Evolution Group chairman Alex Snow is a contrarian.

Tell the 38-year-old former England (A) rugby player to go left, and he will head right. Twice now, he has jumped out of boom markets and gone heavily into cash.

First in 2000, he left a thriving equities career at what was then CSFB, sold pretty much everything and started the company that became Evolution. More recently, in 2006, he became highly sceptical of the surging market in leveraged buyouts and initial public offerings because levels of leverage had, in his words, become “deeply scary”.

Mr Snow reined in the cowboy corporate financiers and traders who had got the company in hot water with regulators, bought Williams de Broe, a troubled asset management business from ING, and began the slow process of broadening Evolution’s revenue stream beyond the highly profitable and highly cyclical corporate finance transactional work that had been the firm’s bread and butter. He also started hoarding cash.

His investors were not impressed and, by 2007, they were in full revolt. Activists including SVG Capital began demanding that Evolution hand back the money in the form of a special dividend. Mr Snow, a descendent of the Hambro merchant banking family, resisted.

“I know what I am good at and I stick to it. I’m a reluctant bull,” he says.

Look who is laughing now. Although Evolution warned on Thursday that its securities business would post a loss for 2008, its asset management business is holding its own and the company expects to turn a small profit.

The group is also sitting on more than £100m in cash and is on an acquisition drive. Last month, it picked up the clients and staff of Singer Asset Management from Kaupthing, the nationalised Icelandic bank. Mr Snow told the Financial Times in an interview he envisioned making “one or two more acquisitions” in the next 18 months or so.

This year, Evo’s share price has fallen 45 per cent, outperforming peers such as Collins Stewart, Numis and Cenkos, and now is the largest of the group by market capitalisation.

Still Mr Snow is not celebrating. “We can’t eat relative cake and children can’t wear relative shoes,” he says.

So Evolution is battening down the hatches and preparing for tough times, cutting costs to make sure that it can turn a profit.

“The key for 2009 is that every financial services company like ourselves has to demonstrate that it can make a reasonable return based on its established recurring revenue streams ” – such as corporate retainers and asset management fees – Mr Snow says. “I wonder whether my competitors can survive without a generous helping of cyclical business.”

To that end, Mr Snow is working hard to integrate the Singer business, tying up key staff members with contracts and convincing important clients to stay. He plans to shut Singer’s plush Hanover Street offices as soon as possible, consolidating the staff into Evolution’s more ordinary digs in the City.

“Buying the business is easy. Making it work is hard,” he says. It is an area where analysts say he excels.

“This is the time in the cycle when Alex Snow shines – he finds acquisitions that are cheap and makes the most of them. While that is not without risk, it paid off when he bought Williams de Broe and Christows [another asset manager],” says Sarah Spikes, a financial services analyst at Arden Partners.

Not surprisingly, Mr Snow is also hunting for his next target. This year, he has sniffed around smaller stockbrokers although no deal resulted. “I think there are equities that show real value,” he said.

Evolution has also poached staff from rivals, most recently bringing in Guy Cornelius, formerly a Lehman Brothers managing director, to expand its small fixed income arm. Andrew Umbers, who heads Evolution Securities, said the group saw an opportunity to step in as other banks and brokers moved out.

“Tomorrow’s fixed income is the agency model”, in which banks and brokers focus on research and execution, Mr Umbers says. “It’s becoming more customer-friendly and less conflicted with the use of our own capital.”

Just as Mr Snow was an early bear in 2006, he is now starting to separate from the pack in his thinking about the future. “If everybody agrees it is awful, then it must be priced in,” he said. “It makes me more inclined to be positive.”

But good times could bring new challenges for Evolution that Mr Snow does not relish. “I might not be the right guy any more. I’m a much better operator in difficult times,” he said. “I’ve been here quite a long time.”

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