Mercantile House Holdings in 1979
Mercantile House and International City Holdings
Financial conglomerates Mercantile House and International City Holdings provided consolidation platforms for a number of independent broking houses between 1979 and 1989.
Mercantile House’s acquisitions included: New York-based money brokers Lasser Bros (1977) and Fundamental Brokers (1980); Woellwarth & Co. (1979); the commodities and financial futures brokers Woodstock Inc. (1980) in Chicago and R.J Rouse & Co. in London (1981); Swiss-based money broker Cosmorex (1981) and New York-based securities brokerage and fund manager Oppenheimer & Co. (1982).
In 1987, Mercantile agreed to a £490m takeover from UK financial services group British & Commonwealth, which proposed to retain the Oppenheimer fund management business and dispose of the Marshall’s money and foreign exchange broking businesses, which was now ranked as the world’s second-largest money broker. M. W. Marshall & Co. was sold two years later to a management-led consortium.
In 1982 Mercantile had also acquired rival broker Charles Fulton & Co. but chose not to merge it with its M. W. Marshall & Co. business. Instead it broke up Fulton by permitting the operating companies in the UK, Europe, Middle East and Asia to arrange individual management buy-outs. The Marshall and Fulton businesses were not to be merged until 1999.
Charles Fulton (UK) was formed in 1982 to purchase the UK businesses. It also quickly acquired Fulton’s Middle East operations and in 1984, it bought Mabon Nugent Godsell, the third largest money brokers in the US, which was renamed Prebon Money Brokers. Fulton also bought back its former European operations, primarily based in Switzerland and Luxembourg, rebranded as Fulton Prebon and changed its holding company name to International City Holdings (ICH) ahead of a successful stock market flotation in 1985. ICH completed the reconstruction of its worldwide dealing network by buying Charles Fulton (Asia) in 1986.
In 1985, the Bank of England named Fundamental & Marshall Brokers, Charles Fulton (IDB), Mabon, Nugent International (Gilts) and Tullett & Tokyo (Gilts) as among the six financial groups firms recognised as eligible to operate as inter-dealer brokers (IDBs), a new form of intermediary in the restructured British government securities market. The move came ahead of the deregulation of the London financial markets in 1986, which included the abolition of fixed commission charges and of the distinction between stockjobbers and stockbrokers on the London Stock Exchange and change from open-outcry to electronic, screen-based trading.