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his name to Oxford University’s business school. Quickly founders Khaled Saïd, Ian Barnard and Charlotte Thorne made CapGen a commercial proposition by opening it up to other families in 2007. Today that firm manages some $3 billion for 22 clients. Collectively the above firms – plus a few
more I’ll mention later on – now manage in the region of $80 billion, mainly for ultra- high-net-worth individuals, but also institutions. Compared with the AuMs of the wealth-management arms of UBS ($2.6 trillion) or Goldman Sachs ($558 billion) this is a drop in the ocean. But what a drop it is, and as every plumber knows – where’s there’s a drop, the flood awaits.
S
tanhope Capital began, recalls Daniel Pinto, ‘very much as the anti-private bank’. ‘That was the vision initially.
Everything you dislike about private banks... we tried to do the opposite.’ That meant that as well as not having
products to sell, Stanhope insisted on an ‘alignment of interest’ between staff and clients. To this day the firm’s 18 partners are obliged to invest the majority of their liquid net worth in Stanhope portfolios alongside clients. ‘It doesn’t guarantee per se that we always make the right decisions,’ he says, ‘because you can make mistakes even when you invest your own money, but it puts the discussions with clients at a very different level. We are in it together.’ The third founding principle of the firm was that it should take a holistic approach to wealth management – breaking free of the ‘silo’ culture Pinto saw in banking – to bring greater opportunities for wealth creation, not simply preservation, to clients. Julien Sevaux, who co-founded Stanhope alongside Pinto, left the firm in 2017 and set up his own private investment office, Eighteen48 Partners, with two other ex- Stanhope partners Tarek AbuZayyad and Edward Clive in 2019. Sevaux describes the launch of Stanhope, named after the Mayfair street where the office was based, as part of ‘stage one’ in the development of London’s ecosystem of wealth management boutiques. The firm was set up ‘to be kind of an alternative to the banks in wealth management’, he recalls. ‘That coincided with significant wealth creation and a more
Alex Scott Sandaire
“I saw what was happening in the States and thought: that will probably work here”
professional approach [by] families and entrepreneurs to managing their own wealth.’ In other words, it came at a time when owners of private capital were becoming more sophisticated and realising that they could benefit from a much more bespoke service altogether. Max Thowless-Reeves, an ex-UBS banker and founding partner of boutique private investment office Sorbus Partners, sees the emergence of the boutiques as part of a broader shift in the business of money. ‘The finance industry goes through waves of aggregation and disaggregation,’ says Thowless-Reeves, who set up Sorbus in 2012 in Staffordshire. He compares the rise of boutiques to the appearance of hedge funds in the Nineties – or as he puts it, ‘basically “prop trading” [proprietary trading] desks of the banks that wanted access to greater freedoms: less control, more money’. ‘The talent leaves because they don’t need the restrictions; they can do that work separately and actually have better relationships with small numbers of clients.’ But he believes the banks haven’t helped themselves either: ‘The boom you’ve seen in private investment offices is again because of that sort of funnelling of clients towards big private banks. The big private banks have essentially been unable to prevent themselves from behaving in a way which maximises their own interests above that of the client.’
Another of the younger firms in the boutique field, Lincoln Private Investment Office, was founded in London in 2014 by
Ross Elder, whose career has included stints at James Capel and Berenberg Bank. Elder says Lincoln ‘absolutely tried to emulate’ the trio of Partners Capital, Stanhope Capital and Lord North Street as firms, but adds firms like his have moved the sector forward ‘in terms of transparency and alignment’. He sees his firm’s model, the ‘private
investment office’, as an evolution of what has gone before. ‘So taking the best of those business models, but genuinely treating the clients as individuals, building things individually for them, having structure that’s properly aligned, not having huge numbers of external shareholders looking for their own returns, and actually focusing on clients, delivering investment performance and being much more nimble, dynamic and sophisticated.’ While Elder says the term ‘private investment office’ (PIO) was first used at Lord North Street, he insists that Lincoln is the first firm to use it in its name. What differentiates these self-styled PIOs from the cohort of independents that went before them seems to be more of a hair-shirt attitude to scale and commercialism. This is something that puts them on a different trajectory to the likes of Stanhope or Partners. ‘I don’t think they should be built for scale,’ says Elder. ‘We’ve no interest in being the biggest – we’ve absolute interest in
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