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The deal makers

The speed of Cobalt Capital’s rise has been remarkable but it still has big plans. Here, Christine Toner meets a management team on a mission

Cobalt Capital, the self-proclaimed new kid on the block, was instrumental in the formation of the London broker alliance known as Concordia.

Together with Savills Private Finance, Chase De Vere Mortgage Management, Alexander Hall and Hamptons Mortgages, the Concordia venture commands more than 10bn in lending across the residential and commercial sectors.

But Cobalt also has its own success story to shout about, with a five-year history that reveals a multitude of corporate recreations.

Cobalt was established in June 2000 trading as eu loans. The firm began with just six staff led by Julian Ingall, Andrew Drummond and Andrew Montlake, who had all previously worked at John Charcol’s Knightsbridge office.

After rebranding to Cobalt Capital in 2003 the brokerage went on to merge with London and Bristol-based Chelsea Mortgage Management in the summer of 2005, adding Richard Taylor and Chris Banks to form the current team of five partners.

Also in 2005, City-based firm Square Mile Mortgage Finance bought into the Cobalt dream team, becoming an appointed representative of the group. Then, in January 2006 Cobalt launched Cobalt Commercial, headed by Guy Hammond.

Cobalt now has almost 70 staff, with plans to add up to 20 brokers in the next six months.

But, says partner Montlake, the icing on the cake was scooping Mortgage Strategy’s mortgage strategist of the year award last April. So what’s happened since?

Not long afterwards, Cobalt opened an office in the City of London fronted by Steve Smith, who has divided his time between Square Mile Mortgage Finance and the new Cobalt office.

The next move was to bring in Steve Vanner and Gillian Slater, consultants from rival brokerage Hamptons. The office has, in Montlake’s words, been “a great success”.

And the company also recently revealed that it has in place a war chest that can be used at any time to finance the next stage of its expansion. This is thought to be worth around 5m, al-though there are rumours that it could be substantially more than that.

Julian Ingall, managing partner of Cobalt, smiles at this suggestion.

“We initially set a figure of 5m on the war chest,” he says. “But that will depend on what we are trying to do. There could be situations in which we have access to a lot more depending on the type of transaction it is. Let’s just say we are in a fortunate position at the moment.”

It is clear that the freedom to act on its own initiative is something of huge importance to the Cobalt team.

“The advantage we have is that this money has been raised by ourselves, so we can retain our independence,” says Ingall.

“This means that if we want to do something quickly we can discuss the matter internally without having to get anyone else’s agreement. If we can justify the commercial aspects of doing a deal we can move forward quickly.”

What kind of response has Cobalt had following the revelations about the existence of a war chest?

Montlake is careful not to give too much away.

“It has been strange to see the interest generated since the story broke in Mortgage Strategy,” he says. “We have been enthused and surprised by some of the people who have contacted us. I can’t go into much detail but I think 2007 will be an interesting time for some of the top business producers in London.

“What seems to be most interesting is the idea of setting up a team of elite brokers who are well established, enabling them to create their own cost centre and therefore give them freedom to control their own destiny.”

Ingall says that interest in joining Cobalt has come from outside London.

“As far as other companies are concerned we have had some discussions with firms outside London as well as within, although I would stress we are choosy about who we are looking to do business with,” he says.

“We are only looking for those we consider to be the cream of the industry. Hopefully we will be able to make some exciting announcements soon.”

For a man who claims to be averse to discussing the finer detail of Cobalt’s recruitment plans, Ingall doesn’t do too badly when discussing the golden hellos the company is prepared to offer prospective recruits.

“The packages we offer consultants are not set in stone,” he says. “We pay our top consultant a basic of 80,000 but he will earn substantially more with our commission package.

“Also, if we want to offer a 50,000 signing on bonus we are able to do so to negate the loss of any bonus people may be expecting from their current employers. Of course, these would have to be the right individuals as we are only looking for experienced top level consultants.”

But with 2006 being such a successful year for Cobalt there is already a strong sense of “if it ain’t broke, don’t fix it” starting to emerge.

“There is nothing new in the way we will approach 2007,” says Ingall. “Underlying our growth strategy has always been a consistent level of business. This is what we concentrated on in the early years – developing our client bank and existing relationships. In anything we do in the future, this will always come first.”

Accordingly, Cobalt’s introducer relationships, which are looked after by Chris Bevan, another ex-Charcol employee, are the key to the way the brokerage does business.

Taylor says the development of Cobalt’s introducer base is integral to the company’s growth objectives.

“Our introducer offering is streets ahead of other brokers who operate in this area,” he says. “There are many brokers who say they look after estate agents well, but the reality can be different. We have always taken the time to understand the different things introducers look for in a relationship.

“We are careful not to take on any introducers who do not fit with our corporate image.”

Given today’s competitive climate, the importance of good public relations cannot be ignored – something Cobalt is acutely aware of.

“The PR arena is something we have only embraced in the past 18 months,” says Montlake. “It was important that we made the backbone of Cobalt strong and we have been careful not to release items that we can’t back up with hard facts, such as appropriate business figures.”

It would seem that this attitude is paying off for the company, with some of the biggest players in the industry praising Cobalt’s efforts.

Nigel Stockton, managing director of HBOS Intermediaries, says that across the five HBOS mortgage brands, 2006 completions for Cobalt were up by well over 50% compared with the previous year.

“This impressive growth has been delivered by excellent management and an encyclopaedic knowledge of the London market,” says Stockton. “Cobalt has established itself as a top brand in the competitive London mortgage market.”

Similarly, Michael Bolton, chief executive officer of edeus, is quick to give praise.

“Cobalt has grown quickly since its merger with Chelsea Mortgage Management and has not only developed a successful and recognisable brand but also delivered consistently growing business levels,” he says.

“Although the business is based on traditional principles it has adapted to today’s market to become a modern, forward-thinking company.”

Paul Howard, director of intermediary sales for Portman, is another advocate of the Cobalt strategy and agrees that the speed with which it has become a well known name in the industry is remarkable.

“It’s obvious the people at Cobalt don’t just let things happen – they plan for them to happen,” he says.

“It is evident that they are strategic thinkers and they continue to demonstrate this as they unveil each fresh initiative. There will be winners and losers during the year but Cobalt will definitely be bringing home the silver.”

You can’t buy publicity like that. But Ingall is adamant Cobalt will not rest on its laurels.

“We are proud of what we have achieved in the relatively short time since our merger with Chelsea Mortgage Management,” he says. “We have some way to go but we believe we have the best management team and structure in the industry which will allow us to go on to the next level,” he says.

“But we don’t envisage growing forever as we have seen how difficult it is to keep a successful company together once you pass a certain size. Our main driver is quality of consultants rather than size for its own sake.”

What that size will be only time will tell but one thing is for sure. If industry opinion is anything to go by, the next mortgage strategists of the year have something to live up to.

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