User talk:JDF2879/Graham Wellesley

There are some articles referenced here which are no longer online:


 * IFX chief plays against odds: Nobleman Wellesley focuses on tax-free financial speculation, John Coppock, Wall Street Journal Europe, 22 August 2002
 * IFX applies to join LME, Metal Bulletin, 15 July 1999
 * Zetters bets on transformation, Jamie Chisholm, Financial Times, 31 May 2002

Please find these in storage below:

IFX Chief Plays Against Odds: Nobleman Wellesley Focuses on Tax-Free Financial Speculation, John Coppock, Wall Street Journal Europe, 22 August 2002

LONDON - Graham Wellesley is anything but your typical English aristocrat. He speaks with an American accent, loves rock music and used to run a football-betting pool for the fish-and-chips crowd.

Make no mistake, though: The blood doesn't come much bluer than Mr. Wellesley's.

He can trace his lineage to the 12th century and is a descendent of the Duke of Wellington, who thumped Napoleon at the Battle of Waterloo in 1815. As the Viscount Dangan, he will one day inherit his father's title of Earl Cowley.

The 38-year-old nobleman also has positively regal ambitions for his spread-betting and financial-derivatives company.

Mr. Wellesley, who heads IFX Group PLC, last week sold the company's Zetters football pools-betting business, hoping to focus IFX on a potentially enormous market for tax-free financial speculation. IFX made a pretax profit of GBP 1.65 million for the fiscal year ended March 31, reversing a GBP 1.5 million loss the prior year.

With football out of the way, Mr. Wellesley is wagering IFX's future on spread-betting and contracts for difference. Both allow investors to bet on the direction of markets.

While spread-betting is a fairly straightforward up-or-down guess, CFDs are somewhat more complex. Investors buy a contract to speculate on the direction of a stock, currency or index without having to own the underlying securities. They trade on margin, typically putting 10% of the transaction value down as security. For example, someone taking out a CFD on Vodafone shares with an underlying value of GBP 10,000 (15,618 euros) would put up GBP 1,000 (1,562 euros).

Both tools can offer good returns, but aren't without risk. The smallest change in sentiment can produce a disproportionate change in the value of the investment. Unless investors use a stop-loss order, losses can be higher than the original investment, unlike most other forms of gambling, where the original bet is the most you can lose.

CFDs are popular in the U.K. because they are tax-free, allowing investors to escape a 40% capital-gains tax and 0.5% stamp duty levied on normal equity trading. "It's a very exciting industry with great prospects for us, because the whole market is growing," Mr. Wellesley says.

IFX's customers tend to be market-savvy individuals such as City of London professionals, day traders and high-net worth people. But a growth market may lie overseas, particularly in the Middle East, where financial speculation is in its infancy.

That doesn't appear to be problem for Mr. Wellesley, who is accustomed to crossing cultures and classes.

While his fellow aristocrats were going to the Glyndebourne opera house as teenagers in the 1970s and early 1980s, he was a regular at Hammersmith Odeon, a London mecca for heavy-metal bands like AC/DC, Rainbow and Blue Oyster Cult. His neighbors once sicced the authorities on him with a decibel meter for playing records too loud.

Indeed, friends and associates says Mr. Wellesley is no upper-class snob. He doesn't refer to his title in any IFX literature, and there is no alphabet soup on his business card. IFX co-founder and longtime business associate Lorenzo Naldini calls Mr. Wellesley a down-to-earth guy and a natural deal maker. "He doesn't choose people according to their name, position or background. His friends are real friends no matter where they came from," Mr. Naldini says. "He is an incredible salesman but without being, `Buy this, sell that.' He is able to make everyone feel comfortable by cracking jokes and being positive. That's probably because he's more American than English."

Mr. Naldini says the only complaint he has about Mr. Wellesley is that he is sometimes too optimistic.

"We sometimes have to give him a reality check," he says.

Far from the traditional aristocrat's playing fields of Eton, Mr. Wellesley spent his early life in California and went to the American Community School north of London when he returned to Britain at age 10. He later received an economics degree from Franklin College in Switzerland, an American liberal-arts-style university.

Mr. Wellesley's one nod toward a blue-blooded calling was an 18-month stint in the Household Cavalry in the mid-1980s, the unit of the British army that protects the Queen and a traditional hangout for the military-minded gentry.

He then traded in his metal tunic and red-plumed hat for a business suit and a spot on Hoare Govett's equity-derivatives desk. From there, he moved into derivatives-trading jobs at Banque Indosuez in 1988 and ING Charterhouse in 1990. In 1992, Mr. Wellesley joined Gerald Metals as the head of its foreign-exchange desk.

That, he says, gave him the confidence and experience he needed to found IFX in time for a serious bull market in 1996.

Far from finding betting on markets vulgar, the descendent of one of England's greatest heroes says: "It's just a form of investment."

Mr. Wellesley adds his calling may not be noble, but it certainly offers money-making opportunities for a new class of investors. "We allow people to trade in ways they couldn't do before. It opens it up to a wider marker, which is why it is growing so fast," he says.

Let's not forget the Duke of Wellington was a successful gambling man himself, correctly betting Napoleon would fall for a classic pincer movement, allowing the Duke to slaughter half of the French leader's army before the other half surrendered.

IFX has grown strongly since its founding. It is among the top four spread-betting and CFD companies in London, which total about 50,000 accounts. The other three are Cantor Index, CMC, deal4free and market leader IG Index.

With most markets in the doldrums, IFX is opening about 250 accounts per month and has more than 10,000 clients on its books.

The company's shares peaked at 158.5 pence this year and are trading at about 122.5 pence, valuing IFX at GBP 32.7 million. It trades on a price-earnings ratio of 22 on expected earnings for the year ending March 2003, which suggests the market thinks it is a growth stock.

Mr. Wellesley drew GBP 134,563 in total salary last year, according to the IFX's annual report to shareholders, more or less in line with the pay of a Financial Times-Stock Exchange small-capitalized company. He also has 683,067 stock options at an exercise price of 160.64 pence and owns outright 4.4 million IFX shares, or 13% of the company, currently valued at GBP 5.4 million.

IFX applies to join LME, Metal Bulletin, 15 July 1999

IFX Ltd, a London-based foreign exchange market maker, is to set up a metals desk and has applied to become a ring-dealing member of the London Metal Exchange. Until IFX receives LME approval it will be cleared on-exchange by an existing ring dealer. IFX is to put together a desk of four traders, headed by former Refco and Mitsui man Mickey O'Connor, and will have a team of eight by the end of the second quarter next year. The firm will also launch an Internet-based system market making for LME contracts by the end of this month. IFX directors Graham Wellesley and Lorenzo Naldini last month purchased the 51% stake owned by the firm's then US parent company, IFX Corp, in a management buy-out that leaves them as sole shareholders. The deal was formalised on June 30.

Zetters bets on transformation, Financial Times, 31 May 2002

Zetters yesterday moved to reassure investors that its transformation from a football pools group to a global financial and spread betting business would not exacerbate earnings volatility.

It is understood to want to sell its legacy pools business and Graham Wellesley, chief executive, said it was in shareholders' interests for that division to be sold so investment could be concentrated on its core financial markets operations.

The group, which began life in 1935, is also changing its name to IFX Group - after the foreign exchange business it bought in 2000. Last month Zetters added to its spread betting exposure when it paid £8.7m for Financial Spreads.

This week IG Group, the UK market's only listed dedicated spread betting concern, delivered a profit warning after a reduction in its hedging had coincided with a good run for clients. Mr Wellesley said: "Our hedging policy is more conservative than IG's."

The pools operation increased profits 31 per cent to £644,000 following sharp cost cutting, but customers for the business are declining by about 13 per cent a year.

Despite "a challenging and volatile year" that saw trading drop sharply following September 11, turnover rose 49 per cent to £15.7m ( £10.6m), fuelled in part by the acquisition of the Canada-based Galliano Investments.

Operating losses fell from £1.99m to £668,000 for the year to March 31, but after an exceptional gain of £1.84m from the office sale and £439,000 of net interest received, the pre-tax result moved from losses of 1.49m to profits of £1.62m. Zetters shares rose 3p to 136 1/2p.