Global model portfolios for global people
An Investment Manager had a billion dollar book of private clients who were located offshore and administered through the Channel Islands back office.
The clients located all around the world had come to the Manager initially through the acquisition of a UK-centred unit of a large bank, a business that had was being built upon. The clients were former residents, clients with overseas links, or had opened accounts because of the reputation of London for good investment management. However, typically these clients were being managed as the vast majority of the Manager’s clients were managed – as a taxable UK client. Most of these clients were not subject to UK tax and wished to have a global managed portfolio of investments.
The investment philosophy and process within the firm was very tight and well-articulated. Because of the nature of the Manager, there was a strong internal research activity devoted to global investments – they had just never been applied to private clients. I instituted a Global Investment Committee, which I chaired, and we built single-stock portfolios from the research and allocated assets on the basis of a global market-adjusted model.
We developed model portfolios that were US dollar, European-centric (founded on the theoretical Euro of the time) and Sterling-based. These models addressed the personal liability matching needs of the clients from a wide variety of countries. We developed a sophisticated marketing and sales strategy around the global offshore centres and at one time were recording full success in over 80% of the pitches that we made.
The company performed extremely well in the asset management sector, with the private client business being a critical part of the mix that eventually attracted a major global asset management firm to buy into the Manager at a very rich premium.