Weatherbys launch new service

Private bank Weatherbys is today launching an investment management service run by Roddy Buchanan, former wealth management head at Ansbacher & Co.

The service, sitting alongside Weatherbys’ private banking and wealth planning units, will consist of four multi-manager portfolios investing in funds ranging from equities, bonds and cash to commercial property and commodities.

Each of the Weatherbys’ portfolios will invest in about 10 underlying onshore funds.

The service will be available only to Weatherbys own clients, though chief executive Roger Weatherby did not rule out opening it to a wider audience over time.

The four portfolios will sit at various points along the ‘efficient frontier’ posited by Harry Markowitz in his groundbreaking work of 1952 establishing portfolio theory.

They will aim to make returns of cash plus 2%, up to cash plus 5%, measured over a 10 year time span.

They will target this on volatility of 30%, 50%, 70% and 90% that of shares, as represented by the MSCI World index, hedged back in sterling terms.

Buchanan said: “People have been disappointed with cash rates, some appetite for risk has come back into the marketplace, and private bank clients have been asking what more their banks can you do for them.”

He said the funds would be run conservatively and invest in third party providers’ single strategy funds, and occasionally ETFs and multi-asset funds in cases where Weatherbys wants more exposure to specific asset classes.

“We will not be using complex products, but will use pure asset funds, with exposures tilted where appropriate by multi-asset funds,” Buchanan said. “We want products we can explain to our own clients, and that they can understand and recognize,” Buchanan said.

“In investing you win by not losing money and it is exactly the same when it comes to investing in fund managers, who avoid the bear drops. We will be keeping turnover in our portfolios to a minimum, allowing the turnover to happen at the fund level.”

Buchanan will only invest in managers that use derivatives as part of their strategy, if the manager does this to insure against losses.

He said Weatherbys’ clients have taken their risks through entrepreneurial activities – including on the track – and do not want to take further high risk with their finances.

Guernsey’s Asset Risk Consultants will assist Weatherbys for manager selection, monitoring performance, risk profiling and structuring portfolios.

Weatherbys began in 1770 as the holder and distributor of prize money for UK horseracing – a role it still plays.

In 1994 it registered with the FSA as a bank, and began private banking in 2006. More than half Britain’s 20,000 horse owners use it, though over half of its new private banking business now comes from outside the racing fraternity.

Clients need net worth of at least £3m or incomes exceeding £300,000 to access its full private banking service, but the investment management proposition is available for those with £250,000.

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