THE ISSUES Wealth management D

aniel Pinto, the CEO of Stanhope Capital, learned his trade as a banker in the corporate finance department of SG Warburg. In those days, before it was sold off to the Swiss in 1995, it was one of the great- est names in British merchant banking. Pin- to, who had recently completed an MBA at Harvard, got on well with his Warburg cli- ents, many of whose businesses he helped sell. He soon found himself being invited to sit on their family boards to help decide how their newfound fortunes would be invested. That’s when he made an unexpected discovery. The private banks, he recalls, were ‘riddled with conflict’ because of their commercial need to sell clients their own in- house investment products – regardless of whether they were the best available. That gave him an idea. It was a simple one, about a firm that wouldn’t have any products apart from the advice that it offered, and that would embrace what’s now known as ‘open architecture’ investing – an approach that gives a firm and its clients the freedom to choose the best fund managers. Soon Pinto set about building up a core group of three or four families by giving them his pitch: ‘You know what, we’re going to do it differently. We’re going to try to put you – and not product – at the centre of the proposition.’ That was his premise. Now, 17 years later, it has paid off. Stanhope has grown to become a giant in the field of wealth management boutiques, boasting assets under supervision (AuS) in excess of $24 billion – of which $16 billion are assets under management (AuM). The Portman Square headquartered firm has some 300 of the world’s wealthiest families and institutions on its books, with 140 staff and offices in six locations across Europe and the United States. Nearly half of the client assets and the US offices came with the ‘acquisition’ – Pinto’s word – of what has previously been reported as a ‘merger’ with the Forbes Family Trust at the end of 2020. Next Stanhope is eyeing expansion into

Asia, first with a big hire to its board and by bulking up in London. Then there’ll be boots on the ground ‘probably in China’ within five years, although ‘it could be sooner’. Pinto is ambitious: ‘We could double in less than a decade, I would hope,’ he chuckles. ‘Our trajectory is not just organic growth, which could be strong, but also acquisitions.’

And then what? Several times in our

conversation Pinto speculatively mentions the figure of ‘$100 billion’ in AuM. How soon would he like to get there, I ask? He doesn’t laugh this off. ‘I have no clue... I can tell you that there is every desire to do it as soon as possible,’ he says.

But Stanhope is not the only boutique to

have made in-roads into the world of wealth management over the last two decades. Perhaps 20 such firms, branding themselves as either private investment offices or multi- family offices have emerged since the late 1990s, each claiming to be more aligned to the needs of ultra-high-net-worth customers and to offer a higher level of bespoke service. In 1994, around the same time as Pinto

was sitting on family boards and noticing opportunities, Alex Scott was overseeing the sale of his fourth-generation-owned family business Provincial Insurance for £350 million. He too realised the value of a wealth adviser that could embrace open architecture. Unfortunately, there was a problem: the service was not yet readily available in the UK. ‘So,’ Scott tells Spear’s, ‘I looked around the world, saw what was happening in the States in the context of family offices, and thought: that will probably work here.’ He wasn’t wrong. In 1996 Scott created Sandaire, a private investment office, to serve the interests, initially, of his own family as well as a couple of thousand employee shareholders of Provincial. Over the

Daniel Pinto Stanhope Capital

“We could double in less than a decade, I would hope”

following 24 years the company grew to work for multiple families who would receive the same services as Scott’s own kin: the multi-family office was born. When it was sold to Schroders at the end of 2020, Sandaire was managing £2.2 billion in client assets. Meanwhile, the Fleming clan sold their family business, Robert Fleming & Co, to Chase Manhattan Bank for a whopping $7 billion in 2000. They then set up their own multi-family office, Fleming Family & Partners (FF&P). ‘In 2000, investment- focused family offices were really, really new things,’ recalls one veteran of FF&P’s early days. ‘Previously, family offices tended to be great landed estate offices relocated to London – they did everything from car insurance to walking the dogs.’ But FF&P was different. It focused on investing the massive family fortune – and it didn’t walk any dogs. In addition, almost immediately, it set about growing its client base beyond the Fleming family. The firm, since 2014 part of Stonehage Fleming, now has £13.7 billion in AuM. The turn of the millennium also saw the launch of Lord North Street, a private investment office co-founded by former lawyer and banker William Drake and Adam Wethered, the latter a 24-year veteran of JP Morgan who had run its private bank and institutional client business across Europe and the Middle East. When Wethered told the Financial Times that their ambition was to ‘make money for our clients’, the paper opined: ‘This may sound obvious but he contrasts it to “some of the more voracious institutions that will try to make money out of their clients as their first approach”.’ When it merged with Sandaire in 2014, Lord North Street was looking after an estimated £1 billion of client assets. Other firms came thick and fast. Among the most important remains Partners Capital, founded in 2001 by Stan Miranda, a former chairman of management consultant Bain & Company. Partners was set up to look after the private wealth of just 77 private equity professionals. Things moved on quickly and now it manages an astonishing $35 billion of client assets. Then came Capital Generation Partners, founded in 2003. First, ‘CapGen’ invested the wealth of the billionaire Saïd family whose self-made head, Wafic, had been a confidante of Margaret Thatcher and gave

Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100