Citywealth Magic Circle Awards 2009
Date for diaries: 14th May 2009
Millennium Hotel, Mayfair, London W1
Citywealth publishes Global VIP leaders list selection - release January 2009
Host to be confirmed is once again: Gyles Brandreth
British ballroom theme
For the past four years the Citywealth Magic Circle Awards has brought together the leading intermediaries and advisers in the UHNW space. This year’s awards, held in May 2008, were attended by nearly 350 of the key individuals from over 120 organisations representing the crème of the UHNW advisor group. They included the most influential trustees, lawyers, private bankers, family office executives and accountants who represent the world’s wealthy. The evening was a non stop opportunity for the top level of the wealth management industry to meet and network. 2009 promises the same.
The evening also marks the launch of The Citywealth Leaders List 2009 which will be focussing on those that have had a track record as being the best and most supportive advisers and best financial centres in difficult times. The focus is on those that will be best positioned for the upturn we all hope will come later in 2009. This is the message that clients have been telling us is important to them and the message that leading advisers wish to put across.
To add a bit of glamour, the Citywealth Magic Circle Awards also attracts a smattering of Rich List individuals there to raise awareness of the charitable causes that they support as well as to enjoy the evening’s entertainment. Each year we are delighted to support a major international charity and in May 2009, the charity will be the UN World Tourism Organisation’s foundation Sustainable Development for Eliminating Poverty. Ambassador Madame Young Shim Dho will be attending.
For further information on the Citywealth Magic Circle Awards, please contact: Joe Bell 01483 526445 jbell AT j-p-c.tv
For further information and nominations for the 2009 Leaders List, please contact: Karen Jones Tel: 020 7495 1697 kjones AT j-p-c.tv
Friday, 12 December 2008
Citywealth Wealth Management awards - the Magic Circle Awards Event 2009
Monday, 6 October 2008
Citywealth interview: Louise Stoten who ranked in the top twenty women in private wealth in 2008
Louise Stoten, a partner at Payne Hicks Beach, started life in the City in the late 80’s at the tender age of seventeen, working at a private client stock broking firm. Despite learning the business quickly and getting a good grounding in dealing with private client lawyers, she experienced some hard times at first hand. Landing in her job at the time of Black Monday, one of the worse times in the financial history of the City of London, the capital went into a dire recession and eventually her company, unable to sustain their business, closed down. At twenty one she found herself being made redundant.
Not one to miss an opportunity for fun though, she spent her redundancy time wisely, heading off to Italy for the World Cup and coming back only when her redundancy money ran out.
On her return she reviewed the jobs on offer, but the idea of 7am starts on dealing desks didn’t appeal, so she opted for a career change into the law. She had A levels in economics and law and although she says she didn’t realise the magnitude of her decision, she jumped headlong into finding a role to support herself while she studied for her law degree. She applied for paralegal jobs and got some interest but then heard that an assistant had resigned at Beachcroft Stanleys in their private client department working with partner, George Francis, who was previously at Farrers and is an old Etonian, which we both agree was ‘very private client’ in those days. Through a work connection she got an introduction for an interview and with her experience with investments and trusts she says, in her usual honest and open style, she “blagged her way in.” Her studies took a gruelling seven years to complete doing a part time degree and finals in the evenings.
During this time Beachcroft Stanleys were merging with another law firm Wansboroughs who, Louise says, seemed less interested in private client, so the team moved to Payne Hicks Beach in 1997 and they took their clients with them. Following twenty years in the industry, Louise says she now has a wide spectrum of clients that include agricultural and landed estates, onshore and offshore trusts and UHNWi’s and in the last five years, as deals have started to mature, a large influx of private equity and hedge fund money.
Multi generational issues particularly interest Louise. “Some clients preserve their wealth well.” She explains. “I have a couple of clients with big stately homes that are expensive to run, with no natural succession so we’ve looked at merging succession with others in the family. I think splitting family money up is a mistake. It means rather than having one super wealthy family, you suddenly have a handful of less wealthy individuals and what can be achieved with those families reduces. I prefer to keep family money solidly together.”
When dealing with private equity and hedge fund clients, Louise is glad she spent some time working with investments in her early career. “It definitely helps to understand better the areas in which your clients operate, the stresses they are under and to communicate with them on their level as sophisticated investors.”
She explains further. “A family constitution is fine but lawyers should also have an understanding of how to manager money to get a broader picture of clients’ assets and lifestyle.” Clients who have recently acquired wealth, generally have a short term outlook and something she likes to encourage is a thirty to fifty year approach. “Although trusts are a more difficult concept to use now we are looking very seriously at family partnerships, but these may not be flexible enough to work over successive generations.”
Of her client work and trends, private charities are ‘very fashionable’ now. “Everyone wants one.” She says laughing. “It’s a good way to educate young children , especially if they are involved as a charitable trustee. The can learn about investments, tax and meet advisers whilst doing it with money that isn’t theirs.” She mentions one client who has £250million to transfer to a child but will leave a significant proportion to a private charity.
“With the differential between income tax and capital gains tax rates, we are looking closely at OEICs and insurance bonds. Clients with cash from £5million upwards, want to look at solutions with tax wrappers and deferral products. Some may only work if you are planning at some stage; otherwise the deferred tax involved may be large.”
Louise sees a gap in the market for private client lawyers to work with private equity and hedge fund financiers. “The magic circle corporate law firms do the fund works for investors and directors but in many cases there isn’t any ongoing private client support and often the individuals don’t really appreciated their position in a structure and how to plan to extract their profits from it. Many corporate firms don’t have a department to look after day to day individual affairs one they have set up the fund.”
Louise agrees with many in the private wealth sector, that the term family office is vaguely frustrating. “Many private client lawyers acting for a wealthy family would do a lot of the work that a family office might do.” Louise says, “Our work has always revolved around individual clients, offering them a traditional, personal and tailored service. We aren’t transactional , we expect to deal with all of our clients affairs for a long time and hopefully for a number of generations.”
Investment manager selection for clients is also something Louise is involved with but she always advises clients to review their structures and planning first before leaping into investments, which she says sometimes means she locks horns with bankers and investment managers who are eager to sell products. “Most clients don’t really need much of their money, so I ten to plan what we will do with the bulk of their fortune for the next twenty years plus, then look at structures to minimise tax then decide on investment strategy.”
She laments the current trend to hire lawyers in banks. “If you are not very careful they can devalue the lawyer proposition and there may be a prevalent short term investment view which I disagree with. I always look at wealth management over a long time period because clients who have recently acquired wealth rarely appreciated that money, if managed well, has a habit of growing massively and can get out of control without good structuring. Some of the packaged banking products that work now, may not work in a few years time.”
Louise also agrees that clients are getting younger and has a number of thirty something private equity entrepreneurial clients with money coming online as their deals mature. However she likes both old and new money clients and thinks they compliment each other. “Lessons have been learned about how old money has survived and that best practice can now be applied to newer money.” She makes a keen observation. “Old money was once new money and new money usually wants to retain wealth long enough to be old money.”
www.phb.co.uk
Private bank Lombard Odier and the Institute of Family Business find the golden thread to integrate children into a family business
Generating emotional ownership is the golden thread identified by Lombard Odier, a seven generation family business, and The Institute of Family Business, to help children successfully join established businesses and promote more longevity. The report throws to the rocks perhaps, the idea that family businesses rarely survive past two or three generations of ownership.
In a forty eight page report, emotional ownership, which includes introducing children at six years old into various areas of the business, with activities around the dinner table, is cited as key.
The report goes on to explain that emotional ownership is defined as a sense of closeness and belonging to the family business: something that penetrates below the surface of the mind into the identity of the person.
And the more the business actively involves a family member to raise his or her EO, the more inclined they will be to give service and to be involved.
The survey included six hundred families in sixty seven countries and offers hands on advice for implementation of their findings. Steps include: Absence of suffocation from older family members and an understanding that joining the family business means it doesn’t have to be for life.
Saturday, 9 February 2008
Stenham Property Raises Around € 50 million for its Berlin Residential
Stenham Property recently launched the Stenham Berlin Residential Fund whose focus is to acquire, refurbish and manage residential buildings in central Berlin. The fund closed with almost € 50 million of capital from investors and is likely to purchase in excess of € 175 million worth of property.
Stenham, who are a renowned, top five family office in the UK, has been investing in the German property market since 2005. Through its own German team and a range of successful joint venture relationships, it holds over € 1.6bn of property investments in Germany.
Sascha Lewin, Head of European Property at Stenham, said: ‘We started investing in Germany over 3 years ago to take advantage of the positive macro economic outlook. Today Germany is proving to be a resilient, strong and growing economy. Over the past 12 months or so, the cost of borrowing has been rising and the sub-prime fall-out in the US has put a severe squeeze on global credit markets. These factors have had a sobering effect on investors and have flushed out poorly capitalised market participants’.
He added: ‘Further market increases and falling initial yields are therefore unlikely to continue in the medium-term. Consequently, the Stenham Berlin Residential Fund is targeting growth through effective asset management and value-add investment opportunities, which is where Stenham’s expertise lies. This is the reason why our fund is closed-ended with no right of redemption over the 7-year life of the fund.’
The Fund is listed on the Channel Islands Stock Exchange.
http://www.stenham.com/
Saturday, 1 December 2007
Sand Aire family office - tenth anniversary book for clients
Alexander Scott and Marcus Gregson who are both in Chair positions at Sand Aire, a top five UK family office, are a formidable pair. Alex has an esteemed family background which combines with Marcus, who was formerly Chief Executive at HSBC’s private bank. Celebrating its ten year anniversary this year, Sand Aire decided to buck the party trend and opted for a published book. It offers advice for ultra high net worths on the future unfolding over the next decade or two.
Friday, 30 November 2007
Steering family offices to success
Caroline Garnham, a partner at Lawrence Graham, has clients in such far flung places as Switzerland, South America and Singapore. She studied psychology at University before deciding to be an opera singer. She later decided to expand her horizons taking a conversion course in the law, uncertain whether a career on the stage would provide a satisfying future. This led her to Allen & Overy where she started life as a tax lawyer “spending five years in corporate tax.”
During her time in the hard nosed corporate world she found herself gravitating more to people than the deals and so eventually decided to switch into private client.
Once firmly established in the private client space she later took the title of head of department at Simmons & Simmons. The promotion though, wasn’t without its problems. The mid nineties saw London law firms reviewing their core work, which left many like Caroline, who ran a relatively small department, pensive about the future. She determined to use every ounce of energy to build her team and put them in a strong financial position to prevent any ‘strategic reviews.’ Fired-up, she set about inventing a whole new marketplace and revenue stream for herself and her team.
Family offices were a growing area of interest for the ultra high net worth client, which became Caroline's chosen target market. Caroline quickly pin pointed problems that still exist today. She discovered that many family offices as well as being tucked away inside a family business, making them difficult to identify, were often riddled with disputes and grievances or dominated by stronger personalities within the family.
The sorts of problems families were having were wide spread. Trustees were being challenged by children on the death of a parent; second or third wives were fighting for prominent places within a business for their children; distanced or estranged children were being written out of wills and parents spent much time worrying that their vast fortunes would be too stressful to pass down to financially unsophisticated children. “Wealth is like fire” interjects Caroline “if properly contained, it provides warmth but uncontained it can burn and destroy absolutely.” She says her research revealed that many family members had no voice within, with the result that conflict was spreading easily.
Armed with this information, she harnessed her corporate background and hit on the idea of applying board room processes to families or offering them “family governance” as a saleable template. The structure she set up emulated a board room approach, with segmented control and accountability for the offices. It ultimately meant fair procedures and a level playing field for all. Caroline comments. “Despite enormous wealth within a family office, personal issues or favouritism could catapult the office out of control, which in worst case scenarios meant millions in litigation fees.” Caroline began lecturing on the benefits of using corporate business processes like AGM’s in family offices to assist transparency and communication and still does so to this day. “Containing wealth is ultimately going to harness wealth and keep it for proper purposes for instance to maintain the business or help in a philanthropic cause. Otherwise it can be used for unpopular business decisions or to support lavish lifestyles for whoever is in charge.”
Established in this field now with a high profile move to flourishing private client firm Lawrence Graham in the past year, her entrepreneurial drive continues and is expanding into new areas. An imminent project will see a private client online offering launch with Caroline and industry heavyweights behind the helm. It's aim is to promote the private client Industry and highlight good practices. The plan is to have a subscription based interactive website for all within the industry to access. Caroline comments. “It’s for those who are frustrated at not being able to get their marketing message across to the right people.”
Caroline believes there are a vast number of families and multi millionaires who have problems with their wealth but have no idea who to approach, which is one of the reasons for starting the new ‘Family Bhive online forum.’ “I don’t think many private clients are using the industry effectively, they need to know who does what in a more relevant and meaningful way.”
Of the big changes she has seen throughout her illustrious career at the very top end of the private client industry, Caroline says old fashioned tax planning has become exasperating with the likes of Gordon Brown and his tax officers issuing anti avoidance legislation almost by the day. She makes a fair point that it makes life difficult if clients with good tax planning find themselves being investigated. “They understandably find it irritating when they’ve paid good money on legal fees. The UK tax service is too aggressive” says Caroline “I noticed this trend some years ago so made sure I diversified so as not to be too involved in private client tax work.”
Of her actual day to day working life she says she spends a lot of time with families and entrepreneurs who are “very bright.” Ongoing administration is usually not needed for families, her work is more focused on one off structures which she then updates periodically.
As to where her clients tend to reside, she says. “They are peppered around the world on every continent.”
Caroline has more billionaire clients than most and although it’s difficult to put a number on how many, she considers thirty to be a good guess.
Of her clients, Caroline says she prefers dealing with entrepreneurs rather than those who’ve inherited because “entrepreneurs grasp difficult concepts easily and make decisions quickly.” She continues on this theme. “The second generation are often in a difficult spot. Normally whatever they do will evoke criticism from someone and it’s harder to follow in the footsteps of their parents with the public and media glare. A challenging life can result in the second generation client becoming a professional complainer.”
Finishing off the interview I see if we can dig up any stories of super rich excesses. Are her clients all whizzing around in helicopters and private jets? She reveals they are but not just because its fun. “If you have a client with a busy life they probably have enough problems without day to day travel irritations. One of my clients was on the road for three months and was tired and fed up with hotel rooms, delays and dry cleaning not coming back. They spend to ease lifestyle problems rather than to show off.” She confirms.©
This appeared in http://www.citywealthmag.com/
