In a world where politicians seem to almost exclusively talk in trillions, £2bn ($3.2bn) in assets under supervision may not sound much. However, when you consider these are assets held by a wealth management company founded only 18 months ago, it suddenly sounds, as it should, like an awful lot of money again.
As well as providing a fairly good indication of the type of client London-based Signia Wealth attracts – the £2bn is held for only 78 clients – this almost exponential asset gathering, it seems fair to suggest, indicates that the company instils a high level of confidence in its clients.
Making a difference
But why, or perhaps how, does such a young company manage to put such wealthy people at ease about its ability to manage their money?
A good place to start is with the company’s founder and chief executive, Nathalie Dauriac-Stoebe. A Cambridge graduate, she began her career at Lazard & Co in its mergers and acquisitions corporate finance division, and later joined Coutts & Co, where she was one of four founding members of the company’s private office advising ultra-high net worth clients. Before she left to found Signia, her team had raised over £4bn in assets under management.
Dauriac-Stoebe has picked up a number of industry accolades; she was named in the Financial News list of ‘100 Rising Stars for 2010’, and also won the Spear’s award for the ‘future leader’ in the wealth management industry.
However, awards alone will not encourage the wealthy and financially savvy to hand over their hard-earned cash; more important is Dauriac- Stoebe’s approach to managing client money.
“I believe that we can make a difference,” says Dauriac-Stoebe. “The world has changed massively since 2008 in the financial industry and people are looking for an alternative – they want independence, a small firm, better service, a more proactive approach.” Dauriac-Stoebe adds that by “proactive”, she means Signia will come to clients with new ideas suited to their financial needs. She also explains that, in contrast to popular sentiment, rather than working against the banks, Signia works with them. She explains: “Many people simply disregard banks and bankers these days, but I believe they do still have a lot to offer – you just need to work with them.”
One way Signia uses its relationship with a bank to its clients’ advantage is by negotiating high interest rates for its cash management service – a consideration often overlooked by wealth managers focused on investment returns, but one which is important to customers. Dauriac-Stoebe says these rates exceed those offered at an “institutional” level and are in line with those offered to banks’ private clients.
Wealth preservation
It is perhaps not surprising that having somewhere relatively safe to “park” money is a key consideration for Signia’s clients. The company’s client list consists exclusively of those with over £10m in net worth – most are entrepreneurs who sold all or part of successful businesses, so wealth preservation rather than aggressive accumulation is likely to be key.
Dauriac-Stoebe says many of these are clients that have known her for a considerable length of time.
“I have known some of our clients for years,” she says. “It is now a question of ensuring that we do a great job for them, so that the quality of our service is spread by word of mouth.”
This leads us back to that question of confidence. Perhaps another reason why Signia inspires such trust is its five-strong advisory board, which boasts a number of well-known individuals.
Heavy hitters
Performing the role of a non-executive board, the group meets with Signia’s management, who present the company accounts and its forecasts. The board in turn offers informal advice to Signia on areas such as recruitment, investment policy and expansion, as well as providing general guidance on the business.
One of its members is entrepreneur John Caudwell, founder and former chief executive of the Caudwell Group, which owned high-street retailer Phones 4u. The group was sold by Caudwell in September 2006 for £1.46bn – the biggest single cash payment for an organically grown business in the UK.
Also gracing the list of board members is Michael Balfour, who founded Fitness First in 1992. It has grown to become the world’s largest health club chain, boasting operations in more than 18 countries, with over 530 clubs and 1.5 million members.
Private equity guru Jon Moulton, Harvard Business School lecturer Dante Roscini and property tycoon Stephen Vernon make up the rest of the board.
Aside from their ‘official’ role as unofficial advisers, having such heavy hitters on the board gives Signia kudos in the entrepreneurial world – a world where who you know can mean everything.
This theme of relationship building and networking is reflected in the staff hired by Signia over the past 18 months. The company’s original team came with Dauriac-Stoebe from Coutts, but a quick glance at the company’s website reveals staff poached from the private offices of JPMorgan, HSBC, Arbuthnot Latham, GLG Partners and others.
Dauriac-Stoebe explains that her team has been built up purely through headhunting.
“We always look for the stars from the private bank¬ing and wealth manage¬ment industry,” she says.
Private equity arm
One of the company’s latest additions is Shalini Khemka, who joined as managing director with responsibility for coordinating the expanion of its private equity arm, and later its international expansion.
With a background in private equity and as an entrepreneur herself – she set up the first company trading letters of credit with a partner in 1995 – Dauriac Stoebe says Khemka is well placed to take the business forward in this area.
Another reason Khemka is an attractive hire for the company is because of her recent efforts to launch the London Entrepreneurial Exchange (LEE), a not-for-profit organisation which was unveiled in May to promote entrepreneurship in the UK.
The three pillars
Khemka explains: “There are three pillars of the LEE. One is to connect founders of business – people who are majority owners in a business or who started their own business.
“The second pillar, which we have already begun, is to start a think tank for entrepreneurship – the first stage of which has been to write a paper, alongside David Ross [founder of Carphone Warehouse] and Martin Wilson [head of wealth structuring at Signia], on entrepreneurs’ taxes, which will be submitted to government in due course to lobby for certain changes.
“The third aspect is to find businesses that are members of the LEE, or within mine and Spencer’s [Moulton, private equity director at Signia] networks, and to match these to ultra-high net worth individuals interested in making investments in high quality companies.”
It is the third pillar which aligns with the aspirations and direction of Signia, says Khemka, as the company builds a co-investing, private equity capability.
In the longer term, Khemka is also tasked with helping to expand Signia’s capabilities abroad. In view of this, in July the company registered with the Securities and Exchange Commission to provide investment advice to US residents, although Dauriac- Stoebe says this was more to ensure it could continue to serve existing clients rather than as an indication of things to come.
But Dauriac-Stoebe did confirm the company has plans to open an office in Switzerland in the near future “hopefully in the New Year” – and also in the slightly less glamorous West Midlands region of the UK. Other countries are also on the agenda, and Dauriac-Stoebe says she has hires in mind should it become practical to expand into Asia.
Plans for growth
This expansion may, to some, seem premature – advisory businesses of any calibre take a long time to expand into foreign markets, if at all. Is there not a fear that Signia is growing too quickly?
“A company can never grow too quickly if its back office is good,” says Dauriac-Stoebe. “Everybody cleans the floors here, even me.”
In that case, how big does she see Signia in five or ten years’ time? “As big as we can be.”
The confidence Dauriac- Stoebe has in Signia, and in her own ability to manage it effectively, is infectious. This quality may help to explain why many wealthy individuals have put their trust in a company as young as Signia over the past 18 months, and why this company can realistically talk of such rapid expansion at a time when most are happy to hold onto what they have already got.
