Could you provide a brief overview of your role at Investec?
I’ve been working at Investec for the last five years. Its private bank has been operating for about the last 15 years. Although we are in the same sector as the likes of Coutts and Barclays Wealth, there are some noticeable differences in how we operate. We see ourselves as a catalyst for clients who actively create wealth and we look after these clients according to specific segments.
The group I look after is private equity clients, which is the biggest client group within our wider financial sector.
On a day-to-day basis my role is making myself present as much as possible in the private equity marketplace. A lot of this is face-to-face meetings, so I spend a great deal of time out of the office. We have around 10 desks within the group that cover private equity – the private bank, treasuries, a couple of lending desks, corporate finance to name a few. We have a strong understanding of what they do, and we want to ensure that we are being as relevant as we can.
We want to work with people who are accumulating wealth and in private equity that is certainly the case. We use our wider network to provide legal, tax, and wealth structuring.
How do you work with PE clients to come up with the right finance solution?
High street banks will look at someone’s income and see that they have partnership drawings, a yearly bonus, co-investment carry, profit share, etc, but they will discount half of the bonus and not take any of the other income profiles (fund performance-derived earnings) into consideration.
At Investec, however, we understand the world of private equity managers and we can attribute some actual value when we extend finance to them. We offer day-to-day transactional services: cash management and FX and we can lend to private equity partners in a more sophisticated way. Typically, the majority of what we do is mortgage finance for primary residences and investment properties, but what we really aim to do is build long-term relationships with our clients.
We’ve had arguably our best 12 months in the private equity space. We have doubled the number of clients and I think they like the fact that we understand their world. They don’t need to educate us on co-investing or how they earn carried interest.
Are you seeing a lot of finance activity among your PE clients with respect to funding co-investment deals?
Yes, particularly groups of GPs where one or two partners are looking for financing solutions. There are several ways we can lend to them. One is by leveraging existing assets, which is a lot easier. But increasingly we are seeing European GPs – Germans, French, Italians – living in the UK who don’t have physical assets because they may not know how long they are going to be here.
That said, they are earning significant salaries and have no debt. We can take a view that we will be comfortable lending to these partners because we understand what they do, and we see the bigger picture.
The co-investing environment is getting tougher. Some managers are investing up to 5 per cent per fund, which can be quite significant (depending on the size of the fund). One to two per cent is normally the average figure. That said, we like to see GPs who back themselves and are okay with committing more to their funds.
What type of private equity clients are on the books at Investec Private Bank?
We will look at clients ranging from small start-up managers all the way up to large managers with billions in AUM. We offer private client services, so our niche is really that we understand individuals who work in private equity, regardless of the size of their funds. Brexit is, of course, something that is on our clients’ minds.
Brexit is a key topic for the sector. What are you hearing from your PE clients?
I would say a lot of GPs are taking a ‘wait and see approach’. I think most PE managers view it as an opportunity. There is uncertainty, but nobody is drawing a line in the sand. I’m not seeing any evidence of London-based GPs relocating because of Brexit.
There is still a long way to go on diversity but the more the issue is debated the more likely fund management groups will work hard to identify a broader array of talent.”
What drives your passion in your role at Investec?
I would say that one of my passions is diversity. I consult regularly with the BVCA on this issue. The Investec fund finance team ran a large survey in the market around sentiment in PE, career progression and so on. Some of the more interesting findings related to diversity – mainly gender diversity.
I spoke to a lady who recently moved from one of the Big 4 to take a role at a PE fund and she had some reservations that the only reason she was hired was because she was a woman. She is the only female in an all-male investment team and she knows they told the recruiter they wanted to hire more females.
People think the needle is moving but women don’t feel confident they will get promoted or that there is scope for them to progress. Some private equity groups are taking measures to address this. An article published by the Financial Times in January this year referred to the fact that PE groups like Apax are offering to fly au pairs to support female executives coming back from maternity leave on business trips for the first 18 months.
I think these initiatives are interesting but only time will tell if the numbers actually move – especially at a senior level.
There is still a long way to go on diversity but the more the issue is debated the more likely fund management groups will work hard to identify a broader array of talent.
To conclude, what inspired you to get into finance in the first place and who are your role models?
There is a strong personal element to a private client role. When you’re working on a corporate transaction, for example, it’s perhaps a bit more clinical compared to working with an individual. You really do build a personal connection and I get a buzz from connecting with different people. The people I’d like to recruit are those who can go to meetings and not talk about Investec, not talk about products, but know that they are still doing their job well.
I studied philosophy at the University of Manchester and am currently completing a Masters in Psychosocial Studies at Birkbeck, University of London. I think I felt the City was a dynamic place where a lot of things were happening and that’s what initially drew me into a career in finance.
In terms of who I look up to, I think the work Helena Morrissey (head of personal investing at Legal & General Investment Management) is doing for women and diversity in finance is great. She is tenacious and genuinely passionate about improving the diversity landscape in finance.
I think having the right environment is important to allow you to flourish as an individual and grow your career, and become a role model to others. It’s about having the freedom to be authentic in the work place. And Investec provides such an environment.
©Global Fund Media, published October 2018.
© Global Fund Media 2018