Family Office
Profile: Lord North Street—The Multi-Family Office Flourishes
The huge growth in wealth in Europe during the last ten years and the growing demands of the very rich to have a greater say in the manageme...
The huge growth in wealth in Europe during the last ten years and the growing demands of the very rich to have a greater say in the management of their wealth have led to the growth in firms specialising in the managing and advising a few ultra-high net worth individuals.
One such firm is Lord North Street, the London-based multi-family office that works with some of Europe’s wealthiest families. The firm specialises in providing bespoke investment advice and constructing portfolios, using a best of breed manager of manager approach.
“Lord North Street is at one level a small group of high grade individuals who advise families on their asset allocation and free of any bias towards any one asset class,” William Drake, co-chief executive of the St James’s-based firm, told WealthBriefing.
“But we also advise on a broad range of investment matters, of which asset allocation is just one – I would say we advise on ‘their investments’.”
The task of finding the best managers in each asset class is done in-house and involves a drawn-out process using both qualitative and quantitative methods. Lord North Street then works closely with the client to create a bespoke investment product, depending on their risk profile and their overall financial, and life-style goals.
Asset allocation is a major part of the process, according to Adam Wethered the other co-chief executive and joint founder of the firm.
“What is so often lacking is the independent advice as to asset allocation among many firms. The blending of each is what we can provide and what clients like about us,” said Mr Wethered.
The bespoke nature of the advice and portfolio construction is what Lord North Street believes it does very well. “It’s totally bespoke…it’s not a multi-manager product,” added Mr Wethered.
Lord North Street also emphasizes the long-term nature of the advise been given to their clients.
“This is not dinghy sailing, this is not changing asset allocation, quarter-by-quarter, month-by-month,” said Mr Wethered.
“We're looking for managers who can do clever things in the space of a quarter, a year, or even three years.”
When Lord North Street was set up in 2000, both co-founders saw there was an acute need to provide much more independent advice and accountability on the performance of managers.
This fresh approach was liked by a number of family offices. “When we set up we had a couple of family offices that hired us—they heard what we were going to do and they liked it,” said Mr Drake.
But clients were also drawn to the considerable expertise and experience of the co-founders. Both are trained barristers—Mr Drake is also a US-attorney—with an in-depth knowledge of finance with considerable contacts in it.
Mr Wethered has a long and distinguished career at JP Morgan which culminated in him running the London office of the US investment bank. Mr Drake founded the stockbroker Granville Davies, a division of Granville, a UK investment bank.
Lord North Street has hired other high quality heavy hitters with very good contacts including James Ogilvy, who held senior roles at UK fund managers Foreign & Colonial and at Mercury Asset Management. And last October the firm employed Caroline Butler, the former head of UK Private Wealth Management at Deutsche Bank.
The attention to detail in the investment process and the hiring of top level staff appears to have worked for Lord North Street. Since inception the firm has gathered more than £1.1 billion in assets under management and attracted eight families with assets ranging from £25 million to £400 million.
But the growth of the ultra-high net market inevitably has led to greater competition for their money and the growth of specialist firms like Lord North Street to cater for them. Groups like multi-family offices Sand Aire and Fleming Family & Partners have expanded their services in recent years to service this growing need.
Despite the maturing of the multi-family office in the UK, some analysts believe the locally grown multi-family office is often tied up with providing investment advice around a few preferred providers and is some way off from providing true best of breed choice for their clients.
They believe the Swiss model is considerably further down the road to achieving true independence.
Needless to say these views are not shared by Mr Drake.
“Central to our concept is that we are independent of all managers and all our searches begin with the universe of managers in that asset class. We are totally best of breed and have no preferred manager except in the sense that we prefer the best to others!”
He added: “Yes, there are some good Swiss houses but many families look first to the UK for their advice.”
And the former US attorney is full of confidence for the future with expansion of the business a priority. “We always wanted it to be a successful, growing business rather than a boutique.”
