Trust and transparency key to working with Russian clients
Building a trusting and transparent personal relationship with Russian private wealth clients is extremely important, especially since the onset of the 2008 crisis. To build this trust it is necessary to be based in Moscow.
Simon Fentham-Fletcher, Renaissance Asset Managers’ portfolio manager and chief of staff in Moscow, said: “Clients in Russia expect more now, more service and the ability to go and see them to discuss the latest Draghi comments. If you are in Geneva that is the next day at a minimum, with me it can be a matter of minutes.”
Fentham-Fletcher’s runs portfolios for private clients, from retail investors to ultra-high net worth individuals. He sees himself as an asset allocator in a fund-of-funds model, rather than a fund selector. Before moving to RAM he ran investment management portfolios and funds of hedge funds for private banking clients at Raiffeisen Bank in Moscow.
“When I moved, 50% of targeted clients followed me from Raiffeisen, because I took time to build a personal relationship with them. I have always said that quality is job one,” he said.
Keen to meet his clients’ high expectations, Fentham-Fletcher strives to bring better than average returns.
He never buys exchange traded funds. He said: “I do not wake up in the morning and say to myself ‘today I am going to be average. I want to be better and that is why I don’t invest in ETFs.”
He is a fan of a cautious approach and prefers to sit on cash when the going gets tough. His Cautious Managed fund added positive performance of 2.0% in July, despite holding some 16% on average in cash during this period. Year to date performance of the fund is also a positive 4.2%, while the benchmark is up 3.1%.
Daily liquidity is a key concern when choosing investment options for Russian clients, who were severely burned by the 2008 crisis.
Many lost 90% of their investments as the local stock market plummeted 72%. These losses were due in part to their high use of leverage, so funds using leverage are a big red flag.