Market moving increasingly towards niches and bespoke client solutions
Independent wealth manager London & Capital grew its assets under management by 33 per cent from GBP1.2bn to GBP1.6bn in 2012.
Total AUM for the firm, including real estate, now stand at GBP2.3bn (USD3.7bn).
Growth for the 26 year old firm has been achieved through a 66 per cent increase in AUM from US clients domiciled in the UK, a 46 per cent increase from the Adviser Solutions’ offering to IFAs, a 22 per cent increase from UK high net worth clients, and a 33 per cent increase from offshore insurance and institutional clients.
US client growth has largely been driven by UK resident US non-domiciled citizens and Green Card holders’ obligations to undertake onerous investment reporting as part of the Foreign Account Tax Compliance Act (FATCA) legislation, creating the need for specialist advice. London & Capital has operated a specialist US team for over 20 years and is SEC regulated. The firm has received significant inbound client management requests from other wealth management firms unwilling or unable to meet the onerous reporting complexity of new US tax legislation.
The additional growth among UK clients has primarily come from trusts based offshore managing discretionary trusts for professional investors and outsourcing the investment function to London & Capital. The firm has been working with offshore trusts for over 20 years but more recently trusts have been attracted to the firm’s disciplined direct investment in asset classes which provides greater transparency of individual investments and reduces the fee layers which create a drag on returns. Growth has also been complemented by an increase in referrals from lawyers and accountants.
The growth from international insurance and other institutional clients has mainly originated from the firm’s geographic expansion in the Caribbean. Many institutions both in the region and elsewhere have moved focus towards active rather than passive asset management to make their portfolios more responsive to market conditions. The firm’s institutional model enables boards and directors to strengthen corporate governance by having greater control of the investment process rather than abdicating the overall function.
The implementation of the Retail Distribution Review has created an upswing in the number of IFAs partnering with London & Capital to insource the firm’s expertise in fund management. This has been particularly relevant in firms which are looking to provide their clients with sophisticated wealth management services but which are unable to provide this in-house.
Daniel Freedman (pictured), founding managing director of the firm, says: “2012 has been an important year for London & Capital. The firm has achieved significant client growth as a result of the increasing focus on client niches. The economic downturn and new legislation are placing a greater onus on wealth management firms to deliver a personal and specialist service to clients. London & Capital’s attractive client to adviser ratio and focus on niches provides this service to clients and is reflected in the firm’s growth through the downturn.”
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