Leeuwin takes founders full circle

Aaron Constantine has seen a business cycle or three during his four decades’ involvement in capital markets.

But perhaps the most intriguing thing about his career is how he managed to land nearly full circle at a boutique Perth-based financial services firm after serving his entire prior work history at a company that grew nationally and then became part of a global entity.

Mr Constantine has been coaxed out of retirement by Jane Tandy to join her and three others – Jason Featherby, Aaron Young and Michael Brindal – in starting a new equities-focused financial planning, wealth management and corporate advisory business called Leeuwin Wealth.

In terms of size, with 14 people and more than $500 million in funds under management, the new firm is not light years away from the scale of the brokerage formerly known as Patersons, when Mr Constantine started his career there in 1985.

The new venture is, however, very different from what Patersons had become when he left last year in March. By then, after something of a rollercoaster couple of decades, it was part of Canadian giant Canaccord Genuity, with 130 staff in Western Australia.

Mr Constantine refers to a “confluence” of factors that prompted him to rethink retirement after less than a year and become a founder of a new firm, albeit one that starts life with the scale of a mid-tier player in the local funds management and investment advice scene.

One of the state’s most prolific dealmakers over the past few decades, Mr Constantine said he stepped away from his career of four decades last year after a hectic period of deals followed by a more challenging period in the market.

“[It was the] perfect time to basically retire from global investment banking,” he said.

“So I did.

“I had a great time, got to know my cows on the farm a lot better … and then just started getting all these phone calls.”

Unsurprisingly, a lot of those calling him were from contacts in the industry seeking advice on deals.

But one was from his former colleague Ms Tandy, who had shared a fair swag of his Patersons’ journey, spending 17 years with the firm and then three with Canaccord Genuity as chief operating officer, before taking time out in 2023 to spend time with her children.

“Jane’s a little bit modest,” Mr Constantine told Business News.

“She was out of the industry, enjoying life. I was retired, that was fantastic. But lots of people we knew asked about stuff, ‘Could we do this?’, or ‘Would you help with this or that?’

“And the key to it was having someone with ops skills, you could plug it all in and make it work.

“Now, lots of people talk to me about doing things and yeah, we can do deals.

“If you haven’t got ops in this new world, you’re finished, or you don’t even get started.”

Ms Tandy heads the new firm as managing director, assisted by Liam Stocklinger as chief operating officer.

During her year away from the sector, Ms Tandy told Business News, she noticed a gap for a boutique local player due to several trends affecting the industry.

“There’s been a lot happening in our space, in financial services,” she said.

“You had the exiting of advisers from the industry with the FASEA (Financial Adviser Standards and Ethics Authority) standards, so we’ve seen a quite significant decline in adviser numbers.

“We had a lot of consolidations of, typically, WA firms in a very short amount of time, with three of the larger WA firms being absorbed into other businesses.

“And then you’ve got growing population.”

Ms Tandy said the mining sector’s corporate activity in WA had created a different market for investors who were more equities focused than elsewhere.

“They tend to prefer direct equities,” she said.

This was a direct result of more than 40 per cent of ASX-listed companies being based in WA, which meant local people were more likely to be exposed to the stock market and more inclined to invest directly in equities.

Another factor Ms Tandy raised in Leeuwin’s launch was the opportunity to service investors who did not have the asset base required to meet the rising minimum investment level at many of the big private wealth managers.

She said entering the market using the latest platforms to operate the business meant it could do so at a lower cost and, therefore, have a lower threshold when it came to how much investors would have to invest.

“Retail investors, or for those that have less to put in as an initial investment, are often not being provided with advice because the cost of providing advice for retail clients is seen by some firms as too high,” Ms Tandy said.

“We thought our unique position is because we’re starting from scratch and we don’t have legacy systems, people, processes, client bases and data in place.

“We can build everything quite efficiently to be able to offer advice for a broad range of people.”

Clearly, this proposition resonated with Messrs Brindal and Young, both former colleagues of Ms Tandy.

Mr Brindal, with 25 years at Patersons and Canaccord Genuity, and Mr Young, with more than a decade at the latter, bring experience in wealth management.

In fact, the only founder and shareholder without the Patersons/ Canaccord Genuity background is financial adviser Jason Featherby, who came to the group with 20 years’ experience at Subiaco-based outfit Knight, as well as bringing $500 million in funds under management to the business to launch it as a mid-tier player in the space it is operating.

Ms Tandy is clear the equities focus is significant, and the firm is a fund manager as much as it sits within the financial planning and broking sector.

If its $500 million in funds under management is compared to the equities and private equities focused local players in that sector, excluding property funds, superannuation funds and those mainly investing in funds, then Leeuwin sits comfortably as major mid-tier player.

Ms Tandy said the firm’s goal was to double funds under management during this year.

Consolidation

In terms of WA stockbrokers and financial advisers, Leeuwin is a minor player at this stage, sitting outside the top 10. Its total head count, at 14, is fewer than that of the 10th biggest player, Capital Partners Private Wealth Advisers, which has 15 specialist client advisers.

The change in the market highlighted by the Leeuwin founders is visible when the sector’s Data & Insights lists are compared 10 years apart.

In 2015, the top four players by number of client advisers were all WA firms, led by Patersons, then Hartleys, Euroz, DJ Carmichael and CPS Securities. The other WA firm in the top 10 was Argonaut, rounding out the list.

A decade later, at the end of 2024, WA-based Euroz Hartleys sits at number one, following the merger of those previous local rivals to form the current entity.

While it has the same number of client advisers as Canaccord Genuity, Euroz Hartleys has more staff here, pushing it to the top of the ranking as a secondary measure.

Shaw and Partners has jumped to number three, having absorbed DJ Carmichael in 2019.

The top 10 has also been shaped by the emergence of financial advisers into the top local ranks, with national player Shadforth Financial Group represented, as is WA-based HPH Solutions and Capital Partners Private Wealth Advisers.

It also worth noting that CPS Capital was formed from the merger of Indian Ocean Capital and CPS Securities.

However, a further clarification around Patersons is required.

While Patersons could claim origins going back to 1903, its early iteration was as an accounting firm, whereas its capital markets background started in the 1950s. 

It was only incorporated as Paterson Securities in the late 1970s. In 1985, it became half owned by Ord Minnett, an east coast branch of what was then JP Morgan Chase.

It initially concentrated on expanding in WA, especially out to rural areas as was for some time double the size of competitors here. It also grew on the eastern seaboard to become a national player.