Julius Baer, is promoting its absolute return bond funds range to UK investors. Highlights within the range currently include the following fund:
Julius Baer Absolute Return Emerging Bond Fund. Launch date 31st December 2007. The fund had an absolute return of 2.13% since launch and has outperformed three month USD Libor by 1.01%. Fund size: USD 0.1bn. Target return: three month USD Libor +3-4% per annum. Historical annualised volatility: 1.0-1.5%. Available in USD and EUR hedges share classes.
Monday, 6 October 2008
Julius Baer launch new absolute funds
Wealth party diary
It’s always busy in the London wealth space when it comes to entertaining and never more so than in 2008. The Family Investment Office of Unigestion started off the proper summer party season, as they always do, with their annual cocktail event, which attracted the usual industry bigwigs. Daniel Martineau of Close Summit Trust Company was spotted on a hop over from Geneva; Clive Nicholson, former Managing Partner at Saffery Champness graced the party with his presence and Mike Covell formerly of Goldman Sachs, but now about to launch as a consultant, also made a rare public visit. (Robert Suss has taken over the top job at Goldman Sachs).
FF&P, who count Ian Fleming, the James Bond author, as an early member of the now multi family office, celebrate their James Bond 50th anniversary year and have held a multitude of parties and events which are the brain child of Penny Lovell and aided by the charming Nicola Murphy there. On Wednesday 11th June FF&P held a “Miss Moneypenny event” with Joanna Lumley and Samantha Weinberg (who is also the author Kate Westbrook) reading from her book “The MoneyPenny Diaries”. Matthew Fleming, former cricketer, kicked off introductions with Louise Holmes of Room to Read (www.roomtoread.org) making the appeal for generosity from attendees for the charity auction held afterwards. Room to Read was founded by an ex Microsoft person, John Wood who has many social entrepreneur awards to his name. A Bonhams auctioneer cleverly upped bids and then appealed for just £130 per person to help build a school for children supported by Room to Read. Many put their hands up but Suzanne Reisman, to her credit, was one of the first. Suzanne specialises in US private client law and is based in the UK (www.suzannereisman.com).
Ascot was a fine affair with Baker & McKenzie’s Paul Stibbard and Ashley Crossley hosting two tables at the event. Top hat and tails were the order of the day and their guests included Anthony Valgimigli, Barclays Wealth on the board governing India and Middle Eastern clients; Rose Wong, SG Hambros Bank who delighted the male audience accidently with pictures of herself at a Coutts jewellery ball; Juliet Wedderburn at Deutsche Bank Private Wealth and new arrival Rupert Jacobs of Butterfield Private Office who is a fresh off the ’plane from Bermuda Rothschilds operation and working with Katie Booth Managing Director of the operation. Betting was in earnest led by Ian Grant at BNP Paribas, and although he racked up wins, big losses were the order of the day for the rest of us. The reason cited was bad feng shui with the positioning of our corner table s in the lunch room and a competitive field of Middle Eastern; Irish and Kentucky race horses. (Anthony Valgimigli tips off Kentucky as the place that will be yielding some serious race horses in future). Losses were quickly forgotten though as a full three course lunch was served followed by cream cake after cream cake and champagne, followed by superb white then red wine, desert wine, port, brandy and the launch of the Bollinger Rose new arrival. It was no wonder there were a few dizzy travellers on the way home courtesy of the Baker & McKenzie tour buses. (Whats on tour, stays on tour unless Citywealth Editor is there).
Fortis, sponsored the whole Hurlingham Club tournament providing their private wealth guests with Jo Malone goody bags, branded baseball style caps to protect from the sunshine, Evian mist spray and plenty of Pimms to ensure some dehydration occurred. Citywealth Editor was treated to lunch in the players room, followed by some veteran tennis and some up to date stars. Marat Safin, stole the show with graceful leaps and bounds and although he didn’t win his match, he stole a place in most of the ladies hearts.
Mark Rushton, London and Rick Denton of Guernsey Fortis were hosts and guests were mainly clients of the bank. A lovely day of cream cakes was had and champers and Ian Orton of the Wealthnet was spotted sticking very sensibly to soft drinks.
FF&P held a further party to launch their Suffolk Street offices, the new home of Penny Lovell and her multi family office team at FF&P. With a terrace outside, guests were able to relive an old tradition and smoke Cuban Cohiba cigars while quaffing champagne and eating tasty nibbles.
This week also included the Key Wealth forum which had around fifty guests at The Law Society and a superb full English breakfast on offer. Also last week was the LG Legal press party and Wimbledon with Stanford Eagle who had centre and No 1 court tickets for their guests with client entertaining all day. Goody bags included poncho’s and umbrellas but the weather mostly held. Send your party diary stories into Citywealth Editor. kjones AT citywealthmag.com
www.citywealthmag.com
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
Citywealth pearls of wisdom: David Rigg: protecting reputations
David Rigg is the founder of Project Associate, a leading UK consultancy specialising in reputation and crisis management for private individuals. He offers his pearls of wisdom for clients and banks.
“Many high net worth individuals have spent a lifetime far from the public eye, and sensibly so. The have frequently built an enviable reputation amongst their friends, family and business colleagues. Reputation is a precious asset requiring nurture and husbanding often over many years. But it is also a fragile creature and can be destroyed in a day. Profile and reputation do not always make good companions.
I am often asked “I think I need a higher public profile, can you help?” My default answer is - “What on earth for?”
In today’s frenetic media world with its twenty four hour rolling news, populist newspapers and explosive growth of the internet, a high public profile carries with it many hidden risks. Few of us would want every nook and cranny of our lives past and present put under the microscope.
Of course there can be sound reasons for having a higher profile – Richard Branson is a master of the art and has often said he does it because it is much cheaper than advertising and it has helped to build his businesses and create the powerful Virgin brand. Where there is a good business reason then a carefully planned approach is needed to avoid, so far as possible, the pitfalls that await the uninitiated. This is not an area where flying blind is to be advised.
And then there are those who have a profile thrust upon them whether they like it or not. I have acted over the years for some of the world’s richest people, often inheriting great wealth upon the death of a parent or other relative. If the benefactor was in the public eye, then so will be the beneficiary. Even if they were not, other events - family feuds, indiscretions by offspring or attacks by disgruntled ex employees for example – can conspire to bring the beam of the searchlight into play. And that can be an uncomfortable and even frightening experience.
So what to do? The point, as the military would say, is that time spent in reconnaissance is seldom wasted. In other words planning is key. Working closely with existing advisors, a careful review of the reputational risks needs to be undertaken and then a plan constructed. Every case is different, each person has their own individual requirements and it is certainly not a case of “one size fits all”.
If sufficiently well thought through there is in fact no need for the individual’s life to be ruined or turned into a constant game of cat and mouse with the media. There are strong privacy laws in this country and sensible, reasonable precautions can help clients to avoid many of the obstacles along the route. The secret is to plan, because the day the media calls for your comment it’s too late.
Thoughts for financial organisations dealing with the current economic turmoil
As far as hedge funds are concerned, I believe their past secretive behaviour will make them the fall guys, mainly because they‘ve actively pursued invisibility. You could draw the same parallels with private equity organisations but they have been much better at putting their houses in order and aren't in the same firing line. I believe, hedge fund people will have their secrecy come back to bite them now.
On the overall situation, it is a warning, when people in large numbers are not prudent with client money, it becomes very difficult to separate one private bank from all the other private banks. Every bank will have to live through the pain of majority mistakes now. I advise that private banks keep communication channels, at all levels wide open. Not just press coverage but keeping clients with substantial assets informed of changing situations and reassured: a lot of communication is important. And from a customers point of view with assets and money in a bank, it’s a good time to take some professional advice on the security of the institution holding capital.
Contact: Heidi Mallace for any further information
heidi.mallace AT projectassociatesltd.com
www.projectassociatesltd.com
Brian Clarke, Director of Key Trust Company offers some views on investment for family offices and families in business
Brian Clarke, Director of Key Trust Company and recent winner of the STEP independent trust company of the year, gives Citywealth his views during the current difficult times.
The events which lead to one outcome on Monday can lead to a different outcome on Tuesday. There is now simply too much information for any one individual or a computer to fully comprehend. There are just too many moving parts and our minds are trained to select only the information we need and to filter the rest.
Applying this concept to the market suggests that each investment manager or trader will tend to focus on what they personally consider important and ignore the rest. Two old (but none the worse for that) investment philosophies are: The random walk theory, which says that everything that can be known is already factored into the price, therefore the move in tomorrow’s price will be random.
The other theory is that while it pays to follow a trend, when following the herd, accept that you are walking in the droppings.
Because decision makers work with fundamentals, technical signals, and numerous financial variables to meet the supply and demand requirements of their firm, they have to select those elements that are relevant to them. They focus on those elements that are specific to their decision-making, filtering out other variables as either being too small or too fleeting. Result: they do not work with the real market but with a mental model of the market.
In a year when the filtered-out issues suddenly become dominant, this can have a disastrous effect on investment policy. Banks, commodities, oil all have significant valuation changes beyond any average trend line.
At our annual meetings with family clients, we are always talking about the entire global spread of investments and how important it is to ensure a balance.
The elements we strive to include are real estate, art collectables that can be enjoyed, land, cash, equities and holdings for long term income. As an independent company, we are perfectly placed to introduce the best managers for each asset sector.
In these volatile times, I believe, having a secure, broad and inclusive spread of assets gives a good foundation for stress-free living.
www.key-trust.com
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