Terry Smith, one of the City's most outspoken and successful figures, has drawn up ambitious plans to launch a fund management company, seeking cash from private and professional investors. The venture will be called Fundsmith, suggesting Smith will use his personal profile to promote the firm and attract big-name fund managers and analysts.
Smith declined to reveal details but his spokeswoman said Fundsmith would launch "within a few months". He is currently awaiting approval from the Financial Services Authority, the City regulator.
Smith, 57, is chief executive of money broker Tullett Prebon and deputy chairman of stockbroking and advisory firm Collins Stewart. Neither of those quoted companies will be involved with Fundsmith, which will be backed by Smith in a personal capacity; "This is Terry's baby," said one source. However, Keith Hamill, chairman of Tullett, is also involved in the new venture.
Smith will step down from his non-executive post at Collins Stewart, as announced, but is committed to his day-to-day role at Tullett.
Smith referred obliquely to his idea in a recent interview in Management Today, saying: "If I did anything, it would be to form my own fund manager." The plans are far more advanced than that comment suggested: Fundsmith was incorporated in April of this year.
Smith's move into fund management will open another chapter in his varied 35-year City career. He was the top-rated bank analyst in the late 1980s, famously issuing "sell" advice on Barclays when working for BZW, Barclays' own investment bank. He was fired as head of research at UBS in 1992 after the publication of Accounting for Growth, a best-selling book that exposed dubious but legal accounting practices used by some of the UK's biggest companies – including some clients of UBS.
As chief executive of Collins Stewart, he led a buyout, a flotation, the acquisition of Tullett Liberty and Prebon, and then a demerger. Tullett Prebon is now the world's second-largest interdealer broker.
Smith's outspoken style is a hallmark. On his Straight Talking blog, he writes: "I believe that one of the reasons we have got into the difficult and dangerous situation which afflicts our economy and society is that too many people followed the herd. There was too little high-quality independent analysis, and we have been, and still are, dominated by 'spin' rather than reality."