Capital International is typical of many entrepreneurial firms that have been launched in the Isle of Man in recent years.
Capital International is typical of many entrepreneurial firms that have been launched in the Isle of Man in recent years. ‘We had no prior relationship with the island, but we could see the opportunity that existed,’ says Anthony Long, who set up the company in 1996 with his father Peter and brother David.
The family of stockbrokers saw that many mainstream financial institutions had a representative office in the Isle of Man to service expatriate accounts, but that most of the dealing was routed through London. ‘Starting with the life sector, we offered a local presence to the wholesale institutional and intermediary market,’ Long says. The life companies offered – as they still do – various wraps for tax planning, into which prescribed assets may be placed. In the long term this provides many tax efficiencies, not least because the endclients can withdraw 5 per cent of their assets a year for 20 years without paying tax on it.
But the services offered to clients were far from efficient. Says Long: ‘They were being charged hefty rates, mainly because the value of the business was small for the big London brokers. We could provide a local service at a better rate.’
Today, in addition to international broking, Capital provides investment administration and asset management services as well as fund administration, although the firm avoids going head to head with the bigger global administrators such as HSBC and Fortis.
‘We don’t provide shareholder registration services, unitisation and fund accounting structuring,’ says Long. ‘We focus on providing complementary services, including investment administration, custody, valuation, pricing and developing holistic solutions online. We call it the Offshore Investment Platform.’
This platform is offered as an outsourcing solution to independent financial advisers, providers of corporate and trust services and fund management companies. ‘It is a whitelabel wholesale investment solution,’ Long says. ‘For example, we take an instruction from an IFA, execute it, settle it, arrange the custody, price the assets and then do all the relevant paperwork.’
In asset management, Capital offers a discretionary service for individuals with liquid assets starting at GBP75,000, opening up the market to those who do not possess the GBP250,000-plus required by many investment managers. Capital also manages institutional money for the Isle of Man government and other institutions on the island.
Its main collective product, Fusion, is an absolute return-focused portfolio of funds sold through professional intermediaries. The traditional fund management portion is run by five in-house managers and the hedge fund allocation is run by external firms. A money market account product, with fixed rate returns and a two-day notice period, has recently been added to the range. Capital says it is careful to manage the fee process on its products to ensure that all the allocated funds are fully invested. ‘If the intermediary wishes to take an upfront fee, we manage the risk through a redemption period so the net performance of the underlying portfolio is not impacted,’ Long says.
Anthony Long, managing director of Capital International