MARY Campbell, who co-founded corporate finance house British Linen Advisers three years ago, is branching out on her own with the launch of smaller corporate finance boutique based in Edinburgh’s Rutland Square.
Mary Campbell’s new business, called Blas — which is the Gaelic word for “sensation”, “experience”, “relish” or even “an experience shared” — received permission to operate from the Financial Services Authority last Monday.
Mary Campbell, 43, a Gaelic speaker from Barra, implies that “blas” is exactly what she wants to ensure the spin-out’s clients will get — a good sensation.
“We aim to be service-driven, completely independent, without conflicts and staffed by really experienced people,” said Campbell.
She expects the start-up will employ 12 to 20 people within four years and said headhunters are already trawling for potential recruits. They are looking beyond the bounds of the traditional corporate finance sector, she said.
“We’ll obviously look at people who are working in corporate finance, but we’ll also be looking at people with experience at consultancies such as Bain & Co and McKinsey. We intend to focus on advising on strategy as well as just the financial side of transactions.”
At least one member of staff of British Linen Advisers, based in Edinburgh’s Melville Street, is thought to be planning to decamp with Campbell to Blas, which will be situated next door to the offices of Intelli Corporate Finance. However Campbell said she is not yet in a position to provide the person’s name.
Campbell intends to focus on smaller company deals including raising money for start-ups and buyouts worth up to £300 million —this compares to British Linen’s average deal size of £150m to £400m — and, where appropriate, to personally run transactions herself.
“It’s the right point in the cycle to be starting a business like this,” she said. She implied this is partly because many large corporate finance firms, as well as the “big four” accountancy firms, have become mired in Andersen-esque scandals or conflicts of interest that emerged after the bursting of dotcom bubble and collapse of the bull market.
Mary Campbell therefore sees plenty of scope for another corporate finance boutique which, like British Linen Advisers, is not a tied house. She stressed her new organisation will have no tied relationships with larger players such as law or accountancy firms.
Said Campbell: “I have been involved with a lot of start-ups but I have never done my own. I see it as an interesting challenge both personally and professionally.”
The desire to go it alone runs in the family. Her husband, John Campbell, is a private client solicitor who branched out alone after a career at Dundas & Wilson and Murray Beith & Murray.
She said: “I thoroughly enjoyed the buyout, as a principal, of British Linen Advisers.”
The company bought itself out of Bank of Scotland in 1999-2000 partly because the BoS chief executive Peter Burt believed it was wrong to “shackle a greyhound to a carthorse”.
Mary Campbell believes having lived through her own management buyout gives her a better insight into clients’ needs — even their “sensations”.
The corporate finance team at British Linen had earlier been finding that being owned by a giant like BoS could be a disadvantage. For example, it caused potential clients to wonder about the independence of the advice they might get.
At British Linen Advisors, Mary Campbell worked on deals including the £8m buyout of Cleveland Bridge from Kvaerner, and a £32m rights issue to fund the construction of a UK manufacturing plant for PPL Therapeutics.
The start-up costs for Blas have not been massive. Campbell said: “It’s a few hundred thousand. There has been no need to seek external capital.” British Linen is not taking a stake in the new venture which is being positioned as a “spin-out”.
But Mary Campbell disputed suggestions that her business’s new name is an attempt to “pass off” the initials of British Linen Advisers. Some staff at British Linen have reportedly been unhappy that Blas’s name bears a striking resemblance to the first three letters of their firm.
Norman Murray, chairman of British Linen, said: “We use British Linen Advisers rather than BLA, so it’s not going to cause any problems as far as we’re concerned. I genuinely wish her well and there might well be opportunities to work together.”
Mary Campbell, for her part, denies any desire to “pass off”. She explains that one reason for choosing the name Blas was because she did not want to personalise the business by giving it the Campbell moniker. She said: “Blas works — it means experience shared, it’s easy to spell, and it’s also quite memorable.”
In August, Murray seemed irritated by a story in The Herald headlined “Campbell quits British Linen”. He said: “It was a bit premature as it came out before Mary got her FSA approval. I am sorry to see her go.
“She told us in May that she wanted to run her own stream of business, and we were supportive of that and helped her to get FSA approval. She told us that she wanted to do something a bit different from what we’re doing — by focusing on earlier stage companies with a technology bias and often with a Scottish flavour.
“She’d be running her own business as well, which is something she’s always aspired to. Also she likes mentoring and sitting on boards. British Linen Advisers [which has a sizeable London office in Old Jewry] is much more UK based.”
In addition to getting official blessing from the regulators, Campbell had to renegotiate certain “non-compete agreements” that existed between British Linen Advisers and both British Linen Bank and the Bank of Scotland.
She explained: “We had to obtain permission from HBOS to set these aside.” She was advised by law firm Shepherd and Wedderburn, with Dickson Minto advising British Linen Advisers.
Mary Campbell adds that, unlike certain prominent Scottish corporate financiers, she will never serve as adviser to companies on whose boards she sits.
She currently has three non-executive directorships — Dunfermline Building Society (whose board she joined at the same time as Standard Life former managing director Scott Bell), Highlands & Islands Enterprise and the Institute of Chartered Accountants of Scotland (where she is a council member).
She said, however, that Blas has no intention of competing on price with other corporate finance firms — where competitors could include Noble & Co, British Linen, Intelli and the large accountancy firms.
“Our charge-out rate will be on a par with that of the peer group. And we’ll be using the Lehman scale, which means 5% for the first £1m [of deal value], 4% for the next and 1% for anything over £5m.”
She does not believe the hours are going to be any longer than those she has been putting in at British Linen. “Everyone involved in corporate finance works long hours,” said Mary Campbell, who juggles her job with four children aged eight to 18.
Sir Iain Noble, the sage of Scottish finance who has founded two investment banks and worked with Mary Campbell at Noble & Co, said: “I like her very direct approach to things. I think she is a very determined and resourceful person who people enjoy working with.”
Noble sees plenty of room in the market for another corporate finance boutique. “There’s always room for another player,” he said.
Mary Campbell mini profile
Mary Campbell qualified as a chartered accountant with Ernst & Whinney in 1983. She joined Noble & Co in 1986, where she worked closely with Tim Noble and Jane Karwoski. During her time there, the business grew from five to 70 staff. She joined British Linen Bank in 1997 and bought out its advisory arm from the Bank of Scotland in 2000. She is a non-executive director of Dunfermline Building Society.
Copyright 2002 SMG Sunday Newspapers Ltd.
This article was published in the Sunday Herald on 8 December 2002