Stonehage Fleming's flagship fund passes USD1 billion mark
Assets under Management (“AUM”) for the Stonehage Fleming Global Best Ideas Equity Fund (“the Fund”) have passed the USD1bn mark.
Since launching in August 2013, the USD1.03bn Fund has attracted assets from private, professional and institutional investors and has returned 66.7%* over the last five years, compared to the Global Equity peer group average of 30.0 %** and the comparative index return of 40.0%*** (US $ terms).
Fund Manager Gerrit Smit manages a concentrated, high conviction portfolio of 27 high quality businesses that are chosen for their sustainable growth potential, strong management team, strategic competitive edge and value.
Current investments include some of the world’s best-known companies such as Visa, PayPal, Alphabet, Nike, Amazon, Microsoft and Estée Lauder. Technology names now make up 25.5%**** of the Fund, a reflection of the manager’s view that the technology sector will remain a dominant feature of daily life and business in general. It also has a high health care exposure.
Gerrit Smit argues that: “The technology sectors’ contribution towards growing productivity, providing key information to businesses and individuals alike and creating new business opportunities seems to be ever increasing. Many technology businesses are currently benefiting from wide adoption, high business demand, general high profitability, strong cash flow generation and strong balance sheets. Some large technology businesses have become good growing dividend payers, which further supports capital growth. Investors can therefore also consider some of these businesses from an income perspective.”
Commenting on the current market environment, Smit adds: “The combination of stable and constructive leading US economic indicators, continuing moderate economic expansion and earnings growth, low inflation expectations, only moderate interest rate rises and fair valuations has created a proverbial ‘Goldilocks’ investment environment. This ‘dull but constructive’ environment leads to more certainty and lower economic volatility and is more attractive to more investors. Whilst expectations for the level of economic expansion have recently been tempered, the outlook for continuing earnings growth remains on course for quality businesses.”
The Fund had previously been available exclusively to clients of Stonehage Fleming, but has been open to outside investors since 2016. It is now available on eleven platforms across South Africa and the UK.
* Source: Stonehage Fleming Investment Management Ltd (SFIM), for period 1 May 2014 to 30 April 2019 (Class B).
**IA Global $, for period 1 May 2014 to 30 April 2019. Source: Financial Express.
***MSCI World All Country $ TR, for period 1 May 2014 to 30 April 2019. Source: Bloomberg, MSCI.
****Source: Stonehage Fleming Investment Management Ltd (SFIM), to 30 April 2019.
Should you invest in Uber?
Gerrit Smit, Head of Equity Management, believes it is worth comparing Uber’s financial fundamentals with those of some of the more established tech stocks.
The first-gen wealth creators who struggle to talk to their kids about money
Every culture has its own version, but in Britain the saying goes: from shirtsleeves to shirtsleeves in three generations. The anecdote about how family money can easily disappear is particularly poignant for entrepreneurs trying to navigate whether, or how, to pass along their wealth to their children.
Compared to the institutionally wealthy, who may see themselves as custodians of family wealth, entrepreneurs or first-generation wealth creators can have a more difficult time talking to the next generation about money.
Stonehage Fleming appoints Business Development Officer
Stonehage Fleming, one of the world’s leading independently owned family offices, announces the appointment of Julie Gauthier as Business Development Officer in Switzerland.
Julie will report to Johan Van Niekerk, Head of Family Office (Neuchatel) and will be a member of the Business Development team, working between all three of Stonehage Fleming’s Swiss offices. She will be responsible for the development and management of relationships with potential clients and introducers of business.
Julie’s role is newly created and effective immediately.
With ten years’ wealth planning and financial service experience, Julie joins Stonehage Fleming from Geneva Management Group (“GMG”), where she was Vice President of Business Development. At GMG she was responsible for client base expansion and new business acquisitions across the globe. During her previous role as Sales Manager, Julie also advised GMG clients on succession planning and asset protection through life insurance structures.
Commenting on the appointment, Johan Van Niekerk said: “We are very pleased to welcome Julie as our newly appointed Business Development Officer. Julie has an impressive career and extensive experience in the development of sales and new business acquisitions.” “Her appointment demonstrates our commitment to further growing and building the business as we continue to strive to lead the industry as a truly international family office.”
Julie Gauthier said: “I am thrilled to join Stonehage Fleming’s Business Development team at such an exciting time in the Group’s development. I look forward to further expanding the Group’s business and client base to widen their integrated expertise further across the globe.”
Stonehage Fleming's flagship fund passes USD1 billion mark
Assets under Management (“AUM”) for the Stonehage Fleming Global Best Ideas Equity Fund (“the Fund”) have passed the USD1bn mark.
Since launching in August 2013, the USD1.03bn Fund has attracted assets from private, professional and institutional investors and has returned 66.7%* over the last five years, compared to the Global Equity peer group average of 30.0 %** and the comparative index return of 40.0%*** (US $ terms).
Fund Manager Gerrit Smit manages a concentrated, high conviction portfolio of 27 high quality businesses that are chosen for their sustainable growth potential, strong management team, strategic competitive edge and value.
Current investments include some of the world’s best-known companies such as Visa, PayPal, Alphabet, Nike, Amazon, Microsoft and Estée Lauder. Technology names now make up 25.5%**** of the Fund, a reflection of the manager’s view that the technology sector will remain a dominant feature of daily life and business in general. It also has a high health care exposure.
Gerrit Smit argues that: “The technology sectors’ contribution towards growing productivity, providing key information to businesses and individuals alike and creating new business opportunities seems to be ever increasing. Many technology businesses are currently benefiting from wide adoption, high business demand, general high profitability, strong cash flow generation and strong balance sheets. Some large technology businesses have become good growing dividend payers, which further supports capital growth. Investors can therefore also consider some of these businesses from an income perspective.”
Commenting on the current market environment, Smit adds: “The combination of stable and constructive leading US economic indicators, continuing moderate economic expansion and earnings growth, low inflation expectations, only moderate interest rate rises and fair valuations has created a proverbial ‘Goldilocks’ investment environment. This ‘dull but constructive’ environment leads to more certainty and lower economic volatility and is more attractive to more investors. Whilst expectations for the level of economic expansion have recently been tempered, the outlook for continuing earnings growth remains on course for quality businesses.”
The Fund had previously been available exclusively to clients of Stonehage Fleming, but has been open to outside investors since 2016. It is now available on eleven platforms across South Africa and the UK.
* Source: Stonehage Fleming Investment Management Ltd (SFIM), for period 1 May 2014 to 30 April 2019 (Class B).
**IA Global $, for period 1 May 2014 to 30 April 2019. Source: Financial Express.
***MSCI World All Country $ TR, for period 1 May 2014 to 30 April 2019. Source: Bloomberg, MSCI.
****Source: Stonehage Fleming Investment Management Ltd (SFIM), to 30 April 2019.
Should you invest in Uber?
Gerrit Smit, Head of Equity Management, believes it is worth comparing Uber’s financial fundamentals with those of some of the more established tech stocks.
The first-gen wealth creators who struggle to talk to their kids about money
Every culture has its own version, but in Britain the saying goes: from shirtsleeves to shirtsleeves in three generations. The anecdote about how family money can easily disappear is particularly poignant for entrepreneurs trying to navigate whether, or how, to pass along their wealth to their children.
Compared to the institutionally wealthy, who may see themselves as custodians of family wealth, entrepreneurs or first-generation wealth creators can have a more difficult time talking to the next generation about money.
Stonehage Fleming appoints Business Development Officer
Stonehage Fleming, one of the world’s leading independently owned family offices, announces the appointment of Julie Gauthier as Business Development Officer in Switzerland.
Julie will report to Johan Van Niekerk, Head of Family Office (Neuchatel) and will be a member of the Business Development team, working between all three of Stonehage Fleming’s Swiss offices. She will be responsible for the development and management of relationships with potential clients and introducers of business.
Julie’s role is newly created and effective immediately.
With ten years’ wealth planning and financial service experience, Julie joins Stonehage Fleming from Geneva Management Group (“GMG”), where she was Vice President of Business Development. At GMG she was responsible for client base expansion and new business acquisitions across the globe. During her previous role as Sales Manager, Julie also advised GMG clients on succession planning and asset protection through life insurance structures.
Commenting on the appointment, Johan Van Niekerk said: “We are very pleased to welcome Julie as our newly appointed Business Development Officer. Julie has an impressive career and extensive experience in the development of sales and new business acquisitions.” “Her appointment demonstrates our commitment to further growing and building the business as we continue to strive to lead the industry as a truly international family office.”
Julie Gauthier said: “I am thrilled to join Stonehage Fleming’s Business Development team at such an exciting time in the Group’s development. I look forward to further expanding the Group’s business and client base to widen their integrated expertise further across the globe.”
Balancing investment return with social responsibility
The results of the latest research report compiled by international family office Stonehage Fleming have revealed a gap between the mind-set and implementation of responsible investing. The Four Pillars of Capital Report: The Next Chapter showed that while over 75% of ultra-high net worth families acknowledged a preference for responsible investment, only 21% are actively incorporating a values-based approach in investment portfolios.
This contrast is likely attributed to a confusion about the wide range of SRI (Socially Responsible Investment) products on offer by asset managers, says Reyneke Van Wyk, Head of Stonehage Flemings’ Investment Division in South Africa. While respondents demonstrated an increasing interest in SRI, which aims to generate specific social or environmental benefits in addition to financial returns, they also confessed that on a practical level it was not as easy in the traditional investment world to do ‘good’ while also generating benchmark-beating returns for investors.
“Historically, investors have primarily been concerned with the end rather than the means, putting portfolio performance as the primary focus,” said Van Wyk. “However, as was highlighted in our Four Pillars of Capital report, this attitude is changing. For many families and private investors, the gap between investor and investment is closing.”
Considering the variety of socially responsible investing philosophies open to todays’ investors, Stonehage Fleming believes that Environmental, Social and Governance (ESG) investing marries well with a traditional investment management approach and with the long-term investing approach of UHNW* families.
PBI Germany Awards winners announced
Private Banker International’s Germany Awards were announced on Tuesday at a ceremony in Frankfurt. Stonehage Fleming were delighted to win Outstanding Family Office Proposition in Germany.
These awards are an extension of the well established Private Banker International Global Awards that took place in Singapore last year. These awards are designed to identify leading institutions that are setting new standards in private banking and wealth management in Germany. The shortlist of finalists underwent a rigorous selection process and our independent judging panel chose the awards winners.
What Happens When Billionaires' Children Inherit
It is not always about beautiful homes, lush holidays, and expensive educations. When sons and daughters of wealthy families inherit their entitled fortunes, there are often dramatic side effects. And this is causing many-a-billionaire to re-think what they leave behind.
The Real Rich Kids Imagine being given everything you could ever want from a young age. The best education, holidays and homes, then told you never really need to work because your family has more than enough money. A dreamy scenario for some. But there is normally a side effect: wealth robs children of motivation. The more money that is given to children from a young age, the less passion and motivation they have, say wealth advisors. “I’ve worked with next-generation family members who say ‘why go to university, what’s the point?
No one’s going to be impressed with what I do, because my entrepreneurial parents have nailed life,’” says Lucy Birtwistle, a relationship manager at Stonehage Fleming, a multi-family office. Her work often involves meeting with these disenfranchised children and trying to find their purpose and vision. “Each individual needs a purpose, a reason to get up in the morning”.
Balancing investment return with social responsibility
The results of the latest research report compiled by international family office Stonehage Fleming have revealed a gap between the mind-set and implementation of responsible investing. The Four Pillars of Capital Report: The Next Chapter showed that while over 75% of ultra-high net worth families acknowledged a preference for responsible investment, only 21% are actively incorporating a values-based approach in investment portfolios.
This contrast is likely attributed to a confusion about the wide range of SRI (Socially Responsible Investment) products on offer by asset managers, says Reyneke Van Wyk, Head of Stonehage Flemings’ Investment Division in South Africa. While respondents demonstrated an increasing interest in SRI, which aims to generate specific social or environmental benefits in addition to financial returns, they also confessed that on a practical level it was not as easy in the traditional investment world to do ‘good’ while also generating benchmark-beating returns for investors.
“Historically, investors have primarily been concerned with the end rather than the means, putting portfolio performance as the primary focus,” said Van Wyk. “However, as was highlighted in our Four Pillars of Capital report, this attitude is changing. For many families and private investors, the gap between investor and investment is closing.”
Considering the variety of socially responsible investing philosophies open to todays’ investors, Stonehage Fleming believes that Environmental, Social and Governance (ESG) investing marries well with a traditional investment management approach and with the long-term investing approach of UHNW* families.
PBI Germany Awards winners announced
Private Banker International’s Germany Awards were announced on Tuesday at a ceremony in Frankfurt. Stonehage Fleming were delighted to win Outstanding Family Office Proposition in Germany.
These awards are an extension of the well established Private Banker International Global Awards that took place in Singapore last year. These awards are designed to identify leading institutions that are setting new standards in private banking and wealth management in Germany. The shortlist of finalists underwent a rigorous selection process and our independent judging panel chose the awards winners.
What Happens When Billionaires' Children Inherit
It is not always about beautiful homes, lush holidays, and expensive educations. When sons and daughters of wealthy families inherit their entitled fortunes, there are often dramatic side effects. And this is causing many-a-billionaire to re-think what they leave behind.
The Real Rich Kids Imagine being given everything you could ever want from a young age. The best education, holidays and homes, then told you never really need to work because your family has more than enough money. A dreamy scenario for some. But there is normally a side effect: wealth robs children of motivation. The more money that is given to children from a young age, the less passion and motivation they have, say wealth advisors. “I’ve worked with next-generation family members who say ‘why go to university, what’s the point?
No one’s going to be impressed with what I do, because my entrepreneurial parents have nailed life,’” says Lucy Birtwistle, a relationship manager at Stonehage Fleming, a multi-family office. Her work often involves meeting with these disenfranchised children and trying to find their purpose and vision. “Each individual needs a purpose, a reason to get up in the morning”.
Fears of an imminent US recession are premature
Recently, the news has been littered with headlines about an inverted yield curve, long seen as a strong indicator of oncoming economic recession in the United States.
The headlines were prompted specifically by the inversion of the 3-month/10-year yield curve. It seems to be too early, on a fundamental basis, to have grave concerns about an imminent US recession, though.
In fact, the 3-month/10-year yield curve only inverted for a few days before returning to a positive reading.
Added to this, a 3-month yield is an unnaturally short maturity to consider in the context of a potential US recession. Historically this curve provided the market with an early warning of, on average, 22-months. That would imply a predicted recession in the first quarter of 2021, if the curve were to invert from here on a sustainable basis, which it shows no signs of doing yet. This does not raise the immediate alarm bells the financial press would have us hear.
UHNW Families go cool on traditional leadership
A survey of wealthy families shows that far more of them would like to choose another way of picking a member who can lead its affairs rather than under the old system of giving the reins to a first-born son.
The traditional primogeniture system is still used by many families particularly as it does at least set out a rule to be followed, possibly removing the need for acrimonious argument. However, many families prefer to adopt a different process, according to a study by Stonehage Fleming, the UK-based multi-family office.
Stonehage Fleming appoints Group Chief Financial Officer
Stonehage Fleming, one of the world’s leading independently owned family offices, announces the appointment of Becton Davis as Group Chief Financial Officer.
With over 20 years’ banking and financial services experience, including 17 years in asset and wealth management, Becton joins Stonehage Fleming from Close Brothers Asset Management (“CBAM”), where he has served as Chief Financial Officer for the past seven years.
Becton’s role is newly created and effective immediately. He is based in Stonehage Fleming’s London office and reports to David Fletcher, Group Finance Director.
The news follows the promotion of Kate Munday from UK Chief Operating Officer to Group Head of HR, which came into effect in November 2018. Having worked in across investment, client servicing and operational departments and IT, Kate has an unparalleled breadth of experience that will serve the Group well in its future growth ambitions. Kate continues to be based in the London office.
Commenting on the appointment, David Fletcher said: “We are very pleased to welcome Becton to this newly created role. He has shown himself to a be an effective CFO with an impressive track record in driving performance to deliver expanding growth. His experience and industry knowledge will help support us as we enter the next phase of the Group’s development and strive to lead the industry as a truly international office.”
Becton Davis said: “It gives me great pleasure to take on this role at such an exciting time in Stonehage Fleming’s journey. I am looking forward to working with my new colleagues to help the Group achieve its financial and strategic objectives.”
The biggest risks facing your high net worth clients
“If you ask high net worth families what the real risks to their wealth might be, they tend to say political or economic risk, but what’s transpired is that the greatest destructor of family wealth is the generational transfer of wealth. The largest proponents of this by far are family dynamics and poor communication,” explains Johan van Zyl, CEO of Stonehage Fleming. “We always start a conversation with clients about the purpose of their family wealth. Some battle with that, but it changes how they manage money.”
Fears of an imminent US recession are premature
Recently, the news has been littered with headlines about an inverted yield curve, long seen as a strong indicator of oncoming economic recession in the United States.
The headlines were prompted specifically by the inversion of the 3-month/10-year yield curve. It seems to be too early, on a fundamental basis, to have grave concerns about an imminent US recession, though.
In fact, the 3-month/10-year yield curve only inverted for a few days before returning to a positive reading.
Added to this, a 3-month yield is an unnaturally short maturity to consider in the context of a potential US recession. Historically this curve provided the market with an early warning of, on average, 22-months. That would imply a predicted recession in the first quarter of 2021, if the curve were to invert from here on a sustainable basis, which it shows no signs of doing yet. This does not raise the immediate alarm bells the financial press would have us hear.
UHNW Families go cool on traditional leadership
A survey of wealthy families shows that far more of them would like to choose another way of picking a member who can lead its affairs rather than under the old system of giving the reins to a first-born son.
The traditional primogeniture system is still used by many families particularly as it does at least set out a rule to be followed, possibly removing the need for acrimonious argument. However, many families prefer to adopt a different process, according to a study by Stonehage Fleming, the UK-based multi-family office.
Stonehage Fleming appoints Group Chief Financial Officer
Stonehage Fleming, one of the world’s leading independently owned family offices, announces the appointment of Becton Davis as Group Chief Financial Officer.
With over 20 years’ banking and financial services experience, including 17 years in asset and wealth management, Becton joins Stonehage Fleming from Close Brothers Asset Management (“CBAM”), where he has served as Chief Financial Officer for the past seven years.
Becton’s role is newly created and effective immediately. He is based in Stonehage Fleming’s London office and reports to David Fletcher, Group Finance Director.
The news follows the promotion of Kate Munday from UK Chief Operating Officer to Group Head of HR, which came into effect in November 2018. Having worked in across investment, client servicing and operational departments and IT, Kate has an unparalleled breadth of experience that will serve the Group well in its future growth ambitions. Kate continues to be based in the London office.
Commenting on the appointment, David Fletcher said: “We are very pleased to welcome Becton to this newly created role. He has shown himself to a be an effective CFO with an impressive track record in driving performance to deliver expanding growth. His experience and industry knowledge will help support us as we enter the next phase of the Group’s development and strive to lead the industry as a truly international office.”
Becton Davis said: “It gives me great pleasure to take on this role at such an exciting time in Stonehage Fleming’s journey. I am looking forward to working with my new colleagues to help the Group achieve its financial and strategic objectives.”
The biggest risks facing your high net worth clients
“If you ask high net worth families what the real risks to their wealth might be, they tend to say political or economic risk, but what’s transpired is that the greatest destructor of family wealth is the generational transfer of wealth. The largest proponents of this by far are family dynamics and poor communication,” explains Johan van Zyl, CEO of Stonehage Fleming. “We always start a conversation with clients about the purpose of their family wealth. Some battle with that, but it changes how they manage money.”