Brian Winterflood: the very best of the City’s godfathers

Some five years ago the City buzzed with speculation that a group of senior figures were attempting to buy the Alternative Investment Market from the London Stock Exchange, which was then going through its tortuous merger with Deutsche Borse. 

The logic behind the approach was that if the two giant exchanges were to combine, they would be creating such a powerful international capital markets force that the UK’s smaller companies growth market would become an irrelevance. 

This was in early 2018. AIM was performing poorly. Some of the market’s early founders, Nomads and other advisers had been watching askance, believing the growth market could do with a dose of steroids to get the juices going again. 

The minute the rumours surfaced I phoned Brian Winterflood. If anyone would know – or had heard on the City grapevine what was going on – it would be him. Not only was Winterflood the godfather to thousands of the UK’s smaller companies but he had founded the original alternative market. 

Never mind that he had retired a year before – or that he was  81. You knew that Winterflood still kept his ear to the ground. Sure enough not only had he heard the rumours, but as I suspected, was involved in those early talks. Soon afterwards, the LSE and Deutsche Borse merger fell through, and the rest is history. 

Saying any more about Winterflood’s involvement would be telling tales but he was centre stage. That he was involved in attempting a buyout was typical of him: for over fifty decades Winterflood had worked tirelessly to create markets in which smaller companies could raise new capital but critically to improve liquidity in their shares.  

That was also the last time I spoke to Brian, who sadly died on June 29th, aged 86. Close friends say he never took his eye off AIM, and was ready to pounce again should the occasion arise. We first met in the early 1980s when he was known as Mr USM, having established the Unlisted Securities Market in 1980 – starting with just ten companies. 

In old-fashioned City parlance, he was a jobber; the slang name for a market-maker, someone who holds shares on their own books and creates market liquidity by buying and selling securities. Jobbing is an essential role in any stock market – as market making matches the buy and sell orders from investors through their brokers, who were not then allowed to make markets. 

Almost single-handedly Winterflood was able to persuade the more established City figures that creating markets for dynamic young companies to bloom was vital for the growth of the country. It wasn’t an easy task: as Winterflood himself often joked, he was from the wrong side of the tracks and had to beat down the authorities to listen to him. He may have seen himself as an outsider to start with but his sheer determination, and cheerful bonhomie charm, meant he was eventually able to persuade the authorities that he had a point. 

And so he did. By 1987, there were 500 companies listed on the USM. But for some extraordinary reason, the London Stock Exchange decided to close the market, viewed by many as the troublesome and unregulated junior to the main market. That was 1995. Winterflood, as you can imagine, was livid and challenged the exchange’s decision.

Together with a small group of other small company market-makers and brokers including Derek Riches of Smith New Court and Andrew Beeson of Beeson Gregory, he presented an alternative vision to the LSE: complete with the name of the Alternative Investment Market. This little group of rebels was known as Cisco – the City Group for Smaller Companies – and eventually became the Quoted Companies Alliance. 

The powers that be bought Winterflood’s proposal. The AIM market was born and then subsequently exploded, becoming one of the world’s most successful growth companies with 852 companies quoted today, valued in total at £135 billion.

 Since AIM opened its doors, around 3,980 new companies have listed, raising between them £130 billion of fresh capital. Asos started out life on AIM while other high-profile companies which came to the market include Fevertree Drinks. 

Meanwhile, Winterflood – or the Guvnor as he was called – went on to set up Winterflood Securities in 1988, a bespoke “market jobber” offering liquidity to retail brokers and asset managers. Better known as Wins, the market-maker was quick to embrace the latest trading technology and was quickly snapped up by Close Brothers in 1993.

Today Wins it’s one of the top UK ranked equity market-makers with big international coverage. Winterflood stayed on as a non-executive director until retiring in 2017. Now it was his turn to be part of the great and good, becoming chair of the Gilt Edged Market Makers in 1994, then joining the Secondary Market Committee in 1996 and becoming a freeman of the City of London in 2002 for the Livery of the Worshipful Company of International Bankers. 

As the tributes have flowed in over the last few weeks since his death, so have many lovely anecdotes about his early career and character. The son of an East End tram driver, he began his City career in 1953 as a messenger boy for stockbrokers Greener Dreyfus & Co. Part of his duties was to light fires, fill inkwells and deliver Sobranie cigarettes to the senior partner each morning. Times have indeed changed.

After two years in the RAF for his National Service, he joined Bisgood Bishop on the London Stock Exchange as a jobber, becoming a member of the exchange in 1966.

An unassailable patriot, Winterflood was always dubious about some of the London Stock Exchange’s overseas merger attempts which he believed would dilute its influence, arguing that the LSE should be the one pushing outwards and be the predator.  He also feared the exchange – in its move to focus on data information services –  would also drop the ball when it came to fostering the cash markets, particularly for the UK’s smallest companies. Considering the problems which the LSE is currently experiencing in attracting big corporate names to list or keeping companies to stay on the public markets, he may well have been ahead of his time.  

Winterflood was an early eurosceptic and a big Brexiteer, to the extent that he was often quietly ticked off by the more Remainery City establishment to keep his views quiet. To show his family the benefits of Western capitalism, he took his wife, Doreen, and their three children on holidays to communist countries, including Cuba, Romania and North Korea. 

He was always well-tanned – a legacy of his communist holidays – and immaculately dressed, choosing slightly shiny grey suits with pink shirts with white collars and often pink or silver ties. And always topped by the biggest and most beaming of smiles. 

Yet what most of us in the City remember even more about Brian Winterflood was his extraordinary charitable work, as I witnessed personally. When we last spoke, I mentioned that I was about to set off with my husband and sister-in-law on the 100km pilgrims walk from Santiago De Compostela to Finisterre – so named, according to the Romans, because they thought it was the end of the earth. Just a few days after our call, a sweet note arrived from him, together with a generous cheque, which he wrote I should donate to the charity of my choice, and wished us luck. What a gentleman. (The walk was not for charity). 

Over the years he has helped raise millions for charity: he was one of the founding members of the October Club, which has raised £15 million since it launched in 1987, and was also closely involved in the Stock Exchange Benevolent Fund, Save the Children and the Lord Mayor’s Appeal. He was also patron of the Natural History Museum, the Museum of London, and The Science Museum. 

One of his greatest dreams was to establish a Stock Exchange Museum in London. Maybe someone will do that now; it would be a fitting legacy, complete with a special section devoted to the history of jobbing and the background to the exchange’s revolutionary changes which allowed the raising of new capital for entrepreneurial yet risky young companies – the real goal of the public markets. 

What has struck me most, though, in reading through the obituaries and wonderful tributes from his former colleagues and friends recalling his great achievements, is that he is still known as plain vanilla Brian Winterflood. It is remarkable – if not astonishing – that after all that he has contributed to the lives of so many thousands of companies, their bosses and workers, the City and the country, that he was never knighted. When you think of all the other grand figures – many of whom have been tarnished by the financial crash – who have been thanked for their services to finance, it is truly bizarre. Was he too outspoken or just from the wrong side of the tracks? 

Brian Winterflood: January 31 1937 to June 29 2023. A memorial service has yet to be announced.