Profile: Banker from mining town hopes to strike gold in City

Stephen Koseff is clearly a man who likes a challenge. The chief executive of Investec, the South African niche banking group, is grimly pressing ahead with a £700m stock market float in the weakest market for years. As he does so, an industrial tribunal has just ended in which a female former media analyst at London-based Investec Henderson Crosthwaite claimed sexual discrimination. The case has dragged the bank's name through the mud.

The timing is awful. As markets wobble across the world, UK floats such as Focus Wickes and Yell have already been pulled. Meanwhile the industrial tribunal led to questions about the quality and independence of the bank's research.

At the mention of the tribunal, Investec's PR chirps up, saying the lawyers have said he must not talk about the case. But the combative Mr Koseff, 51, whose black suit and short, stocky build give him the look of a nightclub bouncer, wants to say his piece.

"Any negative publicity can be embarrassing," he says in a strong South African accent. "But we will not back off. We will not allow someone to hold us to ransom. We have built an organisation that does enable women to rise to senior positions. We have no glass ceilings."

Investec's pathfinder prospectus will be published today and Mr Koseff and his team will trudge round battle-weary institutions to persuade them to stump up £100m.

Ask him why he is pushing ahead, and his answer is simple enough. He doesn't have much choice. "The key reason is that there have been changes to the tax rules in South Africa," he says. "We are moving to a dual listed structure (with listings in Johannesburg and London) and it would be very expensive (in tax terms) if we delayed beyond 31 July."

This is hardly the best negotiating position to be in when you're trying to raise money. But Mr Koseff says he will go ahead with the listing even if he fails to raise any fresh funds at all. "The timing is unfortunate but we're not in the market to raise a significant amount of capital, so it's not so bad. And we've been working towards this for four years, and to stop and re-start would be far more costly. It is really a re-listing rather than an IPO."

As for why Investec is listing in London at all, the answer is the usual one of access to capital and a higher stock market rating. "We don't want to broaden our operations. We want to stay narrow and focused. In order to take it to the next level we need to push ourselves into international capital markets and not remain under an emerging markets umbrella."

Investec has already snapped up UK firms such as Henderson Crosthwaite in 1999 and Carr Shepards in 1996. It may start to look at more. "In investment banking we have out platform so we would not want to buy anything more. Acquisitions could be in private banking, private portfolio management and asset management. In these kinds of times, many companies go back to their core and sell off bits. There's a few things around that could give us our opportunity."

The other issue Mr Koseff may face is a sceptical attitude towards South African companies after compatriots such as Old Mutual and Dimension Data came to the London market and bombed.

"We are coming at a completely different time. Dimension Data came in the tech bubble and at a fancy price. Old Mutual was a South African business that was listing and had to move very quickly to buy international assets. It made one or two acquisitions at fancy prices and got caught out with the timing."

He also says Investec has a broader spread of earnings than Old Mutual, which remains dominated by the rand. "Sixty per cent of our capital base is outside of South Africa and half our bottom line."

Investec is an unusual company, built up from scratch in the past 25 years. It has a unusual culture with a list of key values set out in documents. These include the following: "We will break china for the client, having the tenacity to challenge convention. We show concern for people, support our colleagues and encourage growth and development. We respect the dignity and worth of the individual through openness and tolerance of difference and by the sincere, consistent and considerate manner in which we interact."

It's heart-warming stuff, backed up by staff conferences where employees are lectured on how to deal with each other. The company even employs a behavioural consultant to address worker-related issues.

So how does such a "moral high ground" stance square with the sexual discrimination case that has been splashed all over the papers? The case involves Louise Barton, a former media analyst at Investec who discovered she had received a fraction of the pay and bonuses of a colleague, the former Independent journalist Mathew Horsman. A verdict is expected in September.

Mr Koseff denies that Henderson's office was an old-fashioned City environment. He adds that he supports Mr Horsman's pay package, which was £1m in 2001, despite it being significantly more than his own. "Bernard [his managing director] and I earn considerably less than Mathew Horsman. We've never earned a bonus like that in our history. But we believe the people who bring in the revenue should earn the bonuses."

Not that Mr Koseff needs the money. He was in virtually at the start of Investec and still owns a small amount of equity.

Born in a small town outside Johannesburg called Benoni, which apparently means "son of sorrow", Mr Koseff was the son of an accountant who kept running the local accountancy practice until he was 87.

Mr Koseff stayed in the small mining town for 40 years, only moving a decade ago. He followed his father's footsteps, studying accountancy and then taking an MBA at Witwatersrand University. He joined Investec in 1980, when it had just eight staff.

Married with two children, his favourite pastimes are visiting game parks and watching football and cricket.

"I follow Tottenham Hotspur. They came to South Africa in the 1960s with a team that had Jimmy Greaves and Danny Blanchflower. I've followed them ever since."

On the problems of South Africa, he is upbeat, despite his wife once being forced from her car at gunpoint in the driveway of their home. "I think South Africa has made remarkable progress. We have a bit of crime and violence. But I think they are starting to get their hands on it. And tourism is starting to pick up again."

He will need all this optimism as he sells Investec to UK institutions over the coming weeks.

Prospecting for £100m

Title: Chief executive, Investec

Age: 51

Pay: £441,000

Career history: Studied accountancy at Witwatersrand University, followed by an MBA. Joined Investec in 1980 as the firm's eighth employee. Appointed managing director in 1988, and chief executive in 1996.

Interests: Golf, sport, visiting game parks. Has supported Tottenham Hotspur since the club visited South Africa in the 1960s.