People: Neil Paviour-Smith
Tuesday, March 26th 2002, 6:32AM
When Forsyth Barr managing director Neil Paviour-Smith left university he made himself a promise. Instead of joining his mates on their OE, Paviour-Smith decided to focus on his career so that one day he’d be successful enough to take an annual overseas holiday.
More than 10 years later he’s keeping that promise. This winter the former sharemarket analyst is off to San Diego with his wife and two kids. Last year it was Thailand and Singapore, and next year "who knows it might be Paris."
Paviour-Smith, who took the top job at Forsyth Barr a year ago, became fascinated with the financial services industry at an early age and began playing the share market while still at school. His holiday job was working in the settlements department of funds manager AMP, where he had a ringside seat to watch the fallout from the 1987 share market crash.
"Every organisation back then, from brokers to funds mangers, was suffering from a shambles in their back offices, and AMP was no different," Paviour-Smith says.
"It taught me the value of running a tidy shop."
The ensuing run of listed company receiverships also taught him the danger in paying too much for assets, and that good, solid companies can endure.
These are lessons he took into his first analyst’s job with Westpac Investment Management, where he rose to become head of New Zealand equities research and strategy.
One analyst, who is a contemporary of Paviour-Smith’s, describes him as a "sharp operator" who was well respected as an analyst.
After two years with National Mutual, now AXA, Paviour-Smith bought into Forsyth Barr in June 1988 and became the firm’s director of research. His interest in the company was first aroused during weekly squash games with its former managing director Andrew McDouall.
At the time the Dunedin-based broking house was much smaller than it is today and, although the franchise was strong, it needed considerable work, Paviour-Smith says.
The move satisfied his desire for more control over his career and, as things panned out, provided an outlet for his ambitions.
"At National Mutual I was living with the fundamental uncertainty that my employer might come in tomorrow and say ‘we’re going to do this out of Sydney’. As a shareholder and director you are involved in setting the strategies - rather than just finding out about them in an internal memo."
After 18 months in research Paviour-Smith took over the top job when McDouall stepped aside.
During his tenure the firm has been in aggressive expansion mode, buying Cavill White and Frater Williams to become the largest private client broking house. It’s also expanded its portfolio and funds management services, its corporate advisory and research operations, and its investment banking business.
Paviour Smith sees no need to pause for breath saying there’s more announcements in the pipeline. He describes the last year as the most satisfying in his career because he’s "had the chance to set the agenda and the pace".
But it’s been a sharp learning curve and he admits to making mistakes along the way, on a personal and professional level. But analysts tend to grow thick hides, he says, because their investment mistakes are often very public.
"You need to remind yourself that everyone makes mistakes. You learn from them, then put them behind you."
Paviour-Smith has been a great defender of the New Zealand sharemarket but says this is cool-headed business logic rather than patriotism.
The NZSE40 capital index is a poor benchmark for a high dividend market like New Zealand’s, where smaller companies tend to outperform bigger ones, he says. The Gross index, and the Gross and Capital small company indices all show that the Kiwi market is performing well.
Our investment scene also doesn’t deserve the "Wild West" label sometimes slapped on it as dodgy behaviour is no more common here than overseas.
It’s up to the Stock Exchange and investment industry to educate the public on these issues, he says.
"So when the next respect index comes out we aren’t down there with the prostitutes and used car salesmen."
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