Business Investment Relief (‘BIR’) was introduced following the financial crisis to promote investment in the UK and to encourage UK resident non-domiciled individuals to invest overseas income and gains.
BIR allows UK Resident non-domiciliaries, to bring non-UK source income and gains into the UK without a UK tax charge. In addition, there is nothing to prevent UK-taxpaying investors claiming other reliefs, such as those available under the Enterprise Investment Scheme (EIS).
Any investments made within the UK, with overseas income or gains and by a non-domiciled resident, must be carefully considered and planned, otherwise investors could unintentionally become liable for UK tax. EIS-qualifying companies may be a good place for non-domiciliaries to initially look when considering BIR opportunities, as the qualifying criteria for EIS companies is more stringent than those for BIR; meaning investors can be more confident that their investments are sound.
Some simple rules for BIR qualification are that the Company must be a private limited company which is carrying out a commercial trade, and the investment must be made within 45 days of the offshore income and/or gains being brought into the UK.
BIR investments can be in the form of shares or loans. However, we are looking at the compatibility with EIS and it should, therefore, be noted that it is a requirement that investors are owners of an EIS-qualifying company’s shares; with loans not an option.
EIS is one of the most tax-advantaged government schemes in the world, with opportunities to mitigate income tax, capital gains tax and inheritance tax; designed to support growth-focused, early-stage and unquoted companies to raise funding they may have otherwise struggled to attract due to their early stage and therefore higher risk status.
Investors may claim up to 30% income tax relief, up to a maximum individual investment of £2m per tax year, subject to at least £1m being invested in Knowledge Intensive Companies.
Carry Back also allows income tax relief claims to be made such that an investment is treated for income tax relief purposes as having been made in the previous tax year, meaning income tax relief can be offset against the previous tax year as well as the current tax year.
Capital Gains Tax, of unlimited gains on the sale of any assets, may also be deferred if an EIS investment is made within one year before or three years after the date of the disposal of the assets which give rise to a gain. It is important to also consider that there is no capital gains tax on the disposal of shares which have been held for at least three years in companies which are EIS-qualifying.
In addition to the significant income tax and capital gains tax incentives, EIS companies also benefit from 100% Inheritance Tax exemption, through the availability of Business Relief after EIS qualifying investment has been held for at least two years and remains held on death.
Further to all of the above incentives, EIS holdings also benefit from Share Loss Relief, which could provide total tax relief of up to 61.5%, including income tax relief, for a 45% tax payer.
Importantly, investment must be held for a minimum of three-years to qualify for EIS reliefs but as the underlying companies are unquoted stocks, the holding period may be significantly longer until an appropriate investor exit is achieved; usually via a trade sale or IPO.
BIR, and importantly EIS-qualifying companies, offers UK resident non-dom individuals the unique opportunity to access highly innovative and growth-focused UK companies at an early stage in their growth cycle. With an increasingly tech-focused world, the UK is widely regarded as one of the great places to start a tech business. Indeed, according to the Tech Nation Report 2021, the level of venture capital investment in UK tech companies in 2020 was third in the world behind only the United States and China, with over twice the level of investment than Germany and almost three-times that of France.
As the UK Prime Minister, the Rt Hon. Boris Johnson MP, stated in his foreword in the Tech Nation Report 2021:
“2020 saw UK companies attract more than twice as much VC funding as our nearest European competitor. London alone benefited from more investment than the next three leading cities put together.”
“Unicorns now roam the streets of cities across England, Scotland and Wales. This isn’t just great news for the entrepreneurs and thinkers and do-ers who make the British tech industry what it is. As the sector grows and grows it contributes more and more to our economy, a silicon supercharge that benefits us all.”
Investing in early-stage UK companies is hot property and for UK resident non-doms, there are significant opportunities to join this growth story whilst doing so in a highly tax efficient manner.
Deepbridge is a multi-award winning EIS Manager with over £200m of funds deployed into early-stage and growth-focused companies in the UK.
In March 2020, the world ground to a halt as a result of the coronavirus pandemic. Whilst we’re still feeling its effects more than a year later across almost all sectors, tourism and hospitality have perhaps been more affected than most.
We still talk in terms of ‘getting back to normal’, but is that really going to happen? For the travel sector, at least, I don’t think so.
Some pre-existing trends have accelerated as a result of the pandemic and some new ones have emerged. Opportunities for both domestic and international travel will return as restrictions ease, but the sector will be forever changed.
The shifts in demand that we’ve seen over the past year will not only alter the products and services offered by the industry, but also the economics of the travel sector. This will create opportunities for savvy investors.
What luxury travel trends are emerging as a result of the pandemic?
Covid has sent a gradual trend towards lower-volume, higher-spend tourism into overdrive, and we don’t think it is going to reverse entirely when the pandemic is over.
Time with family has become more precious than ever after more than a year of enforced separation[i]. We see people wanting to travel in their own bubble and stay in their own, segregated space. This is playing out in increased demand for single-household self-catering properties and smaller boutique hotels, to the detriment of larger chains and hostels with communal facilities.
A desire for ‘slow travel’ is emerging. People who would ordinarily try to cover as much ground as possible in a trip – perhaps moving to a new location every single night – now want to slow down the pace and find themselves a base for multiple days at a time. After a period of so much uncertainty, the value of familiarity has increased, which is good news for providers as it increases the likelihood of repeat business.
Flexibility is the number one request by post-covid luxury travellers. Having seen how quickly things can change, they want to know they will not lose out if circumstances outside their control prevent them from travelling. Providers of accommodation and transport have had to keep pace with this in order to make any bookings at all, often taking on a great deal of risk themselves in order to offer travellers the flexibility they crave. Non-refundable deposits, advance prepayments, and lengthy lock-ins appear to be a thing of the past. It will be interesting to see if travellers will allow providers to revert to type once the pandemic is over – we suspect not. This could be challenging for smaller operators whose minimal cash reserves mean that late-notice cancellations and refunds hit hard. The counterpoint is that demand for the very best places is higher than ever, so travellers may find themselves having to pay a premium or accept inferior conditions to secure the location or accommodation they want.
Coming from a financial services background and being familiar with a heavily regulated environment, navigating the requirements of the Package Travel Regulations and putting in place financial protection for clients’ bookings was non-negotiable when setting up my business. It’s paying dividends now as clients increasingly look for reassurance, membership of an industry group (such as ABTA or ABTOT) and the peace of mind they gain from regulatory protections.
Travel and hospitality businesses have had to get used to doing things very differently in the last year. In times when face-to-face contact was considered dangerous, luxury hotels – for example – had to make a normally high-touch service work with as little human interaction as possible. Those who invested in technology were able to automate their processes and provide a slicker customer experience, allowing them to stay open for longer[ii].
Despite the lack of physical contact, travellers still value a human touch in the planning and booking process[iii]. They want access to knowledge that others may not have from an experienced person who will listen to their preferences and provide recommendations.[iv]. This puts tour operators in a great position – their expertise is now not only valuable in helping someone have a great holiday, but potentially also in keeping them and their family safe[v]. The stakes couldn’t be higher.
In summary, post-covid luxury travellers are holidaying in smaller groups with space of their own, and they’re demanding a more personalised, flexible and protected booking process which they don’t mind paying for. The net effect is a move up market. For destinations like Scotland, this has accelerated a shift that was already underway, but the pandemic has propelled it forwards much more quickly than expected.
‘Staycation’ boom – the good, the bad and the solution
Driven by concerns about flying, fear of crowds in airports, and nervousness over fast-changing regulations at home and abroad, demand for domestic travel has increased enormously since early 2020, with a boom in ‘staycations’ widely reported in the UK. This has exacerbated already extant tensions between communities resident in popular tourist destinations and the tourists who flocked to them as soon as restrictions were lifted. Locals who had been shielding since March reported being afraid to go out due to the crowds. Rubbish bins overflowed, a lack of public toilets had predictable results, and narrow roads were blocked by inconsiderate parking. Infrastructure that barely coped in a normal year was overwhelmed, especially in some of the UK’s most remote locations.
Responsible tourism is the answer to these challenges – it’s not only the right thing to do for the environment and local communities, but travellers are increasingly likely to demand it[vi]. As a tour operator, we can help by spreading demand, marketing less-visited hidden gems and stretching the season to include the shoulder months of March, April, October and November.
I made the conscious decision when setting up The Tartan Road that we would not actively market the main tourist hotspots in Scotland during the summer, and in some cases we would actively discourage travel and offer alternatives if we felt this would be in the best interests of the client and/or the local community. The Isle of Skye, Scottish Highlands and NC500 route are justifiably very popular, but there are equally lovely – and much less busy – areas of Scotland to discover during the peak summer months. An escape is no longer an escape if thousands of people flock to the same spot at the same time!
Our efforts this year are focused on Dumfries & Galloway in the south west of Scotland – easily accessible from England by car and packed with history, outdoor activities and beautiful scenery, including some of the best (and emptiest!) beaches in the country. The north-east coast is another gem, from Inverness and the Moray Firth round to Aberdeenshire and Angus, and inland to the Cairngorms National Park. These areas are just as stunning as the west coast and western Highlands, but likely to be far less busy in the summer.
We feel it’s our job – as responsible business owners and travel organisers – to help prospective visitors find out about places they may not have considered. If it works, there will be less overcrowding in the key hotspots, much-needed business for quieter areas, and travellers will get the escape they crave. Everybody wins.
What does this mean for investors?
If the trends discussed above play out as expected, firms focusing on luxury, small group and single-household trips are likely to perform better than those catering to larger groups or budget and mass-market tourism.
Travel and leisure companies whose stocks have traditionally performed well may have to invest heavily in order to navigate the new normal, which is putting some investors off. That said, stocks in this sector already took a significant tumble in January this year[vii], so they may still represent good value if you expect demand to bounce back over the longer-term.
Opportunities are emerging for shrewd investors to acquire shares in struggling boutique hotels, B&Bs and other tourism and hospitality businesses with the aim of turning them around and benefitting from the expected recovery. We are seeing new structures emerging here in Scotland: new funds focused solely on distressed hospitality and tourism ventures, and innovative management models with equity-based rewards replacing the usual cash retainers.
What we expect this summer
It seems clear now that travel between the UK and overseas destinations will resume in some form during the course of 2021. Having initially refused to give much clarity at all, the UK government has recently been speaking more positively about the prospect of foreign holidays this year[viii].
The bigger question is whether travellers will be put off by the level of complexity, the necessary testing and isolation requirements and the potential for rules to change quickly and leave people stranded. At what point does the reward of going on an overseas holiday no longer justify the level of risk and effort? Thresholds may be different for each individual, but there will be a limit beyond which demand is just not there.
Regardless of the exact rules that emerge, we expect to see fewer people than normal heading overseas this year, and more holidaying domestically as a result. Some of this demand is likely to persist even as unrestricted overseas travel resumes.
What can Scotland offer travellers?
From outdoor adventures, unspoilt landscapes, incredible wildlife and dramatic scenery to vibrant cities, world-class food and drink, art, culture and history, there’s a real quality and breadth to what Scotland can offer visitors.
Here are some of the most fun trips we’ve recently put together for our clients:
A self-drive trip for a history enthusiast taking in some of the most beautiful and scenic areas of Scotland. Castle visits and historic tours every day and stays in a castle hotel every night, including the fabulous 5* Fonab Castle Hotel in Pitlochry.
A chauffeur-driven whisky extravaganza taking in the isles of Arran, Islay and Jura and the cult whisky capital of Campbeltown on the Kintyre peninsula. 14 distilleries in 8 days to celebrate a 40th birthday.
A week-long family adventure – playing on the beach, exploring the place that inspired JM Barrie’s Peter Pan, hunting for fairies, trekking with alpacas, water sports, fishing, farm animals, guided cycling and a private falconry show.
A mother-and-daughter gin itinerary, including distillery visits, learning about botanicals, and distilling their own spirit at ‘gin school’ and a cookery class making cocktail-based desserts.
A whistle-stop tour of some of the most remote islands in Scotland, using helicopter transfers to bring these normally inaccessible locations within reach for a trip lasting just a few days.
A long-stay family holiday with pre-arranged activities each day, including fishing, foraging, photography, horse riding and 4×4 off-roading, based at the spectacular Fife Arms in Braemar.
Availability is fast becoming the number one challenge for travellers to Scotland this summer. A perfect storm has occurred, with 2020 bookings rolling over and combining with extremely high demand for the 2021 season. The Three Chimneys on the Isle of Skye and the Torridon in Wester Ross – just two examples of the country’s popular and remote high-end boutique hotels – have already completely sold out for the summer months and well into October.
The indecisive may therefore find themselves having to wait until 2022 for their Scottish adventure, but we’re absolutely sure it will be worth it!
The Tartan Road is a bespoke luxury tour operator specialising in single-vehicle, single-household trips in Scotland. Drawing on local knowledge and a select network of excellent suppliers, we put together tailored packages combining accommodation, transport, activities and experiences built around the traveller’s unique needs and preferences. Find out more at www.tartanroad.co.uk
Role at Hottinger: Group Board Member & Managing Director of Hottinger Investment Management
About my role: As Managing Director of Hottinger Investment Management, my role is to oversee the strategies and investment processes we use to invest our clients’ money. I’m also the compliance officer for the entity, so under the Senior Managers’ Regime (SMCR) I’m responsible for ensuring that the staff in my team are competent for their roles.
Career & education so far: When I left school in the ‘80s, there were 3-4 million people unemployed in the UK. I sent out 68 letters looking for work and got just three replies, which resulted in one interview with a bank in London. I’d always said I’d never get the train into London to work for a bank, but that’s what I did. I decided to continue my education in a professional environment rather than going to university, so I took my banking exams whilst working.
Originally I worked in retail banking, but I found international banking much more exciting, so I moved to join the Royal Bank of Canada doing settlements. I then joined Julius Baer in London for 17 years and moved into their private banking division. I’ve been managing private client monies and investments since 1991.
My move from Julius Baer to Hottinger happened in 2001, when the company was just starting out in London. We had 4 people, 4 phones and 4 desks, and the rest we built up from scratch! We grew it into an independent investment management business, which then merged with a private family office to become Hottinger Group in 2016.
Favourite thing about your role: Having been involved in investments for 30 years, the best part is to be involved in setting investment strategy and asset allocation. That’s the bit I really enjoy.
Working from home tip: Make sure you can separate yourself from the day-to-day functioning of the household, as it can be hard to concentrate in the middle of family life. Make sure you sit comfortably, too, as it looks like we might be doing this for a while!
Proudest achievement: From a professional perspective, passing my MBA when I was in my 40s was a great achievement. But my proudest achievement ever was becoming a father to my daughter in 2000!
Best place you’ve ever travelled: Safari in Kenya in 1992. Being in the National Parks was amazing, staying in hotels opening up onto the plains and having game walk into the restaurant, and getting to see village life first-hand. It was a completely different world!
Favourite book: Always the book I’m reading! Having watched The Looming Tower on TV, I’m now reading the book which goes all the way back to how Al-Qaeda came to be and the events leading up to 9/11.
Favourite TV show: I very rarely watch TV as I’m never in! When I do, I end up watching whatever my wife thinks I’ll enjoy!
What you like to do in your spare time: I’m a part-time swim coach and I run a swimming club for 8-18 year olds, which we’ve unfortunately had to suspend during lockdown. All the swimmers are keeping in touch via club social media, but they’re really missing being in the pool. We’re all looking forward to getting back to it when we can.
We are delighted to share the news that Hottinger Group has again been awarded Family Office of the Year at the City of London Wealth Management Awards (COLWMA) 2020.
This is the third year we have been lucky enough to win the title, having also received the award in 2017 and 2019. The presentation of the 2020 awards, organised by Goodacre UK, took place at the Guildhall on Wednesday 4th March. A full list of the 2020 winners can be found in the official COLWMA press release.
We are so grateful to everyone who took the time to vote for us this year, and of course to all of our clients, business partners and supporters without whom our success would not have been possible. A very sincere thank you from the team at Hottinger.
Mark said: “I’m exceptionally proud of this third win and grateful to my colleagues for all their hard work. We are a small team with a diverse set of skills and everyone pulls together for the benefit of our clients. It’s wonderful to see this being recognised through industry awards. We’re grateful to Goodacre for another excellent ceremony and our thanks go especially to everyone who took the time to vote for us.”
Tom Wickers and Beatrice Cesnaite after collecting the award at London’s Guildhall
Tobi Alexandra Falade of Wimbledon College of Arts was awarded the Hottinger Prize on Tuesday 7th January at the Mall Galleries, London.
The London-based artist was born in Nigeria in 1995 and raised in Warri, Uyo, Eket, Port Harcourt, London, Rochdale and Liverpool. After moving to the UK aged 7, she believes that her ‘shadow self’ lives on in Nigeria whilst she continues life abroad, divorced from her country of origin, a theme which is evident in her work.
Presented by the Managing Director of Hottinger Art, Mélanie Damani, the Hottinger Prize, now in its fourth year, has the aim of supporting emerging talent in the art world.
Tobi Alexandra Falade speaks to Melanie Damani shortly after receiving the Hottinger Prize
Mélanie Damani is a qualified lawyer and art market expert who provides a wide range of art consultancy services to guide Hottinger’s clients in the management and structuring of their art collections, as well as assisting with the selection of works for the Hottinger collection.
Mélanie Damani said “Tobi Alexandra Falade’s work really stood out from a strong field at FBA Futures 2020. We found both the technical excellence and the message behind her work to be extremely compelling and our judges unanimously selected her as the winner. This is the first time the Hottinger collection has acquired a sculpture and we’re thrilled that Tobi’s work has inspired us to diversify. We wish Tobi all the very best and will follow her career with great interest.”
Chairman of the Hottinger collection and Executive Director of Hottinger Group, Alastair Hunter, said “The team at Hottinger passionately believes in supporting talented individuals in the art world to give them the early recognition they richly deserve. We are very excited to add Tobi’s work to our collection and look forward to displaying it for our colleagues and clients to enjoy.”
Emily Woolard, Alastair Hunter, Tobi Alexandra Falade and Melanie Damani
Tobi Alexandra Falade said “I’m very happy to win the Hottinger Prize at FBA Futures as this will be the first art collection my works will be a part of. I wouldn’t have had this opportunity if I wasn’t selected for FBA Futures 2020, an exhibition I really admire because of its focus on figurative art and representation.”
Tobi Alexandra Falade with her works ‘Between Two Worlds’ and ‘My Other’
Hottinger Group has a long history of supporting art and culture, with the financial services brand dating back to 1786. The Hottinger family has been linked to political, commercial, economic and cultural life in Europe as far back as the fifteenth century.
The FBA Futures exhibition takes place annually at Mall Galleries, London SW1. It is the UK’s largest annual survey of emerging contemporary figurative art, mapping new practices and ideas of representation and draughtsmanship. This exhibition is open until 18 January 2020.
For more information on the Hottinger Prize or Hottinger Group, please contact Emily Woolard, Strategy & Marketing Manager on 07735 425 732 or emily.woolard@hottinger.co.uk
Strategy & Marketing Manager Emily Woolard welcomes guests to Mall Galleries for the prizgivingThe Main Gallery at the FBA Futures 2020 exhibition, which is open to the public until 18 January 2020
We are very pleased to announce that Hottinger Group’s CEO Mark Robertson has been named as one of the 50 most influential practitioners in the private client industry.
The 2020 PAM 50 Most Influential initiative is designed to “identify, recognise, promote and introduce the leading practitioners of the Private Client profession and show the breadth and depth of talent at the forefront of today’s Private Client industry.”
Mark joined Hottinger Group in 2013 and is Group CEO and a Director of the Group’s principal entities. On behalf of our clients, Mark maintains a close working relationship with the world’s top private banks, their investment committees and their best-performing investment managers.
Mark’s career in finance began in 1995 as a loans officer with Bank of Scotland, followed by a move to Hambros Group in 1997. In 1999, he accepted a role with HSBC, firstly as a Financial Planning Manager in their Commercial Banking unit and subsequently as a Private Banker advising business owners and entrepreneurs.
After five years with HSBC Group, Mark joined Coutts & Co in London as a Private Banker. Over the course of seven years with Coutts, he performed a number of roles for the bank including a three-year secondment to Switzerland with Coutts Bank von Ernst (Suisse) as Senior Vice President.
In 2011, he accepted the role of First Vice President with Edmond de Rothschild (Suisse), where he engaged with international family offices, managed large portfolios on a discretionary basis for the family offices and was Chairman of the GBP Group Investment Committee.
Mark, your colleagues and clients congratulate you on this well-deserved recognition!
We were delighted and proud to win Family Office of the Year at COLWMA in 2017 and 2019 and we feel very honoured to be on the shortlist again this year.
If you wish to vote for us, please follow the process below.
Thank you so much for your support!
How to vote
Voting is now open and will close on 31st January 2020.
We are delighted to announce that Hottinger Group has been selected as a finalist in the 2019/20 STEP Private Client Awards in the category of Multi-Family Office Team of the Year.
These prestigious awards recognise and celebrate excellence among private client solicitors, lawyers, accountants, barristers, bankers, trust managers and financial advisors. The full list of finalists for 2019/20 can be found here.
The STEP Private Client Awards are very well-regarded in the industry and rigorously judged by a worldwide panel of experts. We’re exceptionally proud to have reached the shortlist and we look forward to hearing the results.
We’re advised that this year saw a record-breaking 314 entries for the Awards, with the expert judging panel shortlisting 66 firms and 12 individuals from across 12 countries.
The winners will be announced at a ceremony on 25th September 2019.
We would like to thank the panel very much for their time and consideration and congratulate all of our fellow finalists on making the shortlist.
Hottinger Group beat strong competition to be awarded Family Office of the Year 2019 at the City of London Wealth Management Awards presented at the Guildhall last night in a ceremony attended by 300.
This marks Hottinger’s second time winning Family Office of the Year, having also topped the category in 2017.
Mark Robertson, Alastair Hunter and Tim Sharp collected the Family Office of the Year award
As well as receiving overall acclaim with the company award, two members of Hottinger staff were celebrated in the individual awards categories. Melanie Damani, who joined the Group in 2018 to lead Hottinger Art, received the Excellence in Business Development award for her skill and tenacity shown in getting a brand new service and client book up and running within a short and pressured time-frame, whilst Strategy and Marketing Manager Emily Woolard was recognized in the Educational Initiative category after developing and launching the Hottinger graduate programme whilst also pursuing and passing with distinction the first part of her MBA with Edinburgh Business School.
Emily Woolard and Melanie Damani received awards in the individual categories
CEO Mark Robertson said: “I am exceptionally proud of the team at Hottinger, who have worked very hard and richly deserve the recognition that comes from being named Family Office of the Year for the second time in three years.
We take great pride in celebrating our people and were very pleased to see Melanie and Emily rewarded for their individual efforts in addition to receiving the company award.
Hottinger Group has already had a busy start to 2019 with the launch of a members-only Investment Circle offering access to private investment opportunities via a dedicated online platform, and the introduction of art consultancy to complement our extensive range of family office services. These awards have given us confidence as we work together to take our firm to the next level.
We are grateful to Goodacre for running this process and especially to our clients, business partners and the public for nominating and voting for us.”
Fix one issue and you might improve
the situation for some people. Live and breathe workplace flexibility, on the
other hand, and you could be well on the way to fixing it for everyone.
As PWC’s most recent Women
in Work index shows, some progress has been made across OECD countries with
respect to equality and diversity in the workplace. Financial services is
stubbornly trailing behind the pack, however, and still
has the largest pay gap in the UK.
It’s been demonstrated
conclusively time and again that diversity, particularly in senior
positions, has a significantly positive effect on the financial performance of
a company. So why hasn’t more happened to move the needle?
In
financial services in particular, women tend to be proportionately represented
in entry-level and junior positions but drop off dramatically at the more
senior levels of an organisation. Understanding why this happens is regarded as
the key to solving the problem – simply find out the reason why women are
leaving and address it. Easy!
I vividly recall taking part in a workshop discussing disappointing
employee opinion survey results at a leading financial services firm. The ratio
in the room was about 75/25 male to female, and it was pointed out that women’s
scores were – in the firm as a whole – considerably worse than men’s. “You’re
women,” boomed my observant colleague, “Tell us what’s up with all of you!”
Part of the problem with the search for a single solution is that women
– unsurprisingly – are all different. As unique individuals, we vary in our
motivations, lifestyles, priorities and career goals. Fix one issue and you might
improve the situation for some people. Live and breathe workplace flexibility, on
the other hand, and you could be well on the way to fixing it for everyone.
What do I mean by flexibility? It’s a set of job design tools, yes – options
for different working patterns, hours, locations etc – but it’s also an
attitude of acknowledging and celebrating differences. If a person’s working
life does not fit in with the goals and values most important to them, their
motivation will suffer and sooner or later they will leave in pursuit of
something that does.
For organisations, the challenge and opportunity is to be adaptable
enough to provide that alignment. Sadly for the firm, it’s not enough to pay
lip service to flexibility. It’s not even enough to offer it in spades without significant
cultural change to go with it.
A high-performing bank colleague of mine used to work offset hours so
she could collect her young children from school in the afternoons. Despite
being aware of her hours, people would repeatedly schedule meetings during
school pick-up, which she would apologetically decline and they would go ahead
without her. She was the only person on our floor following this working
pattern so she felt had to work twice as hard to prove herself. She was viewed by
the ‘9-5 brigade’ as someone who wasn’t worth investing in as she had other commitments.
Unsurprisingly, she left and set up on her own.
Many firms have a deeply ingrained culture which says that those who
have priorities outside the organization are somehow less worthy of status
within it. This has to be dealt with or they will always feel like second-class
citizens. And eventually they will leave – I’ve watched it happen. Flexibility
only works if it’s normal. If flexible workers stick out like a sore thumb,
they will never feel truly on a par with everyone else.
It’s two-way street, of course. I’m not suggesting that employers should
give everyone a completely free rein and expect nothing in return. As I write,
I can almost feel the rage at ‘another one of those demanding Millennials’
trying to make the world fit around her!
Good employees do adapt – they give up a significant portion of their
life to the pursuit of someone else’s objectives and they go above and beyond
the letter of their contract to get the job done. I don’t feel it’s an enormous
ask for a firm to build in enough flexibility that employees can better achieve
their personal goals as well.
I count myself very lucky. Thanks to a great deal of mutual trust and
understanding between my employer and I, I spend around half of my time working
remotely. It’s what kept me in the firm when a significant life event would
have otherwise caused me to leave my role. It’s made me harder-working and more
loyal than I would ever have been to any other firm under any other circumstances.
It might be naïve of me to call it a ‘win-win’ situation, but I’m struggling to
identify the loser.
Technology means that for so many roles it’s possible to do everything
required to meet and exceed objectives from anywhere with a phone and a reliable
internet connection. On occasions when a face to face meeting is required, those
afforded the flexibility of remote working will most likely be more than
willing to put in the leg-work and travel.
Re-thinking success
Women
were not allowed to work in banks until the end of the 19th century,
and for a considerable time after that, the roles they could take were
restricted. In a financial services industry designed around men, it’s unsurprising
that the established working patterns and prescribed path to success may not
suit women particularly well. But, quite
frankly, over 100 years later not enough has happened yet to change that. Women
have instead been expected to adapt their goals, their lives and their attitudes
to fit into a system that wasn’t built for them.
I’m of the view that it’s not that women don’t succeed in financial
services, it’s that the narrowly-defined criteria set by the firm for promotion
to the highest levels of management do not align with their much broader ideas
of what it actually means to be successful.
One of the most successful women I know hasn’t finished climbing up the
ranks within her organization. What she is doing is far more impressive. She is
transforming the way people think and guiding them to create change. She’s using
her skills in the non-profit sector for the good of countless beneficiaries. In
terms of changing the world, she’s already further on the way than most of us will
ever be. But in her firm, that’s not the yardstick used to determine whether or
not someone is successful – it’s more about the number of people reporting to
you, the length of your service or, sadly, even the amount of time you are ‘visible’
at your desk.
If we want a more diverse workforce to exist, and if we want it to pervade
at all levels of seniority, we must champion diverse working practices and broaden
our thinking on what it means to be successful. “One size fits all” does not
work.
At the core of a true flexible working culture is the desire and
willingness to treat employees – men or women – like the unique individuals
they are, to understand their priorities and find a way for them to achieve the
things that are important to them. Firms that manage this will reap the
benefits that a more satisfied, motivated, productive and diverse workforce can
bring.
Mohammed Sami, a Master of Fine Arts graduate from Goldsmiths, was awarded the annual Hottinger Prize for Excellence at an event on Tuesday 8 January at the Mall Galleries, London. Hottinger’s guests were treated to a private tour of the FBA Futures 2019 exhibition, celebrating a selection of work from the most promising art graduates, before the collection was officially opened to the public.
Presented by Alastair Hunter, Hottinger board member and Chairman of Hottinger Art Collections, the award, now its second year, has the aim of supporting emerging artists in the localities in which the Group operates.
Alastair said: “We were delighted to award the Hottinger Prize for Excellence to Mohammed Sami. Whilst the standard of competition was incredibly high and diverse stylistically, his work stood out as both evocative and of the highest technical quality.
The team at Hottinger passionately believes in supporting talented individuals in the art world to give them the early recognition they richly deserve.
We are very proud to be the custodians and owners of Mohammed’s wonderful exhibit and very much look forward to seeing what he does next.”
Winner Mohammed Sami trained in fine arts in Baghdad before attending Ulster University. He was awarded his Master of Fine Arts from Goldsmiths in 2018. Mohammed’s work uses painting to explore the anecdotes of personal memory. His piece Unedited Still Life has been purchased for the Hottinger collection.
Mohammed said: “I was very pleased to receive this award, particularly given the standard of the other artists. I am looking forward to seeing my work displayed by Hottinger.”
Tomi Olopade was selected as the runner up. He studied at Leeds College of Art and impressed with his collection of oil paintings Good Hair, which explores the importance of hair styles and hair care in Black culture. Tomi will be producing a new work on commission for the Hottinger collection.
Artist Tomi Olopade with his work Amy’s Bedroom which forms part of the Good Hair series
As well as awarding the art prize, the Group has recently launched a new company, Hottinger Art Ltd, and the team were delighted to welcome Mélanie Damani on board. An art-market expert, Mélanie is also a qualified lawyer who was formerly Head of Art Advisory for Edmond de Rothschild Group. Mélanie will apply her expertise across range of consultancy services and will guide Hottinger clients in the management of their art collections and in their planning for the future.”
The Hottinger Prize for Excellence was first awarded in January 2018 to Glasgow School of Art graduate Hannah Mooney, who will be the subject of a solo exhibition at the Scottish Gallery in 2019. The Prize is a purchase prize, with the winner’s work added to Hottinger’s collection. In 2019, a runner-up commission prize was also awarded due to the high standard of entries.
By Emily Woolard, General Manager of Hottinger Capital Partners
Colleagues from Hottinger’s London and Dublin offices spent Saturday 8th September on the beautiful South Downs, hiking or biking their way to Devil’s Dyke to raise money for well respected charity Macmillan Cancer Support.
Thankfully, the weather was kind and the far-reaching views provided ample reward for their exertions.
The team split into two groups, with six cyclists setting off from Hampton Court Palace in the early morning and covering over 60 miles in total including some challenging climbs. They battled through pain and fatigue (some more than others!) and finally reached Devil’s Dyke around 5:15pm, where they were treated to some excellent views and a welcome drink.
Meanwhile, an intrepid collection of seven hikers set out from the Sussex town of Lewes and covered 13 miles, eventually reaching the top of Devil’s Dyke and meeting up with the team of cyclists.
After recovering at Devil’s Dyke, the team headed into Brighton to complete their journey and celebrate as a group.
As well as spending time together and tackling a sporting challenge, the teams were raising money for Macmillan Cancer Support. Macmillan is an excellent charity which provides advice and practical help to those suffering from cancer. The cause is close to many of the team’s hearts as a number of colleagues, friends and family have benefited from Macmillan’s services.
On Saturday 28th July England took on the United States in the prestigious Westchester Cup. The event, also known as the International Day, was hosted by the Hurlingham Polo Association, the UK’s governing body for polo, at the Royal County of Berkshire Polo Club. The day was very well supported, with Hottinger guests joining Ally Hunter. They and the assembled spectators saw England, whose line-up included three of the winners of the 2018 Gold Cup El Remanso, retain the cup with a 12-6 win over the United States.
The game pitted evenly matched teams in a contest that was bound to be a close encounter, but in the end a stellar performance from Ollie Cudmore, who scored seven goals, proved the difference in what was a game of ebbs and flows, but England prevailed.
“I’d like to congratulate the English team on an amazing win today,” said Robert Puetz, CEO of the United States Polo Association, the body responsible for the game in the United States. “They played solid polo, were strategic, well-organized and well prepared. Additionally, I would like to thank the Hurlingham Polo Association, who provided amazing and welcoming hospitality to our team.” The Hottinger Group was delighted to represent the England team as an official shirt sponsor along with Flannels; other event partners include De Vere, Globe-Trotter and the Financial Times’ How to Spend It.
Plans are already in place for the next match to take place in the United States during 2019, the first time that the Westchester Cup will be played in consecutive years since the outbreak of the First World War. It’s interesting to consider the parallels with golf and the Ryder Cup in the late 70’s. We see the opportunity for the Westchester Cup to develop and become a fixture in the polo calendar.
It’s worth dwelling for a second on the trophy itself which is well over 100 years old and is a magnificent prize for such a great fixture. Tiffany & Co were entrusted with the production and as you can see from the picture below it is a beautiful trophy which has a few stories to tell!
We expect the match will be just our first major involvement with the game of polo. At the time of writing, we are preparing a deal for new investments that will support the launch of a range of branded sports apparel products for sale in the UK and abroad. The company plans to license the Hurlingham Polo Association brand as its standard bearer for a new range of products.
With incomes and wealth rising around the world, there has been a rise in interest in elite sports and luxury consumer goods, a trend first exploited by Ralph Lauren in the 1970s. The Hurlingham Polo Association is the oldest such body in the game with an illustrious history and an esteemed reputation. The business case is compelling and we look forward to inviting interested parties to take part in what promises to be an exciting venture.
The Hurlingham Polo Association is a natural partner for the Hottinger Group. Both organisations share a culture that promotes sustainable activities and relationships that provide enduring value to a range of stakeholders in society. Soon after British tea planters discovered the game of polo on the Indian-Myanmar border in the 1850s, Hurlingham began to shape all aspects of the game, from the rule book to the handicap system. Today it boasts close to 3,000 members, and is involved with coaching and development, as well as providing scholarships to promising young players. That shared belief in nurturing a legacy is what makes Hurlingham and Hottinger a natural fit.
We hope that this is just the start and we look forward to updating you with further developments in the coming months as the relationship evolves.
By Rodney Birrell, Founding Director of The Wine Investment Fund
The dramatic return of market volatility to equity markets in February 2018 was felt across the world. The VIX index (Wall Street’s “fear gauge”) had its greatest percentage jump on record, as stock markets in the US, Europe and Asia suddenly dropped. Concerns over returning inflation is putting pressure on interest rates and as a result, investors are turning to alternative assets as a means of financial diversification.
The fine wine market is characterised by relatively low volatility (annualised volatility of 10.2% – see chart, Liv-ex Investables), and even though precious metals such as gold (15.9%) have traditionally been considered safe haven assets, volatility within this asset class limits its ability to be considered as a store-of-value. Other commodities such as oil have also shown high volatility. The FTSE has an annualised volatility of 14.1%.
Stability of fine wine is a result of the unique features of this physical asset. Using The Wine Investment Fund’s definition of investment grade wine, the total market size is some £6bn with annual inflows (new production) and outflows (consumption) of around £1 billion. Therefore, the stock of fine wine is not only relatively constant, but is appreciated all over the world and sought after by a growing number of consumers regardless of economic and social conditions – a truly global market.
As a physical asset, wine has a defined inherent value and may therefore be used as a hedge against inflation. Similarly, to gold, fine wine is also an incredibly stable asset, with quality improving rather than depreciating over time as it matures, unlike other alternative investments. Uniquely, the quantity of any vintage decreases naturally, through consumption, as its quality improves as the wine matures and demand therefore increases.
Fine wine is also uncorrelated with other mainstream investment markets such as equities. Shocks in these markets have relatively small – if any – impact on fine wine prices in normal market conditions. For example, with the volatility seen in equities at the start of February 2018, the daily Liv-ex 50 index has remained within a 0.5% range (currently down 0.1% (at 27/02/2018) since the end of January), while the FTSE is currently down 3.04% since the start of the month (at 27/02/2018). This low volatility can also be seen historically using the longest available reliable index, the Liv-ex Investables – see graph.
Long term low volatility and high returns in the fine wine market can also be seen in the market’s risk-adjusted returns (see Sharpe ratio chart).
The introduction of centralised exchanges (such as Liv-ex in 2000) and the use of technology has markedly improved market liquidity and transparency. This has created a sophisticated space for fine wine as an alternative investable asset. Enhanced price discovery and security has allowed the market to develop an infrastructure similar to that of mainstream investment markets such as equities, with a success not yet seen in other collectibles such as art, cars and jewellrey. This has led to dramatic improvements in liquidity (the average market spread of the Liv-ex 50 index – Bordeaux First Growths – is approximately 3.5%) and a stable market environment.
As a store of value fine wine is also much more accessible than other alternative investments/collectibles such as classic cars. There is a wide range of investment grade wines available in the market. The Wine Investment Fund’s universe from which it stock picks the wines held in its portfolios (and which satisfies the Fund’s strict liquidity and quality criteria), amounts to 350 individual wines, with an average price per case of £3,000 per 12x75cl. In contrast, the average price of the 50 classic car models which comprise the HAGI Top index is £619,000 – not exactly within the range of most investors. Furthermore, investors may efficiently gain access to the wine market (i.e. invest in a well-diversified portfolio) through funds such as The Wine Investment Fund, the oldest publicly available wine fund launched in 2003, where the minimum subscription is £10,000.
Given the low volatility, the low correlation, the high liquidity and the high returns, all on a relative basis compared to other asset classes, an investment in wine becomes a must have for investors looking to establish or to maintain a well-balanced investment portfolio.
By Rodney Birrell, Founding Director of The Wine Investment Fund
The fine wine market ended 2017 in positive territory for the third consecutive year with the Liv-ex 100 index, the industry leading benchmark, closing +5.66% and the Liv-ex Investables index gaining a similar 5.68%. It was also a year of records on Liv-ex, the fine wine exchange. Market exposure, the value of all live bids and offers, reached £48m and the bid-to-offer ratio remained above 1 throughout the year; for Bordeaux wines the ratio now stands at 1.8 with almost twice as much value on the buy-side (a bid:offer ratio of 0.5 or higher has historically indicated an upward trend in the market or at least acted as a signal for price stability). Trade on Liv-ex also broadened in 2017 with over 8000 active markets and more merchants than ever before trading on the exchange. The returning demand of traditional markets such as the USA and Asia has continued to be driven by weakness of GBP Sterling relative to the US Dollar and Euro (important because the secondary market for investment grade wines is GBP denominated) and the ever-growing demand for the world’s best wines. UK merchant BI Wines and Spirits “have seen a continued increase in volume sales of physical vintages, especially of Bordeaux, particularly to Asia” in 2017.
Increased attendance (up 2.3% on 2016) at the 2017 Hong Kong International Wine & Spirits Fair and the newly introduced preferential measures for wine imports from Hong Kong into mainland China (an increase in the number of ports available, expediting clearance improvements and developments in the accounting of duty, recognising the growth in wine imports to China) are positive signs of stable demand in the Far-East. In addition, the European Union and Japan have reached agreement on a free-trade deal which will eliminate tariffs on imports of EU goods, including wine, to Japan. The country is already one of the top 5 markets for EU wine in general and Bordeaux in particular and any increase in demand could have significant positive effects on prices. Demand from the Far-East has not just been for the purchase of fine wines, but also for the purchase of chateaux, with over 100 properties in Bordeaux now under Asian ownership, suggesting a continuing commitment to the region.
Results from the main auction houses throughout 2017 (Sotheby’s, Christie’s and Bonham’s) have repeatedly been above the high estimates and global demand has been a prominent feature: the Sotheby’s (sales of $64m in 2017) sale in New York in December reported strong bidding from North American (50% of sales) and Asian buyers (45%) and First Growth Bordeaux were sold at 20% over the high estimate. Luxury goods group LVMH (owners of chateaux Cheval Blanc and d’Yquem) reported growth in revenue and profits in its Wines & Spirits division, including “very strong” sales in the US and China. This suggests that demand for the most prestigious drinks brands continues to grow amongst the world’s wealthiest. These are also strong indicators of traditional collectors having returned to the market in 2017.
The Knight Frank Luxury Investment index, which tracks the price growth in the major categories of collectables found that wine has replaced cars as the top collectables, thanks to the performance of French wines. Compiled by Wine Owners, a business and collector trading platform, it reported “Wine’s performance was driven by exceptionally strong growth in key areas across the world and in particular the resurgence of the top Bordeaux chateaux, which form the backbone of most investment cellars”.
Despite a successful en-primeur (the top 20 merchants sold approximately £85m – up 46% on 2016 – with US wine merchant JJ Buckley reporting their largest ever campaign), Bordeaux producers have continually been reported to be holding back the majority of production and tightened supply of new vintages. For example, the 2016 vintage was larger in volume than 2015, but only a similar number of cases have ended up in the UK. This has driven demand across a range of physical vintages. Paul Pong of Hong Kong based merchant Altaya Wines found difficulties sourcing volume and believes “chateaux are releasing little to no supply for their first tranche”. The tightening of supply and rejuvenated demand emphasises the markets low volatility and we believe this will continue to put upward pressure on pricing. Optimism surrounding the 2015/16 vintages and a broadening market make it an attractive time to invest in fine wine and it offers an important opportunity to diversify into an asset-backed market and a hedge against returning inflation.
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The introduction of centralised exchanges (such as Liv-ex in 2000) and the use of technology has markedly improved market liquidity and transparency. This has created a sophisticated space for fine wine as an alternative investable asset. Enhanced price discovery and security has allowed the market to develop an infrastructure similar to that of mainstream investment markets such as equities, with a success not yet seen in other collectibles such as art, cars and jewellrey. This has led to dramatic improvements in liquidity (the average market spread of the Liv-ex 50 index – Bordeaux First Growths – is approximately 3.5%) and a stable market environment.
Given the low volatility, the low correlation, the high liquidity and the high returns, all on a relative basis compared to other asset classes, an investment in wine becomes a must have for investors looking to establish or to maintain a well-balanced investment portfolio.
