and new opportunities with the Global Financial Crisis. Early 2009 saw Patersons acquire Perth-based stockbroking business Montagu and national stockbroker Tolhurst. Patersons doubled in size creating one of Australia's largest and strongest full service stockbroker with over 500 staff including 300 Advisers. Offices opened in Adelaide (SA), Geraldton (WA), Mount Waverley (Vic), Gold Coast, Cairns, Gladstone and Sunshine Coast (Qld) totaling 18 nationally. Towards the end of 2009 Patersons launched a fixed income and hybrid securities joint venture in Sydney.
In 2010 Patersons opened an East Perth office together with major expansions of the firms presence in WA.
Looking ahead
Patersons Securities has remained remarkably stable through its century of operations, with just five senior management figures throughout its history. This continuity and stability is rare in such a dynamic and volatile industry, and has laid strong foundations for the culture and growth of the firm. The integrity and values instilled by its founding members remain an integral part of the Patersons business today. It is envisaged that in the coming years, younger but equally committed employees will inevitably assume leadership positions within the firm, and continue its growth journey in the interests of all stakeholders.
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