Category: Funds

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Samuel Knight’s aggressive five-year growth plan leads to new office opening in Baghdad

Newcastle-based Samuel Knight International has announced plans to open a new office in Baghdad as part of its extensive international growth plans. This move will support clients of the specialist global energy and rail recruitment firm and further ensure the company abides by compliance laws in Iraq.

Haider Kadhim, Samuel Knight’s Iraq Country Manager will be the point of contact for clients and candidates in the city. The firm will officially launch the office opening in an event next month that is expected to see representatives from the Department of Trade Industry along with other several reputable organisations attend.

Commenting on the firm’s success, Steve Rawlingson, CEO at Samuel Knight said:

“Our aggressive five-year growth plan is manifesting at such an impressive rate, taking the company to exciting new territories. The team is working diligently to surpass expectations set out in the plan and ensure Samuel Knight is cemented as the leading global energy and rail recruitment specialist. Our Baghdad office will give us a distinctive edge over our competition and allow for more exciting business opportunities. Once the office becomes more established and client acquisition develops, we will certainly be adding more consultants and manpower in the city.”

Foreign Direct InvestmentFunds of Funds

Bitcoin: Stability Not Likely For Burgeoning Investment Product

Since it first became accepted as an investment product, Bitcoin and other cryptocurrencies have been fluctuating in price and popularity, going from a viable replacement for cash and credit cards through to merely another flash-in-the-pan concept. Hannah Stevenson, Staff Writer, shares an insight into this product and how its value has changed since it first took off.

Cryptocurrencies, a digital currency that can be exchanged for goods and services in a similar way to cash, have been in circulation since around 2009, although they only became mainstream more recently. Some firms even started accepting it as genuine currency, whilst others have viewed it as an investment opportunity.

Over the years, the currencies have fluctuated in value, as investors and users alike try to understand their potential and adjust to the realities of using online currency as opposed to physical money.

On 8th May, the world’s largest and original digital currency, Bitcoin, jumped around 10 per cent within 24 hours, pushing past $3,700 for the first time in three weeks. Nigel Green, chief executive of deVere Group, commented on the increase.

“It was a relatively sudden jump, and, of course, positive news for those currently holding Bitcoin. However, the price only reached the top of the trading range and investors should not be popping champagne corks just yet.”

 “There are three likely drivers of Bitcoin’s price spike. First, there are widely published reports that according to a leaked interview with a commissioner, a Bitcoin ETF could imminently secure approval from the U.S. securities watchdog.

“Second, the development of the lightning network which will dramatically improve Bitcoin’s well-documented scalability issues, allowing it to move towards mass adoption. And third, the 2020 Bitcoin halving. The code for mining Bitcoin halves around every four years and the next one is set for May 2020. When the code halves, miners receive 50 per cent fewer coins every few minutes. History shows that there is typically a considerable Bitcoin surge resulting from halving events.”

“Bitcoin is the flagship cryptocurrency and, as such, we can expect when its values climb, it will drive prices of other major digital currencies such as Ethereum and XRP.”

This increase is a positive point for Bitcoin, which has faced many challenges in 2019 already, with a number of firms deciding that the currency’s popularity in 2017-2018 was not enough to continue to make it a viable option as a form of payment. 

Among those firms whose attitude towards Bitcoin and other cryptocurrencies is forward-thinking waste management firm, BusinessWaste.co.uk, which has recently said that it is ‘reluctantly’ no longer accepting cryptocurrencies – such as Bitcoin – as payment for its services.

The company originally announced it had become the first refuse and recycling business to accept these virtual currencies as payment in 2017 in order to give flexibility to their customers in an increasingly digital age. However, the firm says that despite its efforts, the uncertainties of the market are making digital currencies an unreliable source of payment.

Mark Hall, Communications Director of BusinessWaste.co.uk, commented on the figures and his firm’s inability to accept the currency as a form of payment.

“Cryptocurrencies have become much more mainstream in recent years – which is why we were happy to move with the times and accept these digital forms of money as payment. As a business we are dedicated to being thought leaders and innovating to provide the best service to our clients, and accepting internationally-recognised digital currencies was one way we could do that – but, as with many emerging technologies, there are still wrinkles to be ironed out within the cryptocurrency market.”

These forms of currency – which include the most well-known, Bitcoin, as well as other forms such as Ethereum and Litecoin – are not tied to a particular country’s economy as with standard, or fiat, currency. This means it has a tendency to be much more volatile than fiat currency; for example, in 2010, when the currency made its first real-world transaction, 1 Bitcoin (BTC) was worth less than £0.01. In December 2017, 1 BTC was worth over £15,000 – a fluctuation many times higher than a fiat currency would experience over a 7-year period.

This volatility has come to be considered an intrinsic hazard of a currency whose value works much like traditional stocks and shares – where market rumours and movement have potentially massive knock-on effects on its value. This could have potentially serious ramifications for businesses who accept crypto payments and then find themselves with a payment which has dropped significantly in value within a short period – such as in December 2017, when 1 BTC fell in value from £15,000 to £2,500 today in response a crackdown on improper practices in the market.

However, the popularity of cryptocurrencies has also led to unscrupulous users attempting to use ‘scam’ or fake coins to pay for goods and services. Cryptocurrencies rely on key information to verify that they are legitimate, such as the ‘white paper’ which details the origins of a coin, who made it, and how it works. These papers can be forged and simply just made up – which can cause businesses who end up with scam coins to be out of pocket, and as such firms such as BusinessWaste.co.uk have come to realise their fallibility and declined to accept them as payment.

Overall, the issue of Bitcoin and other cryptocurrency’s effectiveness and continued acceptance rests on proving their legitimacy as a currency and creating systems where they can be safely traded. This will remain a challenge for the future and will provide many interesting developments for investors and users alike.

digital tax
FinanceFundsTaxTransactional and Investment Banking

The importance of Making Tax Digital to the UK mid-market

The importance of Making Tax Digital to the UK mid-market

Written by Steve Lane, CTO at Access Group

With UK Government’s Making Tax Digital (MTD) deadline less than two months away, the race is on for UK organisations to understand the impact of MTD on their business. MTD could mean a significant shift in operations for some organisations, which means they need to act now in order to get themselves in order for the impending deadline.  


What MTD requires

The Making Tax Digital programme will require UK businesses with annual turnovers above the VAT threshold of £85,000 to keep digital records for VAT and submit their returns digitally. The points-based penalty system means business taxpayers gather points with each late submission of an MTD report, those with multiple businesses must submit tax reports for each of their businesses. To ease the transition process, HMRC is allowing the use of ‘bridging software’ to support the digitised submission and account information retrieval from spreadsheets. However, those without it in place risk not being able to carry out their business as usual.

While all respondents in Access Group’s survey use some type of electronic system for financial management, 96 percent of mid-market businesses still process a portion of their tax returns manually, for example performing off-system calculations, which could be problematic come 1st April if businesses fail to use bridging software to support the digital submission of their VAT returns. Which begs the question, why do some organisations still rely heavily on manually calculating? A large proportion of the finance professionals surveyed explained that they haven’t transitioned to 100 percent digital processes due to a lack of knowledge and training (26 percent) while others said it’s the fact that multiple legal entities are involved in VAT registration (23 percent).


Putting off MTD is no longer an option

Manually entering VAT is inefficient and opens businesses up to human error. Under the new regulations, mid-market businesses could stand to lose not only money in fines, but credibility within their field. Putting off making the necessary technical changes to your business is no longer an option.  

There are certain things that businesses simply cannot afford to ignore, for instance:  


Transformation

Deploying new business software isn’t always an easy decision. Especially when there are multiple ways to ensure your organisation remains compliant with government regulations. Considerations need to be made for either full business software transformation or a single solution update i.e. bridging software, to support. Given the impending deadline, businesses must act now, to ensure they’ve put in place measures that abide by the regulations.


Accreditations

When deciding to begin a digital transformation project, particularly with digitising financial systems, choosing a partner that has the proper government accreditations is vital. Acronyms like ISO or IL are ones to look out for.


Productivity

Digitising financial systems offers the business not only a more efficient, and free of human error way of working, but a more productive way as well. Entrusting admin-heavy tasks to intelligent software can free up time elsewhere to focus on innovation, business development and growth ambitions.

Whilst it’s important that businesses’ financial systems are all set for the 1st of April deadline, to think about Making Tax Digital solely in terms of tax compliance would be to miss the point. It’s the perfect opportunity for UK business’ senior management teams to take a broader perspective – one that turns this regulatory burden to the business’ advantage. The organisations who act now are the ones who will see greater efficiency and productivity, driving both business growth and profitability. It’s good practice to update your operational processes at any moment in time, the MTD deadline provides a good excuse for companies to do just that. Given the pressures coming from Government organisations to digitise and the complexities that go into technology investment, mid-market businesses need to ensure their finance teams’ house is in order to remain compliant and avoid fines in the new era of digital tax.

Cash ManagementFinanceFundsMarketsRisk Management

TOP RANKINGS FOR ASHFORDS LLP IN PITCHBOOK’S GLOBAL LEAGUE TABLES

Ashfords has again been ranked as one of the most active law firms globally in venture capital. The firm has been ranked 2nd in Europe for 2018 by PitchBook, which provides a comprehensive ranking of private equity and venture capital activity worldwide.

Ashfords is the only independent UK law firm to appear in the top five most active firms in Europe and has been placed in the top 5 in each of the past eight quarters.

PitchBook’s global review details top investors by region, firm headquarters, as well as the most active advisers and acquirers of PE-backed and VC-backed companies.

Chris Dyson, Partner and Head of Ashfords’ technology sector, commented: “Ashfords’ recognition in this prestigious league table confirms the team’s position as a leading venture capital practice in Europe. The team has deep expertise in this area and are very proud to work alongside many leading investment funds and growth companies.”

Deals the firm completed globally in 2018 include advising:

Notion Capital, Eden Ventures and BGF Ventures on the $350m sale of NewVoiceMedia to Vonage

Form3 on its investment from Draper Esprit, Barclays and Angel CoFund

Fluidly on its investment from Nyca Partners and Octopus

Anthemis on its investment in Realyse

Simply Cook on its investment from Octopus

WhiteHat on its investment from Lightspeed, Village Global, Anil Aggarwal, and Wendy Tan White

Mobius Motors on its investment from Pan-African Investment Company, Playfair Capital, VestedWorld and others

Local Globe on its investment in StatusToday

Holtzbrinck Ventures and Notion Capital on the sale of Dealflo to OneSpan

BGF on its investment in Ruroc.


Ashfords LLP
ashfords.co.uk

Cash ManagementFinanceFunds

Mayflex forms a Distribution Agreement with Global Invacom

Mayflex, the distributor of Converged IP Solutions, announces it has formed a distribution agreement with Global Invacom. The deal will see Mayflex and Global Invacom targeting Multi-Dwelling Unit projects by liaising with System Integrators, Consultants and End Users.

Global Invacom, the global provider of satellite communications equipment, specialises in Fibre Integrated Reception System (“FibreIRS”), delivering Satellite TV reception. Global Invacom’s vision is to increase the awareness of the advantages of FibreIRS and to work alongside Mayflex to help specify FibreIRS alongside cabling, data and CCTV Security.

Aaron Ghera, Sales Manager at Global Invacom, commented on the alliance: “Having seen interest from a number of organisations, we’re delighted to form a distribution agreement with Mayflex, who we believe have the resources, industry knowledge and proficiency to support our strategies.”

He continued, “Our plan is to minimise the amount of contacts required for a single project. For instance, rather than approaching four different supplies for your data, security, cabling and Satellite TV, Mayflex will supply all four services from one point of contact. By providing an integrated system solution, we can add more value to our customers and develop relationships that will see similar integrated systems across the UK.”

Ross McLetchie, Director of Sales, commented, “I am delighted to welcome Global Invacom on board with Mayflex. Incorporating this brand into our existing product portfolio will open up a host of new customer opportunities.”

Ross continued, “It is an exciting start to the year for Mayflex, as this agreement comes just shortly after the launch of Excel’s new Passive Optical Networks (PON) Solution.”

Similar in concept to PON infrastructure, FibreIRS technology is a new method of carrying satellite signals via fibre rather than coax. There are various advantages of using fibre such as reduction in signal loss, increased distance capacity, scalability and improved cost efficacy.

Ross concluded, “New customers to Mayflex can be assured of a first rate, knowledgeable team of sales and technical personnel. Partners will be provided with dedicated account management and the support needed to ensure the correct solution is specified and delivered on a project by project basis. I am confident that Excel’s new PON Solution and the Global Invacom range will become a staple part of our product portfolio and look forward to working with all parties involved.”

The FibreIRS technology itself was developed and manufactured by Global Invacom with the intention of revolutionising the satellite tv market. Over the years we’ve seen the development of similar products throughout the industry, however Global Invacom is determined to be at the forefront of the satellite industry and Mayflex are enthusiastic to support this drive.

The range of Global Invacom products will be widely available to purchase from Mayflex from February 2019. Global Invacom will also be sponsoring the upcoming Excel Partner Briefing events, taking place across the country in Birmingham, Manchester, Glasgow and London. There will be presentations on both the Excel PON Solution and Global Invacom’s FibreIRS Technology, as well as representatives available in the exhibition areas to discuss any requirements. Visit www.mayflex.com for further details or speak to the sales team on 0800 75 75 65.


Infrastructure

61% of Brits are worried the high street will disappear in the next 10 years

New research by KIS Finance has revealed that consumers are worried the high street is going to be lost completely due to the current store closures in the news.


From surveying 1,000 consumers in the UK, KIS unearthed startling findings including:

•61% of Brits are worried the high street will disappear in the next ten years due to recent store closures in the news

•Northern cities have by far been worst hit by store closures

•Food and beverage, value and fashion brands are predicted to be the next victims of the high street

•If local high streets had free parking and easy accessibility, consumers would be more likely to shop in-store


As part of its research KIS mapped out which cities had been hit the hardest by the major store closures of the last year, including those announced already in 2019 such as M&S and Patisserie Valerie. This revealed northern cities such as Leeds and Glasgow had been hit far harder than their southern counterparts. The top cities impacted were:

1.Leeds
2.Glasgow
3.Aberdeen
4.Bradford
5.Cardiff
6.Doncaster
7.Leicester
8.Manchester


By partnering with James Child, Retail Analyst at EG, we can see there doesn’t seem to be any sign of these closures letting up, he says: “It is quite likely that there will be a continuation, if not a proliferation of the negative headlines in retail. The raft of CVA’s and administrations in the sector has culminated in an expected 1,600 store closures across the UK, with over 18 million square foot of prime retail real estate vacated. When we break down the events of 2018 there are some trends which we could well see exacerbated into 2019 – due to fragile trading conditions and economic uncertainty.

There are certain sub-sectors that will face more pressure others. The fallout from the department store will continue at pace, with the future of House of Fraser, and Debenhams in particular should come to a head, a merger quite possible with a reduction of their overstretched portfolios. Food and beverage, value and fashion brands will come under more strain as over stretched markets begin to weed out weaker offers as retail Darwinism bites.”


When asked what would tempt them back to the great British high street, the top answers from Brits were:

•More staff to ensure that the experience is quicker (41%)

•Clearer stock check in store (34%)

•24-hour service so that you can shop at any time (27%)

•Self-checkout service to avoid queues (26%)


After asking consumers what they think the high street will look like in ten years, it seems that consumers are worried that independent stores won’t exist, the below is listed from most likely to least likely.

1.Restaurants
2.Coffee shops
3.Second-hand shops
4.Bars
5.Fast food restaurants
6.Retails chains e.g. department stores
7.Clubs
8.Cinemas
9.Banks
10.Travel agents
11.Independent retailers


Holly Andrews, Managing Director at KIS Finance says;

“With store closures flooding our news-feeds recently, we were interested to find out what the future holds for the high street and how consumers’ shopping habits might affect retailers’ footfall. It is obvious from our research that people do still like going into store to shop, but it just isn’t as accessible as online shopping is.

To save the high street many retailers need to ensure that they are thinking innovatively about how to draw customers in with clearer in-store stock checks, more staff and extended hours during busy periods. The reason why so many retailers are struggling with their stores is because consumer shopping habits are changing and the high street needs to change with it, creating a more community led atmosphere with more accessibility and variety for everyone.”

After surveying Britain’s consumers and finding out what the high street could look like in the future, KIS Finance have collaborated with Sam Edwards, an illustrator from London, to visual these changes.

Cash ManagementFundsRisk ManagementWealth Management

Samuel Knight International on track to continue major growth following investment

Samuel Knight International, the global recruitment and project man-power specialist headquartered in Newcastle, has announced significant investment from Gresham House Ventures. Samuel Knight, which was established in 2014 and has offices in London and Bristol, provides skills and energy solutions to the energy and rail sectors on a permanent, contract and temporary basis.

The company has demonstrated impressive growth since its formation. Last year, it achieved £13m turnover and took home ‘Team of the Year’ at the Great British Entrepreneur awards. 2018 also saw Samuel Knight securing major new client contracts in more than 30 countries, boosting headcount and expanding the business to accommodate business growth.

The growth capital investment from Gresham House Ventures, using funds from the Baronsmead Venture Capital Trusts, will fund Samuel Knight’s near-term growth plans. These include increasing headcount at the offices in Bristol and London and adding local talent to the Newcastle team, from entry level graduates to experienced consultants. The company is also planning international expansion with the potential acquisition of two sites abroad.

The recruitment drive is geared up to support expansion across the energy and rail space given increasing demand from clients and candidates. Samuel Knight is focusing on achieving greater market share and boosting awareness of the brand through targeted marketing and business development. The investment will also allow Samuel Knight to further invest in technology to continue innovation within the business.

Steven Rawlingson, CEO at Samuel Knight said: “We have a clear vision of what we want to achieve with the investment, and how this will help us to support commercial goals. We are delighted to have secured the funding from Gresham House Ventures, who share in our ambition and vision to grow the business. The investment will enable us to strengthen our global offer, expansion plans and team growth.”

Paul Kaiser, Katy Lamb and Michael McCulloch from UNW LLP provided financial advice to Samuel Knight International.

Katy Lamb, Senior Corporate Finance Manager at UNW who led the transaction said: “Having worked with the business since late 2017, helping management prepare for the investment, we were delighted to advise on the finance raise and have enjoyed working with such a dynamic, fast-growing business. It’s also great to see investment into the North East.”

Steve Cordiner, Director at Gresham House said: “Steven and the Samuel Knight team have done a fantastic job in growing the business so rapidly in such a short time period and we are proud to be partnering with such an ambitious team. There is huge scope for Samuel Knight to expand globally and we look forward to supporting the business on this phase of its journey.”

Anthony Evans, Adam Rayner and Harry Hobson from Muckle LLP provided legal advice to Samuel Knight International.

Shoosmiths LLP provided legal advice to Gresham House and Dow Schofield Watts provided the financial due diligence.
The Gresham House Ventures team invests equity of up to £5m in growth businesses, supporting founders with bold ambitions for the future, whilst providing transformational capital and expertise to accelerate business potential.

Cash ManagementFundsPrivate Funds

Underestimating the digital wealth start-up threat

A recent report from GlobalData found that only 10% of wealth managers perceive robo-advisors as an immediate threat.  With the entire financial industry racing towards widespread digital adoption, it begs the question – shouldn’t they be more worried?John Wise, CEO, Co-Founder and Chairman of InvestCloud investigates.

The biggest mistake wealth managers are making is holding on to the long-standing belief that robo-advisors will only serve the lower retail market. This is the same mistake ‘brick and mortar’ stores made in sizing up Amazon as a threat; they fail to appreciate the competitive advantage a digital platform has.

Many high earners are turning to robo-advisors and digital processes for a better return on their portfolio. A recent survey from InvestCloud found that 49% of investors are using mobile apps to manage their wealth. A further 48% are using a firm’s digital offerings as a key differentiator when choosing their manager. As investors continue to be more digitally savvy, this will certainly increase.

As things stand, digital can feel like the enemy to traditional wealth managers.

The need for hybrid wealth management

What many wealth management firms are failing to recognise is that it doesn’t have to be one or the other. By deploying a hybrid model of digital and traditional services, these firms can compete successfully in this changing digital environment.  

Traditional ‘brick and mortar’ wealth managers are faced with two key challenges today. The first of these is the well-documented fee compression. The second is the transfer of wealth from aging boomers to younger, more tech savvy and less financially educated generations – Generation X, Millennials and – soon – Generation Z.

At this inflection point, everyone has one question on their mind: How are firms going to attract new clients and retain existing ones in a cost-effective manner? 

The hybrid model of human and digital advice means advisers can use cost-effective technology from the robo space and combine it with differentiated and engaging client experience. This will be key to serving younger demographics. Hybrid advisors will be able to scale like a robo-adviser, being able to serve more clients, while ensuring continued engagement with existing clients through face to face interactions and digital empathy tools.

This change is already happening. Those who can see it as an opportunity and not as a threat will have the upper hand.

Creating a truly personailsed digital service

 

While automation plays a critical role in increasing a firm’s profitability, it is only one side of the equation. Clients will measure the quality of a service by what they see, so continually improving the quality of their digital experience is critical.

When an adviser cannot speak and interact with clients face-to-face, it can often be difficult to create and maintain a strong relationship that keeps a client sticking with your business. Instead, advisers need to create the same level of service online. Financial institutions instead need to build digital relationships, where each client can be engaged on their own terms.

This is why the digital experience is so important. It is not just about providing online services – wealth management clients also require a truly personalised, beautifully designed, intuitive and easy-to-work-with platform that caters to all their individual needs.

But this should not be one-sided. The client and adviser portals need to be directly linked, so the adviser can see what the client is looking at, or even influence the dialogue remotely using chat, video or direct messaging. This way, advisers can deliver complete personalisation.

The importance of data

Firms can not solely focus on the client-facing aspects of their business. Looking behind the scenes is equally important.

Getting information correct and accessible is key to success when operating at scale. Adopting a data warehouse is the most important aspect of any digital strategy. Information is power – but only if it is correct, gathered in one place, and is in a structured format.

Many traditional firms fail to appreciate how information from correctly managed data can be leveraged to better serve their customers. To use the Amazon analogy again – the amount of client information they can use from customer profiles is something brick and mortar stores can only dream of.

Using the right digital platform, wealth managers can collect client data, but also monitor how this information changes. For example, they can see which demographic pays closest attention to market changes, or how a client’s investment objective or risk tolerance changes over time.

Those using the right digital platforms can access deep behavioral analytics, which in turn helps them support more clients with less resources. Data in today’s digital environment goes beyond ‘csv’ files to include text, chat, documents, and pictures. Imagine an advisor on a call where the client is asking about a recent capital call transaction. Centralised platforms enable advisors to access all relevant client information, including primary documents from the custodian or fund administrator.  

The last piece of the puzzle is adoption. How are digital platforms helping wealth management firms increase adoption and retain existing clients?

Behavioral science functions combine unique and customisable digital personas. The right platform will allow financial institutions to connect with all their clients, despite vast differences in wealth, age, outlooks, and all the numerous facets that make them unique. Digital engagement requires human empathy, and personalised platforms can make each user feel  that their financial concerns are understood, whether they are Baby Boomers, Generation X or Millennials.

These elements are what constitutes a great overall digital strategy in 2019. Armed with the right tools, advisers will have an advantage over the robo advisers.

This is the holy grail of hybrid wealth management: Automated digital processes combined with the advantage of human insight. Being able to undertake ad hoc tasks for clients or difficult-to-do exercises that are a challenge, can now be automated with the click of a button. Digital empathy – expressed through the right tools – will set you apart. Longer retention, higher AUM growth and improved quality and operational efficiency all await.

With the right digital strategy, robo advisers have nothing on you.

FundsMarketsRegulationWealth Management

FTI Consulting Resilience Barometer Sheds Light on Lack of Business Preparedness

At this week’s World Economic Forum (WEF) in Davos, FTI Consulting launched their inaugural 2019 Resilience Barometer which explores how G20 companies are tackling an interconnected, technologically disrupted and increasingly regulated world. Astonishingly, the report has found that whilst companies anticipate challenges, such as cybersecurity and data, they remain largely unprepared.

 

In an age categorised by the WEF as “The Age of the Fourth Industrial Revolution” (4IR), it is more important than ever for G20 companies to be instrumental in supporting societies and governments navigating unavoidable uncertainty and volatility. FTI Consulting’s new report outlines the key challenges we face as we move into 2019 by investigating company preparedness to 18 scenarios which could have a negative impact on turnover, value and reputation.

 

Highlights of the report include:

  • The resilience score for the G20 is only 40 points (out of a top score of 100 points) and turnover has been lowered by an average of 5.1% over the last 12 months, a major cause for concern in an environment that is growing more and more challenging.
  • We have found that the biggest threat to resilience in 2019 is that of ‘cyber-attacks stealing or compromising assets’ and 30% of companies we surveyed said this had happened to them in 2018. Yet whilst 28% of business leaders predict that this will occur to them over the next year, just 45% say that they are taking proactive steps to manage this risk.
  • 87% of companies expect a major crisis in 2019, yet only 4 in 10 are very confident in their ability to manage such a scenario.
  • One-third (1/3) of companies acknowledged that they are not doing enough to keep their data safe.

Kevin Hewitt, Chairman of FTI Consulting EMEA region explained that: “This report looks to identify and unpick the challenges, and opportunities, that companies are facing today as they manage risk and enhance their corporate value. More must be done to ensure sufficient infrastructure and processes are in place to proactively manage business threats in 2019. With significant expertise and experience, FTI Consulting is well placed to help businesses effectively respond in an effective and efficient way.”

 

Following the launch of the FTI 2019 Resilience Barometer, FTI Consulting will be attending the WEF in Davos this week and are available for more in-depth analysis of these results and how FTI Consulting can help your company build resilience and protect value in the face of challenges brought about by the 4IR.

BankingHedgeMarkets

Alternative SME finance provider Capify secures £75 million credit facility from Goldman Sachs

Capify, a leading alternative SME finance provider in the UK, has secured a £75 million credit facility from Goldman Sachs Private Capital (“Goldman Sachs”) to support its future growth plans and provide working capital to thousands of British SMEs over the coming years.

 

The Greater Manchester-based fintech company will use the new facility to accelerate the growth of its lending business to UK SMEs through its merchant cash advance (MCA) and business loan products. 

 

Capify has been active in the UK since 2008, executing over 9,000 transactions for UK SMEs seeking working capital for their business. Since inception, Capify has helped deliver £150 million in business loans and merchant cash advances in the UK.

 

“This is a landmark achievement for Capify and we are very pleased that we have secured this financing with Goldman Sachs, one of the premiere capital providers in the world,” said David Goldin, Founder and CEO of Capify.

 

“This new multi-year credit facility allows us to deliver on our own growth plans, whilst providing much needed access to capital for UK SMEs to help them to grow, to boost the economy and to create jobs.”

 

“The credit facility validates our company as a leader in the marketplace and underlines the strength of our business model to provide simple, affordable and smart financial options to UK SMEs.”

 

Pankaj Soni, Executive Director at Goldman Sachs Private Capital, said: “Capify is one of the leading SME finance providers in the UK. We have been impressed with the management team, business model and innovative finance solutions for SMEs. We look forward to supporting their growth in the years ahead.”

 

“We are extremely excited about our future relationship with Goldman Sachs,” added John Rozenbroek, Chief Financial Officer at Capify. “The credit facility will enable us to continue on our growth trajectory while offering even more attractive and innovative solutions to thousands of small businesses in need of capital.”

 

David Goldin, Founder and CEO of Capify.

Real EstateWealth Management

Vent-Axia’s Energy Efficient Ventilation just the Ticket for Luxury Eco Mansion

Picture credit: © Recent Spaces

Leading British fan manufacturer Vent-Axia has been specified as part of a luxurious, £5.5m contemporary off-plan eco mansion in Kent, presently listed with Savills. The Ancona mansion in Hythe is designed to be sustainable and low impact, with three of Vent-Axia’s Sentinel Kinetic High Flow Mechanical Ventilation with Heat Recovery (MVHR) units chosen to provide quiet, energy efficient and effective ventilation and heating throughout the proposed 8,323 square foot home.

Envisaged by developer, Kelly Penson, and designed in conjunction with OnArchitecture working with energy advisors and Passivhaus consultants, Conker Conservation, Ancona is a rare opportunity in the UK to buy a luxury home off-plan. Resembling a Beverly Hills mansion but designed for the British weather, the plans show how a modern build can combine very contemporary aesthetics with sustainable living. The proposed home features cantilevered terraces with wild flower sedum grass roof coverings, three above ground floors, an indoor pool complex and gym, a master bedroom suite with magnificent panoramic sea views and a modern, stylishly-lit wine cellar.

The comprehensive Vent-Axia MVHR system, specified and designed by Built Environment Technology Ltd, harnesses geothermal temperatures for heating in the winter and cooling in the summer, all controlled via a tablet or phone. There are three ventilation zones – the garage; the ground floor including the gym and communal area between the gym and spa; and the 1st and 2nd floors, each with a designated Sentinel Kinetic High Flow MVHR unit.

“MVHR is an integral part of any Ecohome, Ancona is designed to be almost airtight making air changes via MVHR essential. Vent-Axia’s Sentinel Kinetic MVHR offers pre-conditioned air changes taking heat from outgoing air and applying it to fresh air. Ancona will be a calm, comfortable airy space which will be pollen free and help ensure good indoor air quality”, said Kelly Penson from EcoMansions. People are feeling increasing pressure from society and peers to be much more mindful of our carbon footprints and our impact on this planet. At EcoMansions we aim to provide our clients with more environmentally friendly legacies to enjoy. Our ethos is to provide luxury contemporary homes using the very best available eco friendly technology, products and materials wherever possible to provide the best achievable low energy efficiencies and therefore homes fit to endure our ever-changing climatic conditions.”

The Sentinel Kinetic MVHR units have integral humidity sensors for intelligent air quality control. The sensor increases speed in proportion to relative humidity levels, saving energy and reducing noise. It also reacts to small but rapid increases in humidity, even if the normal trigger threshold is not reached. This unique feature ensures adequate ventilation, even for the smallest wet room. A summer bypass provides passive cooling when conditions allow whilst a frost protection mode ensures maximum ventilation during the coldest periods. A digital controller is mounted on the front of the units and a remotely-wired version has also been included for each.

Ancona uses geothermal ducting that feeds into the three Sentinel Kinetic MVHR units with manual shut-off dampers included for each MVHR Unit, to provide the option of geothermal or atmospheric intake air. Geothermal ducting will provide some free cooling in the summer and some free heating in the winter, which will create a wonderful clean and healthy air quality and year-round temperature in the home. In addition, pollen filters on the MVHR will help hay fever sufferers and inhabitants suffering from other allergies such as dust. Where the MVHR air outlets and inlets penetrate the thermal envelope, appropriate insulating material has been specified to ensure minimum heat loss.

EcoMansions’ goal is to create a substantial home that costs no more to run than a normal family home, even including the existence of both a pool and jacuzzi, with a predicted A-Grade (96) EPC & SAP rated living space. The project is designed with triple glazing and a solid wall construction incorporating 100% recyclable clay blocks. Materials are, wherever possible, made from or with recyclable, recycled, sustainable, low carbon footprint materials without compromising the very high specification and performance of the home. An 8kW solar PV panel system has been included in the design to help keep the low energy house inexpensive to run and provide much if not all of the electrical energy requirements for the home. Battery banks have been specified to store excess energy from the daylight hours to use at night time.

Low carbon, energy saving and clean, Sentinel Kinetic High Flow MVHR is ideal for larger homes and offers a whole building heat recovery system combining supply and extract ventilation in one unit. Warm, moist air is extracted from ‘wet’ rooms through ducting and passed through the heat exchanger before being exhausted outside and fresh incoming air is preheated via the integral heat exchanger. The unit can extract from up to fourteen wet rooms and a communal kitchen while still achieving almost 90% heat recovery. It has two fully adjustable speeds and a purge setting and its energy saving Vent-Axia DC motors further improves efficiency and carbon reductions.

The units benefit from the latest high efficiency, backward curved impeller design, ensuring the lowest possible energy consumption, ultra quiet operation and an exceptional performance range covering small one bed apartments to the largest of houses. Recognised in SAP PCDB, the lightweight MVHR unit is simple to install with a horizontal duct option for space-saving installations and a unique folding filter for removal when access is restricted. The models can be mounted vertically in a roof space or on a suitable wall and ducting can be attached to the unit horizontally, vertically or both. Left or right-hand installation further adds to its installation flexibility.

To find out more about Ancona visit https://search.savills.com/property-detail/gblhchcks180166. For further information on all products and services offered by Vent-Axia telephone 0844 856 0590 or visit www.vent-axia.com.

FinanceInfrastructureReal Estate

Arrow Business Communications Limited strengthens its presence in Scotland with a third acquisition and new office in Aberdeen

Arrow is delighted to announce the acquisition of Abica Ltd and it’s subsidiary PCR IT Ltd.

Abica and PCR are leading providers of Telecoms and IT services with offices in Glasgow, further expanding Arrow’s presence in Scotland. Abica and Arrow have much in common as both deliver a similar range of solutions from the same suppliers to customers in all industry sectors.

Arrow identified the potential of the Scottish telecoms market a number of years ago with its purchase of Orca Telecom in 2015 and Siebert Telecom in 2017. In addition to the acquisitions, Arrow has also recently augmented its Aberdeen team and moved into larger offices in the West End of the city.

All of the Directors and employees of Abica will be staying on and will work within the Arrow group, ensuring a smooth transition for all of its valued clients. David Munro and Gregory Barnett, founders of Abica, will continue to lead a number of key customer relationships and day to day activities. Gregory Barnett comments, “With Arrow’s long history of building successful businesses in the telecommunications sector, we couldn’t be happier about integrating Abica into Arrow. It bodes well for an exciting future over the coming years”.

Abica has over 650 customers and has deployed a range of solutions covering Connectivity, Mobility, IoT, and Unified Communications for both private and public sector organisations. The recent acquisition of PCR IT brought further IT capability into its solution portfolio.

Commenting on the acquisition, CEO of Arrow, Chris Russell said: “This was our third acquisition in 2018 and becomes our largest one to date. Abica further strengthens our presence in Scotland and combined with our existing business there will create a real Scottish Powerhouse. The Abica and PCR teams have a wealth of experience in delivering solutions to customers whilst maintaining the strong relationships they have built up over the years, which is exactly how we strive to conduct our business in Arrow”.

Arrow was assisted on the acquisition by both EY and Kemp Little, with Abica being advised by Sequence Advisers and Taylor Wessing.

Arrow is also delighted to announce the acquisition of European Utility Management Ltd (EUM), an Energy broker specialising in Property Development and Management companies.


FinanceFunds

Young people suffer more with gift guilt at Christmas

Christmas is a time of giving, with the UK spending 821 million pounds on Christmas gifts, it is clear that us Brits are extremely generous. However, worryingly one in four Brits feel pressured to spend a lot more than they can afford, sliding them into debt that can last months after the festive season is over. A truly unwanted Christmas gift.

The research conducted by Peachy, surveyed 2002 people’s Christmas shopping habits and attitudes towards money; lifting the lid on the subtle differences between those of a different gender, age and relationship status. Financial woes are expected to affect a quarter (25%) of Britons due to a costly and pressurising Christmas new research suggests. To ease financial worries and enjoy celebrating the festive season Katre Kaarenperk-Vanatoa from Peachy suggests:
“If you haven’t planned your Christmas costs ahead, you’re left to buy all your gifts in one month. In these circumstances, try to shop wisely by sticking to a budget and creating a gift list. Do not compare your gifts to others and remember that it is sentiment that counts not the price. Sometimes, handmade gifts are more greatly appreciated than expensive gadgets.
Ideally, spread the costs of Christmas shopping as much as possible without adding interest to your financial worries in the New Year”

The research also showed that men spend more money than women, however, men believe they spend too much. Despite this, men still continue to shop at a higher budget. Overall the majority of men (66%) felt relaxed when browsing and buying gifts for their loved ones, felt less pressured to buy a more expensive gift and found it less challenging to stick to a set budget compared to women who were significantly more stressed and less money conscious despite on average spending less of their wages on Christmas gifts than men.

40% of 18-24 year old’s fretted about what others had bought them for Christmas and felt guilty if others had spent more on gifts than they had. Despite this, other age groups (35-44 and 55+) spent more of their wages on Christmas presents in contrast to 18-24 year old’s. Interestingly, 24% of 18-24 year old’s admit to poor budgeting at Christmas time despite 29% feeling the financial pinch in January and struggling with finances. Those 55 years old and over old found Christmas shopping too hectic and only 29% wished they could spend more on Christmas gifts.

Single people find it more difficult to budget and felt that they could not spend as much as they would like on presents in comparison to those in relationships. The study also highlighted that married couples do not enjoy spending time with their loved ones as much single individuals, people in relationships and partners that live together over the festive season. Which could perhaps be to do with the contestant chore of fraternising with your in-laws over the Christmas period! Arguably another unwanted Christmas gift!

FundsGlobal ComplianceTransactional and Investment Banking

The rise of renewable energy

You can’t deny that businesses around the world have taken a greater focus on sustainability — and although this has been damaging for some companies, it has been a great shift for others. One prime example of this is the renewable energy sector; while traditional energy markets are faltering and facing a challenging road ahead, the renewables sector is breaking records.

Although a lot of markets rely on natural resources to operate, the renewables industry use resources that naturally replenish. Collected under the umbrella term of renewables is solar, wind and wave power, alongside biomass and biofuels.

As the market continues to grow, HTL Group, specialists in controlled bolting for the wind energy sector, analyses where the renewables sector is at now:

The market’s performance

The recent years have been successful for the renewables sector. In 2016, 138 gigawatts (GW) of renewable capacity was created, showing an 8% increase on 2015, when 128 GW was added.

Occupying 55% market share and using 138 GW of power, the renewable energy sector is in the lead. Following in second place, coal created 54 GW of power-generating capacity, while gas created 37 GW and nuclear created 10 GW.

Renewables’ huge contribution to the global power-generating capacity accounted for 55% of 2016’s electricity generation capacity and 17% of the total global power capacity, increasing from 15% in 2015.

Research released by the UNEP highlighted that the renewable sector prevented 1.7 billion tonnes of CO2 in 2016 alone. Based on the 39.9 billion tonnes of CO2 that was released in 2016, the figure would have been 4% higher without the availability of renewable energy sources.

Renewable market investment

Regardless of the continued growth of the sector, investments actually decreased in 2016. In 2016, $242 billion was invested in the sector, showing a 23% decrease on 2015’s figures. This reduction can largely be attributed to the falling cost of technology in each sector.

However, this could be down to the alterations made to markets on a country-specific basis. In 2016, Europe was the only region to see an increase in investment in the renewables sector, rising 3% on 2015’s figures to reach $60 billion. This performance is largely driven by the region’s offshore wind projects, which accounted for $26 billion of the total, increasing by over 50% on 2015’s figures.

Across Norway, Sweden, Denmark and Belgium, investment seems to be strong. UK investment slipped by 1% on the previous year, while Germany’s investment dropped by 14%.

Believe it or not, investments made from China decreased from 2015’s $78 billion to $37 billion. Investment from developing nations also dropped in 2016 to a total of $117 billion, down from $167 billion in 2015. In 2016, investment had almost levelled out between developed and developing countries ($125 billion vs $117 billion).

What does the future look like?

With greater developments, the future looks bright for the renewable sector. From the falling cost of technology to societal shifts like the 2040 ban to prevent the sale of new petrol- and diesel-fuelled cars, the future certainly looks positive for the sector — even if investment has declined in the past year.

In the future, it is inevitable that the sector will overtake more traditional markets on a global scale, revolutionising how we generate and consume energy.

This article was provided by HTL Group, hydraulic torque wrench suppliers.

ArticlesCorporate Finance and M&A/DealsFunds of Funds

5 ways cognitive assistants are revolutionising banking

Martin Linstrom, Managing Director for UK and Ireland at IPsoft, looks at the next stage in technological evolution of the banking industry and how artificial intelligence (AI) will redefine banking as we know it.

 

The banking industry has made huge strides to drive innovation by investing in new technologies over the last few decades. Commercial banks first adopted telephone banking, then came internet banking and now, for most customers, all your financial services needs can be met via an app. Now, as we enter the conversational era enabled by cognitive AI, customer expectations have evolved once again.

 

Banks have long been ahead of the curve in terms of elevating the user experience for their customers and so, it’s perhaps unsurprising that many are already looking to AI-powered digital assistants and are investing in cognitive solutions to upgrade and scale customer-facing financial management processes. Many banks are also looking at how they can provide the same simple, frictionless service to their own employees. 

 

As AI-powered customer interfaces gain mainstream acceptance, we will once again see a revolution in technological change within the banking industry. So, what functions within banks will cognitive assistants transform?

 

Building a hybrid workforce

Virtual assistants have a twofold capability which is driving innovation in the banking industry. Firstly, they can be implemented in back office functions such as finance or HR and secondly, they can supplement customer service centres. Creating a hybrid workforce of human employees and AI-powered virtual assistants can help drive enormous cost efficiencies and increase staff productivity. Employees in administrative roles can pass their repetitive tasks over to their digital colleague, freeing up their time to focus on more creative or interesting work that requires soft skills whilst customer service agents can pass standard requests through an AI system leaving them with only the most complex of customer queries to deal with.

 

Ubiquitous customer services

One of the most attractive things about AI-powered customer services for banks is its ubiquity. With virtual customer service agents available 24/7 and through a variety of channels such as live message, telephone or email, it’s a win-win situation for both bank staff and customers. From a customer’s perspective, simple requests such as password resets or international transactions can be performed in an instant and there’s no need to visit the bank or spend an hour in a telephone queue to speak to a human agent.

 

Banks adopting customer-facing AI solutions are in fact seeing increased customer satisfaction rates despite removing the human-to-human contact element. For example, since implementing IPsoft’s AI solution, Amelia, SEB, a leading Nordic bank has been able to avoid 544 hours of escalations to customer support with an average handle time of six minutes. What’s more, Amelia has reached an 85% accuracy in immediate intent recognition which has meant a faster service delivery to customers and soaring customer satisfaction. 

 

24/7 banking support

Unlike human agents, digital assistants can work around the clock, seven days a week with no breaks and without tiring. For modern consumers, particularly young digital natives who expect to be able to manage their finances at any time of the day, integrating AI into a bank’s customer service centre will soon become the norm. Chatbots are already an industry standard, therefore at the very least, banks that don’t continue scaling this technology throughout their business will find themselves at a severe competitive disadvantage, trailing behind the market by delivering an inferior customer service experience.

 

Go beyond simple chatbots

Digital assistants with cognitive intelligence capabilities represent the next leap in automation for financial institutions. Digital colleagues like Amelia are now able to perform tasks above and beyond mere transactional ones, digitising more complex financial management processes such as wealth management onboarding and mortgage applications. Unlike simple chatbots, digital colleagues are also able to develop their cognitive abilities through an advanced Natural Language Interface (NLI) which can process customer queries asked in hundreds of different ways, including slang. More importantly for the banking industry, they can handle context switching so that when a customer moves quickly from one request to another, the interface is able to process both requests without starting over.

 

Many banks have already integrated voice capabilities into their finance management solutions. Customers communicate via text or voice to gain quick answers to banking questions, tailored financial advice and can even carry out transactions all from the same channel. Voice-enabled digital assistants can handle payments and transfers, credit card activation, charge disputes and travel alerts for customers at any time, freeing up customer services teams to focus on more complex customer enquiries and giving customers full control and access to their finances. Conversational AI will become more and more widely accepted as banks start to harness the technology to help drive customer engagement and operational efficiencies.

 

Delivering better insights and improved security

Unlocking key business insights is another key driver motivating banks to invest in AI. Sophisticated systems can recognise patterns from the sheer amount of data that they are processing. Thanks to these capabilities, businesses can easily find out the most common types of transactions by customers of a certain demographic and can then retarget this group for specific marketing or sales campaigns, helping to drive revenue. These real time insights can help business leaders make better, more strategic decisions that are informed through concrete data.

 

Real-time data mining can also be applied to improve customer security as many AI tools have built-in privacy and security by design. An AI-powered virtual assistant can pick up on irregular payments immediately, flagging potential “phishers” to a human agent for additional authentication. What’s more, advanced machine learning solutions can improve over time so that banks can continue to scale up their services. Virtual assistants like Amelia can go one step further by ‘learning on the job.’ Essentially, when Amelia does not understand a request or query she can pass it on to a human colleague but remains in the conversation to learn how to resolve the issue next time.

 

The future of retail banking

The financial services industry has long been at the forefront of technological innovation. Whilst many businesses are still debating whether to invest in AI, major banks are very much leading the way to invest in the technology and are thriving as a result. As virtual assistants become increasingly more intelligent and their cognitive abilities develop, the expectations for banks and the services they offer will be elevated. Banks that rest on their laurels and refuse to acknowledge this risk falling behind permanently, particularly with the slew of challenger fintech companies that are appearing on the market, offering dynamic and tailored financial services at a lower price. 

 

 

Cash ManagementFinanceFunds of FundsHedgeWealth Management

BUY YOURSELF A HORSE WITH BITCOIN

Equinox Racing is a London based horse racing syndicate like no other. Focused on delivering immersive experience to its members, Equinox Racing recently opened its horse’s shares to cryptocurrency. From now on, you can use your Bitcoins to buy yourself the thrill of horse racing and the privilege of horse ownership.

 

Rob Edwards, co-founder of Equinox Racing, commented: “There is a huge amount of capital in the crypto world, and not too many tangible opportunities out there. A lot of the people who invested in crypto, particularly in the early days, are punters. They are our kind of people!” 

 

Equinox Racing believes horse racing should not be limited to the chosen few but made available to enthusiasts and new audiences on a wider scale. Having nine horses and about 100 club members and owners to date, Equinox Racing offers a range of exciting experiences. Visit your horse at the stables, speak with the trainer and the jockey, follow his evolution on social media and support him at the race!

 

D Millard from Norwich, Norfolk (horse owner), commented: “Equinox Racing delivers fantastic days out, real prize money winning opportunities, and its stable of horses just continues to grow.” 

 

For the equivalent of £34,99 per month in crypto, which is the average price for gym memberships, Equinox Racing enables you to be part of something greater than a pair of weights. And ownership is available from £150 pounds (in crypto as well)! Thrill, suspense, joy, grace, excitement, exclusivity, are the words that describe the emotions experienced during a horse race.

 

J MacLeod from Ayr (horse owner) commented: “Simply amazing.  My passion for racing has grown now that I have affordable ownership.  I never thought I would be able to own any part of a horse with such a stunning pedigree.” 

 

Equinox Racing is currently expanding its horse’s portfolio and looking at new acquisitions. It is now the perfect time to get involved!

 

More information on: https://equinox-racing.co.uk

BankingFinanceFundsWealth Management

WisdomTree launches Artificial Intelligence ETF (WTAI)

WisdomTree, the exchange traded fund (“ETF”) and exchange traded product (“ETP”) sponsor, has partnered with Nasdaq and the Consumer Technology Association (CTA) to launch an ETF providing unique exposure to the Artificial Intelligence (AI) sector. The WisdomTree Artificial Intelligence UCITS ETF listed on the London Stock Exchange today, with a total expense ratio (TER) of 0.40%.

 

The ETF will provide investors with liquid and cost-effective access to this exponential technology megatrend that is driving efficiencies and new business capabilities across all industries globally and redefining the way we live and work.

 

Christopher Gannatti, WisdomTree Head of Research in Europe says, “We are delighted to partner with Nasdaq and CTA, who are experts in AI and technology markets. We have worked together, leveraging our combined expertise, to re-define the AI investment landscape.”

 

“To capture the full economic value of AI we place companies in three categories; Engagers, Enablers and Enhancers*. When investors think of what this can bring to a portfolio, they should be thinking over a long time horizon and about how advances like autonomously driven cars, a digital workforce, mass facial recognition and other applications of intelligent machines could change the world,” Gannatti added.

 

Rafi Aviav, WisdomTree Head of Product Development in Europe comments, “AI is a revolutionary technology and the market for AI products and services is expected to more than triple over the next three years[1]. This fund offers a unique approach to capturing this expected growth, which is the result of a year-long collaboration between WisdomTree, Nasdaq and CTA.”

 

“The fund broadly represents the upstream[2] and midstream[3] parts of the AI value chain and so balances diversification with a focused exposure on those parts of the AI value chain that stand to gain the most from growth in the AI market,” Aviav added.

 

There is no commonly used classification system that allows one to automatically choose companies engaged in the emerging AI space, so the research for the selection of index portfolio companies is conducted by experts with deep familiarity of the AI value chain and the technology markets more broadly. This ensures the portfolio remains focused on AI opportunities rather than becoming just another broad tech fund.

 

We believe the fund’s unique approach offers the best of both the active and passive investment worlds in accessing the AI megatrend. The fund’s portfolio companies are already capitalising on the AI opportunity across industries and are well positioned for AI’s growth,” Aviav commented.

 

“AI is one of the key ‘ingredient technologies’ over the next decade – deployed everywhere from factory floors and retail stores to banks and insurance offices, creating new opportunities,” said Jack Cutts, senior director of business intelligence and research, CTA. “We’ll see this play out in January at CES® 2019 – the most influential tech event in the world – where AI will be a dominant theme, showcasing the massive potential AI has to change our lives for the better. We’re excited to partner with Nasdaq and WisdomTree to make AI investible.”

 

“Artificial Intelligence is at an inflection point to drive further economic growth and create new areas of opportunity,” said Dave Gedeon, Vice President and Head of Research and Development for Nasdaq Global Indexes.  “The Nasdaq CTA Artificial Intelligence Index serves as an important benchmark for tracking the adoption of AI across a broad range of economic sectors as this influential technology hastens advancements in productivity and capacity.”

 

WisdomTree Artificial Intelligence UCITS ETF: Under the hood

The WisdomTree Artificial Intelligence UCITS ETF tracks the Nasdaq CTA Artificial Intelligence Index.  This enables investors to gain diversified exposure which is focused on companies that stand to gain the most from growth in AI adoption and performance. The index can evolve as new AI trends and companies come on stream through a semi-annual update. The Index is currently comprised of 52 constituents globally with stringent eligibility criteria:

  • Define Universe: Companies must be listed on a set of recognized global stock exchanges and satisfy minimum liquidity criteria and market capitalization criteria to be included in the index.
  • Identify and Classify: Companies are identified as belonging to the AI value

chain and classified into the following categories: Enhancers, Enables and Engagers (see below for definitions.)

  • Determine AI Exposure: The AI exposure for each individual stock is investigated and scored.
  • Top Selection: Only companies with the top 15 scores in each category (Enhancers, Enablers and Engagers) are selected for inclusion, and their weight is allocated evenly in each category.
  • Allocate Weight: In total Engagers comprise 50% of index exposure, Enablers comprise 40%, and Enhancers comprise 10% of index exposure.

*Engagers: Companies whose focus is providing AI-powered products & services.

Enablers: Companies who are key players in this space, with some of their core products and services enabling AI. They include component manufacturers (including relevant CPUs, GPUs etc.), and platform and algorithm providers that power the development and running of AI processes.

Enhancers: Companies who are a prominent force in AI but whose relevant product or service is not currently a core part of their revenue. They include chip manufacturers, and platform and algorithm providers that power the development and running of AI-powered products & services.

 

Share Class Name

TER

Exchange

Trading Ccy

Exchange Code

ISIN

WisdomTree Artificial Intelligence UCITS ETF – USD Acc

0.40%

 

LSE

USD

WTAI

IE00BDVPNG13

WisdomTree Artificial Intelligence UCITS ETF – USD Acc

0.40%

 

LSE

GBx

INTL

IE00BDVPNG13

ArticlesBankingFinanceFundsMarkets

Finding finance from start-up to listing

Mark Brownridge, Director General of the Enterprise Investment Scheme Association:

Securing funding as a start-up is often one of the biggest challenges that new businesses face in the primary stages of set-up. Not only is it often difficult to secure the funding itself, it is even more so when trying to get the right kind of funding for what the specific needs of the business are. Having structures in place to make it as easy as possible for innovative ideas to flourish and become fully-fledged is not only to the advantage of entrepreneurs and innovators.

 

One of the routes that allows this to happen in the UK is through the Seed Enterprise Investment Scheme, which offers investors tax reliefs in order to offset the higher risks involved in investing capital into start-ups. SEIS represents an alternative to start-ups from traditional finance routes such as banks that may not be willing to lend. This is especially useful for those of the small businesses that base their proposition on intellectual property as opposed to physical assets or products. These IP rich companies often have trouble finding support without physical collateral to offer as security.

 

Individuals looking to invest through SEIS can then make decisions based upon individual cases and potential rather than being held back by regulation or corporate policy. Of course, the risk still exists but with tax and loss reliefs, it is much more likely that the risk will be seen to be worth it in the eyes of an investor. Getting ideas off the ground is arguably the most important part of encouraging new businesses and creating new jobs as they grow and expand.

Luke Davis, CEO and Founder of IW Capital: Growing a business from start-up to listing is a hugely challenging proposition at each and every stage of the process. One of the most important points of this is growing and scaling the business from start-up level into a more fully-fledged entity. This jump can seem daunting for even the most prepared of start-ups and this is in no small part due to the challenges in securing funding for expansion.

Knowledge-intensive SMEs that struggle to secure funding without assets to use as collateral for loans, can benefit from schemes such as SEIS and EIS. With an industrial focus on research and development this will be key moving forward with the Governments plans to grow the tech industry. This is reflected in the increased EIS limit for knowledge-intensive companies of £2 million per year, this change has been introduced to provide further encouragement to investors to support IP-rich businesses.

Clearly supporting SMEs is hugely important for the UK economy as they represent the employment of around 16 million people, depending on who you ask, in the UK with this number currently growing at a rate that is three times faster than for big corporations. Fuelling this growth will be key moving into a post-EU economic landscape that will rely even more heavily on domestic business and job creation.

Jonathan Schneider, Executive Chairman of Capital Step: According to a nationwide study titled – A State of the Nation – The UK Family Business Sector 2017-18- family-run businesses account for 88% of all UK firms. They operate in every industrial sector across all of the UK’s regions, employing almost half of the UK’s private-sector workforce. In no small part, the UK’s family and regional businesses represent a significant proportion of Britain’s bottom line.

Family-run and regional businesses form the life-blood of the UK’s entrepreneurial landscape, and to see so many believe that the Government is not looking after this vital sector of the UK’s business community is concerning. Equally – it is apparent that the funding options available to established family-run enterprise seem to be eclipsed – in local communities – by corporate entities who have greater exposure to the most appropriate funding options. The role of the family enterprise, community SMEs and bricks and mortar productivity across the length and breadth of the British Isles must be considered a firm priority for the UK government – deal or no deal.

As both investors and entrepreneurs, we have witnessed countless examples of business owners having to give up control of their companies in exchange for funding. In many instances, even successful founders end up with a disproportionately small reward for their hard work upon exit as a result of having sacrificed too much ownership and control along the way. The Capital Step model is specifically designed to address this issue, by providing flexible capital solutions without existing shareholders having to give up ownership or independence in exchange.

Jenny Tooth, CEO of the UK Business Angel Association: We as trade bodies, policy makers and commentators bear a significant responsibility to assist UK SMEs in what will be one of the most critical periods in their business life, ensuring contingency plans, scalability options, growth strategies and immediate resilience responses to ensure their successful navigation of the seismic impact of Brexit

The UK possesses multiple geographical regions that have blooming industries outside of the capital city, something which makes the UK incredibly unique. In spite of this, a lack of accessibility to and education surrounding finance and opportunities outside of London is creating a gap between what these regions are capable of and how much they’re utilised. As 63% of all Angel Investors within the UK are based in London and the South East, it is undeniable that there is a geographically skewed funding deficit that is hindering the growth of SMEs who are positioned outside of the capital. While potential investors of differing regional demographics may feel isolated from the investing arena, the repercussions for regional SMEs reliant on this kind of funding may limit innovation and employment growth outside of the capital.
 
The UKBAA has focused a significant amount of attention on increasing regional investment, with the implementation of many angel hubs throughout the UK, especially in Northern regions. However, there is still a long way to go to fully utilise the untapped potential found within these areas. This can only be done when it is popularly recognised that there are significant investment opportunities outside of London. 

Funds

OMGTea founder reveals what happened when she faced TV’s Dragons

Katherine Swift, founder of OMGTea, went head-to-head with a panel of millionaire investors in BBC’s Dragons’ Den on Sunday night to try to secure a £50,000 investment for 7% of her green tea company.

The entrepreneur fought her way through over an hour of challenges and thorny questions, having been invited to apply for the hit TV show.

OMGTea sources the highest quality powdered Japanese green tea, which is known as Matcha and can be enjoyed hot or cold. Katherine presented the Dragons with samples of the emerald green product and told them about Matcha’s benefits – it is packed with nutrients and provides ‘clean’ energy without the jitters.

There were sticky moments when one of the Dragons opened their bottles of OMGTea Iced Matcha without following instructions, and questions arose over the green tea’s health benefits. But, undeterred, Katherine describes the whole experience as “amazing and beneficial”.

Katherine says, “To be invited to apply for the programme was wonderful”. It was a tough process but also extremely valuable to be able to talk about our OMGTea products and a market that is on the brink of exploding. The global Matcha market is already valued at £2 billion and is expected to reach a staggering £4.1 billion by 2023.

“That said, Matcha tea is a relatively new product in the UK and three of the five dragons didn’t know what it was or grasp the difference between it and other teas, so it was a tall order to expect them to invest in a business that specialises in a product they were unfamiliar with. 

And she smiles, “When Touker spilled his drink, I did hold my breath but I promise this won’t happen if you twist then press and then shake as you should, before removing the cap. The bottles are easy to use and are a fabulous way to drink on the go, which is what more and more people wish to do.

“Also, Deborah questioned me about Matcha’s health benefits and my personal story. To be clear, I’m passionate about robust evidence-based health benefits and we are doing what we can to help validate these and whilst early independent research into Matcha tea potentially halting the growth of breast cancer stem cells is extremely promising, we are committed to going to the next stage to validate the results further. I am extremely proud of what I have achieved”

Indeed, the research carried out at the University of Salford shows that Matcha green tea may have significant therapeutic potential, by mediating the metabolic reprogramming of cancer cells. Studies are ongoing and OMGTea will continue to work closely with one of the world’s leading micro cell biologists, Professor Michael Lisanti.
The scientific team at Salford University, led by Professor Michael Lisanti, has been working on a breast cancer study for over two years. Katherine Swift met Michael whilst project managing a major UK breast cancer research appeal back in 2010, spurred on by her mother’s stage 3 breast cancer diagnosis. OMGTea supplied the high grade Japanese Matcha tea for the purposes of the study. 
Katherine has been dedicated to supporting research for the disease which affects one in eight women in the UK*, and founded the charity Healthy Life Foundation to raise funds to support ground-breaking research into age related diseases. 

“Katherine was the driving force behind this study and donated the necessary product for testing,” said Michael Lisanti, Professor of Translational Medicine at Salford University. “I have always been interested in natural products for cancer prevention and/or treatment so to finally have this positive research which confirms the effects of Matcha green tea on breast cancer stem cells is a very important first step forward. 

“Matcha green tea fits very well with our interest in natural products. Our finding could also help explain why lifespan in Japan is among the highest in the world. I was very surprised that the Dragon’s had little to no knowledge about the potential health benefits of this natural compound that is growing massively in popularity as people’s interest in ‘naturally healthy’ explodes”.

Research aside, the market for healthy drinks is booming. Leading retail trade magazine The Grocer notes that tea is now the only sector of the hot beverages market in growth, with sales soaring by 3.5% to £641.7m in the past year (Kantar Worldpanel 52 w/e 21 May 2017). This is down to the premiumisation of the category, with green, herbal and fruit teas being the only growth segments in the overall tea category.

The Grocer also points out that there’s been an 8% increase in the past two years in the number of people who will pay more for quality tea, now standing at 31%. Among 25 to 34-year-olds, the figure rises to an impressive 44%. 

This is no surprise to Katherine, as naturally healthy drinks have been sharply rising in popularity since she founded the business in 2014. Euromonitor research (Naturally Healthy Beverages in the United Kingdom, May 2017) from last year shows that there is an ongoing health and wellbeing trend in the UK, with consumers focused on products that are free from sugar and artificial ingredients.

Katherine comments, “Naturally healthy ‘other’ hot drinks, which OMGTea falls under, recorded the highest growth of 37% in value sales in 2016. And the consumption of naturally healthy beverages is set to increase at a compound annual growth rate (CAGR) of 4% in value sales at constant 2016 prices over the forecast period to reach sales of £3.5 billion in 2021.

Among the largest categories, Naturally Healthy Tea will record the highest growth rate of 10% in value sales. Within Naturally Healthy Tea, naturally healthy green tea will be the main growth driver, with sales stimulated by the increasing popularity of RTD green tea in helping to control weight.

“I may not have walked away with the investment but I am confident that OMGTea has a very strong future – since filming the show we have launched in several new retailers including Harvey Nichols and Caviar House and we are launching in Ocado imminently. Having survived the Dragons’ Den, I now feel I can do anything and am excited about the future. “As for the Dragons? I think they will be kicking themselves in future…”

Corporate Finance and M&A/DealsEquityFinanceForeign Direct InvestmentInfrastructure and Project Finance

Mobeus invests £9M in fast-growth customer experience specialists, Ventrica

Ventrica, a European, award-winning, outsourced contact centre, has attracted a £9 million investment from Mobeus Equity Partners. Ventrica provides intelligent, multi-lingual and omni-channel outsourced customer service to a range of global ‘blue-chip’ brands.

“Ventrica is right in the sweet spot for the growing outsourcing contact centre market”

Southend-based Ventrica was founded in 2010 by Dino Forte and has undergone rapid growth, doubling in size over the last two years. Ventrica is an innovation leader in the changing sales and customer service sector. As e-commerce continues to grow, especially in the retail space, and customers expand their communication channels from the phone to email, social media and webchat, companies are increasingly looking to specialists to provide around the clock customer-facing support. Ventrica works closely with its clients, leveraging its people, technology (including support for Artificial Intelligence and Automation) training and resourcing expertise to provide a high quality service, across multiple channels, that supports their brand and their values. 

Ventrica is already one of Essex’s top employers and now plans European expansion

Ventrica is a key employer in Southend and in 2017 the company launched a second site in the town. Employing over 450 staff, and growing to 600 this year, it is one of the town’s major private employers. With support from Mobeus, the company plans further investment to expand its footprint in the UK and Europe to support its growing multi-lingual client base that serve customers across global markets. However the strategy is to remain medium-sized.

Danielle Garland, Mobeus Investment Manager, said, “Ventrica is right in the sweet spot for the growing outsourcing contact centre market – it is large enough to deliver multilingual and leading-edge technology solutions to its blue-chip clients but small enough to be dynamic and innovative and to provide the personalised service its clients require. As more clients onshore back to the UK, Ventrica is very well placed to continue to deliver very strong growth.”

Dino Forte, Ventrica CEO, added, “Mobeus stood out as the right partner because of the team’s immediate enthusiasm for, and deep understanding of, our offering at Ventrica. We have a significant market opportunity and are winning new customer contracts at an increasing rate and of an increasing scale. With Mobeus as a partner, we are well positioned to strengthen our team to support our significant growth whilst also allowing us to better focus on our existing clients which will be our key priority moving forward. 

Mobeus Partner Ashley Broomberg worked with Danielle Garland who sourced and led the transaction on behalf of Mobeus. Guy Blackburn, Mobeus Portfolio Director, has joined the board to support Ventrica in achieving its full potential. Dino Forte was advised by Sarah Moores and Rob Dukelow-Smith (Forward Corporate Finance). 

Inheritance Tax
Family OfficesIndirect TaxInheritance TaxReal Estate

Number Of Retail Investors Seeking IHT Advice Set To Rise

Advisers highlight expected increased use of flexible IHT solutions for clients

More than three out of four (78%) financial advisers expect the number of retail investors seeking help for IHT planning to increase over the next three years, according to new research from TIME Investments, which specialises in tax efficient investment solutions.  The findings come as IHT receipts hit a record £5.2 billion in 2017-18 despite the introduction of an additional nil-rate band.

Six out of ten (63%) advisers also predict an increase in the number of IHT products and investment solutions to be launched in the UK.  However, whilst this will offer more choice to investors, it also comes with a health warning – 88% of advisers questioned are concerned that new products will be launched by firms that don’t have the appropriate track record and/or expertise.

Two thirds of advisers predict an increase in the use of Business Relief (formerly known as Business Property Relief) over the next three years to help people reduce their IHT liabilities.  To encourage investors to support UK businesses, the Government allows shares held in qualifying companies that are not listed on any stock exchange and some of those listed on AIM to qualify for Business Relief. This means that once owned for two years, the shares no longer count towards the taxable part of an inheritable estate and are free from inheritance tax at point of death.

The accessibility of Business Relief investments and the range of investment opportunities available help to provide flexibility in IHT planning.  Three quarters of advisers felt that the increasing use of Power of Attorney due to rising dementia rates would contribute to the growth in the use of these flexible IHT solutions.

Henny Dovland, TIME Investments’ IHT expert comments: “The number of families in the UK being caught in the IHT net is increasing.  This represents a significant opportunity for advisers specialising in IHT and intergenerational planning and is reflected in our findings that reveal more specialist products are set to be launched in this market. However, care needs to be taken to ensure any new solutions are fit for purpose.  Our specialist team has a track record of over 22 years in this complex area.”

For further information on TIME Investments and its range of products, please visit www.time-investments.com

vc funds
Equity

Build a better VC and founders will beat a path to your door

More capital seeking hard and fast returns

With returns from traditional asset classes eroded by low interest rates, there’s plenty of dry powder looking to ride the tech wave while it lasts. Amongst the riskier asset classes, (notwithstanding the cash flooding into cryptos and ICOs), VC is becoming an increasingly attractive destination for capital seeking hard and fast returns.

As an indicator, VC assets under managements have tripled in just 3-4 years, while corporate venturing is back with a vengeance. Pitchbook data also shows that recent VC vintages are distributing capital back to LPs at a much faster pace than older ones, as well as carrying down more than 70% of their capital by the third year of investment.

Compared to the return timelines of adjacent asset classes, one can see why VC presents an attractive alternative, especially with the average Private Equity fund taking a staggering nine years to achieve a Distribution to Paid-in Capital (DPI) of 1.0x.

The ‘Halo Effect’ of traditional venture capital

Fund performance data shows only a dozen of the top VC firms generate consistently high profits. Between 3-5 percent of firms generate 95% of the industry’s profits, whilst the big name funds in the upper decile rarely change.

In a world where these firms are only as good as their last unicorn, this creates a ‘halo effect’ around a handful of well-known, long-standing funds, making it much harder for new entrants with no track record to attract exceptional founders. Meanwhile, a VC fund requires a 3x return to be considered a good investment by LPs, creating a lot of pressure to identify outliers and invest in “fund returners”.

So what defines a VC fund’s success? Is it all about picking winners? Do the top funds have a magic-8 ball to predict the next big market, or the hottest new tech? Or are markets there for the taking, with interest from the top funds compounding valuations through a self-fulfilling prophecy? Surely, it’s all down to the agency of brilliant founders, who gravitate towards the funds with the most capital and the best advice?

VC’s differentiation challenge

While it is hard to assess the additionality of advice over cash, at a later stage, picking winners is notably easier: more mature startups are typically generating revenue (though still unprofitable) and have moved beyond the most uncertain market and product development stages. The odds of a successful exit are also higher, with average loss-rates down to 30% and shorter holding periods (six years, on average).

However, it is also harder for funds at this level to differentiate themselves and attract the best founders looking for the ‘smartest capital’ (cash + advice), although normally it defaults to whichever fund offers the highest valuation. So “if the pound in my pocket is no different to the pound in yours”, how can funds articulate their ‘value add’?

Scanning websites of the best-known funds, they highlight their talent network and team of GPs, but it’s the fund’s track record that stands out, but in practice, the additionality of cash plus advice is extremely intangible.

Since 2009, a handful of US funds, (most notably Andreessen Horowitz) have started to buck the trend, working harder for their portfolio, hustling for them, providing introductions to their network of customers, acquirers and next round money. At the same time, the rise of the micro-VCs (investing across the pre-Series A spectrum) has also crossed the channel into the UK and Europe. However, instead of following an identikit model, these funds are finding a better way…

The earlier the better?

Considering the circumstances, investing earlier makes a lot of sense, not least for pursuing fresh pastures, but also for the most capital efficient returns, where investors can justify a higher reward for the increased risk they are taking, following on relentlessly in the winners of each portfolio.

However, the risks aren’t trivial, and according to Pitchbook, the loss rate amongst pre-series A startups is greater than 65%. Mark Suster, an investor at Upfront Ventures, captures this in his “1/3, 1/3, 1/3” principle: He expects one-third of his investments to be written down to zero, one-third to return the principal, and the remaining third to deliver most of the returns.

There’s no shortage of microfinancing available to pre-seed (“idea” stage) startups (crowdfunding, ICOs, angels, grants, accelerators), but it takes more than just cash + advice to build a rocket, and traditional VC funds are not set up to operate at this level.

Breaking the “two and twenty” model

While accelerator models attempt to plug the gap, investing small amounts of cash, and providing advice via their support networks, they don’t provide startups with the rocketfuel they need. There are also more sophisticated ways of investing than placing small cheques on lots of different bets. VC can add a lot at this level, but at pre-seed and seed, the traditional venture capital model breaks down for three main reasons:

  1. From a risk-return perspective, fund economics don’t work. For most funds, it would require an unmanageable number of deals to beat the odds of a 35% success rate, and still return 3x to the the fund.
  2. The traditional VC workflow doesn’t scale: a handful of GPs/investors receiving polished pitch decks and warm introductions from well-networked founders stands in stark contrast to the thousands of “idea stage” submissions, and systematic screening efforts required. There’s a huge amount of serendipity involved, and this needs to be ‘designed in’ at scale.
  3. Most importantly, startups at this stage require more than just cash + advice. Founders need help to build stuff, and that requires resources most funds can’t sustain out of the traditional two and twenty model.

De-risking through operational support

At Forward Partners, we believe there’s a better way to support early stage founders. Charging a higher management fee to LPs (the percentage of their investment that contributes towards a fund’s operating expenses) unlocks a unique value-add in a team of operators. This allows funds to offer tech, growth and product expertise as well as the hands-on help that founders need in their first year of operations.

By offering a ‘scale up team in miniature’ with experience across UX, design, full-stack development, talent, growth, PR and comms, a VC can truly help to mitigate the mistakes made by early stage startups, build stronger foundations for startups.

About Forward Partners:

Forward Partners is the UK’s leading early-stage VC fund, providing a game changing combination of capital and operational support to supercharge tech startups. Our unique model is helping to build the UK’s next generation of talented AI, e-commerce and marketplace businesses.

crowd funding
FundsFunds of Funds

Top Five Crowdfunding Myths

Top Five Crowdfunding Myths

Joel Hughes, Head of UK and Europe at Indiegogo

Launching a crowdfunding campaign is a lot easier said than done. It takes a lot of effort before the launch, during the campaign and even after funding is complete. Despite the fact that crowdfunding has been around for almost two decades, there are still many misconceptions about what makes a successful campaign, so before you launch your crowdfunding campaign, make sure you have all your facts straight. Joel Hughes, Head of UK and Europe at Indiegogo, debunks the five most common crowdfunding myths.

Myth #1: A good idea is enough to get you funded

Reality: Having an interesting idea is often just the tip of the iceberg when it comes to crowdfunding success. There are thousands of active campaigns for all sorts of gadgets and products across multiple crowdfunding platforms at any given moment.

To reach your goal, you need to develop a plan of action to spread the word about your campaign. Don’t restrict this just to your immediate network of friends and family. Make sure that everyone and anyone knows about it. There are tons of ways to spread the word including social media channels, direct emailing, LinkedIn networking events, and more. If you combine a few of these methods you’ll reach more people, so mix it up!

Myth #2: The work starts when the campaign starts

Reality: Crowdfunding requires hard work long before launch. You can’t just post a description of your project on the campaign page and expect backers to be willing to invest. You need to have all your ducks in a row before you launch.

We recommend beginning work on the campaign at least two months before your official launch date. This is the minimum amount of time needed to create a strong email list and build a community around your idea – two essential factors in your campaign’s success. Use this time to do your research, have a schedule, gather a strong team, define roles, and line up all your assets before your launch. If you prepare well in advance, you’ll be able to work in an efficient manner for the duration of your campaign.

Myth #3: It’s all about the money

Reality: A successful campaign isn’t about just reaching your funding goal. Crowdfunding offers more than just a boost in finances. It’s a great way to validate your idea and generate some buzz.

Crowdfunding is changing how entrepreneurs and innovators are bringing products to market. It is enabling thousands of innovators to generate brand awareness and facilitate a larger conversation with backers and potential customers, all while still in the product development process.

Myth #4: All crowdfunding platforms are the same 

Reality: There are a wide variety of platforms that you can choose from, so you need to understand the nuances between them in order to identify which one is best for your project. Choosing the right crowdfunding platform is important to the success of a crowdfunding campaign in converting people who view your campaign into backers.

Be sure you research what each platform offers, including fees, flexibility, customisation and support to help you run a successful campaign. Depending on your product, there may be some platforms that are more appropriate than others. Another factor to consider is the fundraising model each platform uses as there are several available, including rewards, equity, donation, hybrid, and lending.

Myth #5: A big social following is required to be successful

Reality: Social media is a great way to spread the word about your crowdfunding campaign, however, it’s not the only way.

The fundamental key for effective outreach is engagement. When planning your outreach strategy, keep your request as personalised as possible in order to increase the chance of a contribution. Email, for example, is often a more effective way of reaching contributors because it’s direct and personal. Avoid sending mass ‘BCC emails’ and instead send individually tailored messages. Whilst this might take more time, it’s likely to result in more contributions.

Regardless of your assumptions about starting a business, the most important thing to remember is that crowdfunding is much more than a months’ long campaign to reach a funding goal. It can also be used to raise awareness amongst consumers and for market validation. There are a plethora of factors to take into consideration before launching a campaign such as who’ll be part of your team, what incentives you’ll be offering your backers and how you’ll be building your database of contacts. Once you have your assets all lined up and you’re ready to go. It’s time to click the ‘launch’ button and dispel the crowdfunding myths once and for all.

 

housing investment
FundsReal Estate

Real Estate Investments Delivering Mixed Fortunes

Real Estate Investments Delivering Mixed Fortunes

Statistics from the Office of National Statistics, released this February, have shown what many experts in the property sector had been discussing for some time. With prime central London districts in desperate need of further housing, investments into this area would seemingly be a ‘no-brainer’. A large influx of property developers should be praised however it seems that their market positioning hasn’t left them in as good stead as they would have previously hoped.

It seems that many of the developers lost sight of their main audience for the projects and have left themselves in a precarious situation.in need of housing, but this housing has been developed at a price point far above the limit of those who in need of it. As planning applications frequently go to the highest bidder who has large-scale profits ahead of the need to provide ample housing.

Potential doubt over the impact that a lack of impetus from foreign investors will have across the sector, has been the topic of much speculation. With findings published by Land Registry supporting the idea that foreign investors are “shying away from the capitals market”. The figures show a 55% decrease in the number of high-end new build homes sold in London’s most select areas.

In fresh statistics (February 2018) paint a good picture of the UK market, where over the course of 2017 house prices rose by 13.7%, increasing the average UK House price to £258,580. The largest increases were found in Cambridge and the Orkney Islands at 15.7% and 18.2% respectively. These figures do not spread down into the South East where the housing market is traditionally most prosperous.

Of the areas which demonstrated the sharpest decrease, three of the top five are in Greater London, of which two are historically the most affluent areas of London in The City and Kensington & Chelsea with respective decreases of 5.3% and 10.7%. The house prices in these areas have fallen due to the trend of high-end ‘ultra-luxury’ property remaining unsold for long periods of time has been. Analysis from Hometrack has shown

Market analysis from Hometrack demonstrates how figures representing changes in asking price to agreed sale have increased as home-owners continue to take more off the value of their property to increase the likelihood of a completed sale. Over the past 4 years in central London this figure has “grown from 0.5% in 2014 to 4% today, with discounts of up to 10% registered in inner London.”

This downturn in sales has affected all parts of high-end London housing as a report by Mayfair agents demonstrates. There is a recurring pattern of exclusive housing with no residents. This couldn’t be seen in a more exaggerated fashion than when looking at The Shard, this famous building remains in the headlines for its incredible architecture, however, the infamous apartments at the top of The Shard remain unsold almost 5 years after they were initially put on the market. This is at a considerable cost of over £50m. This isn’t a unique situation, as in London alone, almost 2,000 apartments valued over £750,000 remain unsold over a year since their initial entrance into the market.

As Land Registry figures show that since the financial crash of 2008, property values have stuttered in their ability to regain the peak they hit prior to 2008. Over 10 years have passed since this peak and relatively poor performance can be seen when filtering the results by months with the highest rate of completed property sales, from 1995 onwards, there is only one single month post 2008 that features in the top 100.

This trend isn’t exclusively a problem in the United Kingdom. Prime real estate markets across Europe and the United States have suffered a fall in demand leaving the most ostentatious of properties without residents, in what the Financial Times describes as “the five-year global boom…. .appears to be ending in a global glut”

Investing in Macro Trading - Investing for the Future
FundsHedge

Investing in Macro Trading – Investing for the Future

As a company we focus on a few core areas: economics, research and multi-asset. We are veterans of all recruitment styles, networking to generate references, advertising to create interest, directly contacting candidates and cold-calling businesses to uncover talent.

Our research staff focus on blue-skies analysis and researching teams at places such as the IMF or ECB in the public sector. This broad background work means we are fully prepared before major searches begin at which point the research can be tailored to each project.

Our senior consultants focus on the ‘selection’ stage, luring out top talent and ensuring the quality of shortlists to make certain candidates are fully briefed and motivated by opportunities.

In regards to our clients we are largely referred on by existing customers so the word of mouth is clearly a vital factor behind the success of our business. Run by a former economist and trader we can offer unique insight into candidates, and are unique in parting the sector by ‘macro’ skills rather than by firm type. We can attract established names who can raise capital and further provide alpha driven performance in a variety of environments.

Macro is supposed to be low correlation and offer superior returns, but there are many funds managing money that have failed to prove that. However the top tier continues to do well and inspire investors and the inevitable imitators.

Macro investors are increasingly reliant on quant signals and models, but it has been no real replacement for traditional fundamental analysis and use of expert judgement.

If we take a closer look at the industry currently underperforming firms are threatening the top end fee structure. But there is also increasing impetus on risk adjusted performance metrics which shouldn’t necessarily apply to alternative managers, in some ways these deter the narrowly focused trading strategies which enabled past out performance.

Looking ahead to the future finding consistent performing portfolio managers will be a key challenge as only the top 3rd of the sector have produced credible results.

Company: Arbitrage Search
Name: Chris Apostolou
Email: [email protected]
Web Address: www.arbitrage-search.com
Address: 48 Charlotte Street, London, W1T 2NS
Telephone: 0203 823 4540

Champion for Public Health
FundsMutual

Champion for Public Health

Steven Jonas of Stony Brook Medicine tells us more about his life.

“My ‘firm’ is located at my home office. I am a life-long writer. In the course of my 40-plus year-long career I have authored, co-authored, edited and co-edited 36 books (see my book-list on Amazon), as well as numerous columns/articles in the lay and professional periodical press. Although technically retired, I have not stopped writing and continue to do so in a variety of venues, on a variety of subjects.”

Recent successes for Steven include the publication of his 36th book, “Ending the ‘Drug War’; Solving the Drug Problem: The Public Health Approach.” The basic argument is that all of what he calls the Recreational Mood-Altering Drugs (the RMADs) — beginning with nicotine and alcohol, the two most harmful of them — should be treated in the same way.

To control/regulate their use so that their negative health effects can be significantly diminished, we should follow the model of one of the most successful non-communicable disease control programs ever, the U.S. National Smoking Cessation Program. Indeed, over time it has reduced the adult cigarette smoking rate in the United States from 45% in 1964 to 18% presently. And guess what? It hasn’t locked up one cigarette smoker. In the meantime, the “drug war” has had virtually no effect on the use of the “illicits” at which it is aimed.

Steven is his own boss. From chief cook and bottle washer to the single author of the firm. He describes the most immediate opportunities and challenges that lie ahead for him.

“The useless, indeed very harmful, ‘Drug War’ is about to be re-intensified by the incoming United States Attorney General. It has been enormously expensive since it was started by President Nixon in 1971, has been ineffective in controlling the use of the RMADs at which it is aimed, and had locked up hundreds of thousands of non-violent drug users.

The current drug policy reform movement focuses primarily on legalising marijuana. My proposal deals with bringing the use of all of the RMADs under control. By using tried-and-true public health methods it can be successful, at much less financial and social cost. I look forward to working with other interested parties, in my own country and internationally, to develop and implement the Public Health Approach to the Drug Problem.


Steven Jonas, MD, MPH, MS, FNYAS Professor Emeritus, Stony Brook Medicine Dept. of Preventive Medicine and the Program in Public Health Stony Brook University c/o 450 Rte. 25A, PO Box 843 East Setauket, NY 11733 email: [email protected] Tel. + 1 631 473 7228 FAX + 1 631 473-5005

Keeping Your Options Open
FundsHedge

Keeping Your Options Open

Third Friday Management, LLP is the investment manager of The Third Friday Total Return Fund, L.P. (the ‘Fund’). The Fund was founded in May 2007 and follows a proprietary rules-based market neutral options strategy designed to generate strong risk-adjusted returns in all market environments. The Fund does not employ leverage and does not take a view on market direction. Excess collateral is invested in a diverse portfolio of income-generating securities.

The Fund sells at-the-money straddles on the S&P 500 Index on a 3-month rolling basis and hedges those positions with out-of-the-money puts and calls. Each straddle is hedged independently and the hedges are adjusted throughout the cycle to maximise profitability or minimise losses. At all times the Fund focuses on protecting capital and insuring
that the first two months of the sequence are fully hedged. The strategy was initially developed in the 1990s and managed in separate accounts. The Fund was started as a family partnership and offered to outside investors for the first time in 2012 when Michael Lewitt joined the General Partner. Since 2012, the Fund has grown significantly while continually working to improve its investment strategy. 

The Fund is available for US investors through a Delaware LP and non- US investors through a Cayman Islands entity. The Fund has never had a money-losing year and was slightly positive in 2008. In addition to strong and consistent nominal returns, the Fund’s risk-adjusted returns are particularly strong with low correlation to the S&P 500, a high Sharpe Ratio, Sortino Ratio and other impressive risk metrics.

A unique aspect of the Fund’s strategy is that the 3-month structure of the options means that rare losing months coincide with widening options premiums. When a losing straddle rolls off, the Fund is in a position to sell a new straddle 3 months out at a wider premium. This sets up the Fund for higher profits and rapid recovery of losses in the following months. As a result, it is very difficult for the Fund to suffer large sustained drawdowns or losses – a unique feature of the strategy that sustains strong risk-adjusted returns over long periods of time.

Michael Lewitt serves as the Chief Investment Officer of the firm and General Partner and Portfolio Manager of the Fund. Mr. Lewitt is also the editor of The Credit Strategist, a financial newsletter that is widely read around the world, and is recognized as one of the few investors to correctly predict the 2001-2 credit crisis and 2008 financial crisis. He is the author of two well-regarded investment books, The Death of Capital (2010) and The Committee to Destroy the World (2016). Mr. Lewitt is a long-time critic of the mainstream financial media and consensus policymaking thinking and uses his writing as an integral part of his investment process to formulate independent views that have produced top tier performance for his clients over the last 25 years.

Company: Third Friday Fund Management
Name: Michael E. Lewitt
Email: [email protected]
Web Address: www.thirdfriday.com
Address: 515 N Flagler Drive, Suite 300, West Palm Beach, FL 33401

Libero Development Fund: Absolute Excellence in Absolute Returns
FundsFunds of Funds

Libero Development Fund: Absolute Excellence in Absolute Returns

Libero Funds was developed through a combination of over 50 years’ experience in Alternative Assets Services, Funds and Financial Services and a deep frustration with poorly performing market correlated investment strategies. In 2012, Mary Murphy (Former Executive Managing Director of IFS) and Iain Cahill decided to create an investment strategy which is low risk with low volatility but generates strong returns in all market conditions.

This strategy became the Libero Development Fund, an absolute return offering with a pioneering strategy which Iain is keen to explain.

“Our Libero Development Fund strategy is truly unique in how it is structured and operates. It is designed to achieve consistently positive returns with low risk and low volatility. Based on the fund structure and key risk management policies, and agreed with the Auditors, the Fund only recognises income earned. By not recognising unrealised gains the monthly NAVs reflect actual income earned by the Fund.

“Overall we see our fund as having the potential to aid other funds who hold large cash balances and are concerned about deploying them in the current market environments. As we all know from the moment investor capital is raised, we have a duty of care to both protect their capital but also have it working. Libero can help to bridge that gap for other fund managers.”

All of Libero’s funds are offshore, non-US investor, funds that offer a flexible framework with several funds for experienced investors who include Family Offices, Fund of Funds and Sophisticated Investors who are seeking a real alternative investment to cash or bond equivalent low risk strategies while at the same time seeking strong capital growth or income. Iain explains how the firm supports clients and ensures that its investment products meet their individual needs.

Key to how Libero Funds work, is listening to investor requirements and working with experts in all aspects of the funds operation. The fees charged by hedge funds are still a focus for investors and that challenge is a fair one. However, ultimately the onus is on any Fund to first deliver a fair return to investors, and as such we aim to offer the best risk adjusted returns possible.

“As a growing fund our time is spent between fund raising and investment management. While our internal investment team make the day to day trading decisions, we maintain full oversight on the activities. As any investor in a hedge fund should expect, we took the time and effort to ensure that our service providers are best in class which allows us to spend a great deal of our time with both existing and prospective investors. With such a vast array of funds in the market, our ongoing challenge is to create the right investor attention through strong returns which are low risk and with low volatility.”

Owing to investor demand, Libero have recently launched a complementary second fund, the Libero Growth Fund which seeks to create an important offering for those looking for a more mezzanine type fund and is already garnering significant investor interest. As such the future looks bright for Libero Funds, and in his concluding comments Iain outlines the firm’s exciting future plans and how it aims to ensure that clients continue to receive the best possible returns and service across all of the firm’s funds.

“During 2017 at Libero Funds we intend to grow our Libero Development Fund strategy and deliver additional Fund strategies where we see opportunities driven by investor demand. For now, Our driving ambition is to see the Libero Development Fund become a true benchmark fund within the Absolute Returns sector.”

Company: Libero Development Fund
Name: Iain Cahill CIO and Mary Murphy COO
Email: [email protected], [email protected]
Web Address: www.liberofunds.com
Address: 33-37 Athol Street, Douglas, Isle of Man, IM1 1LB
Telephone: 0044 7496 057894

The Dawn of Major Technological Breakthroughs in Cancer Medicine?
EquityFunds

The Dawn of Major Technological Breakthroughs in Cancer Medicine?

Specifically, within the private equity space, what services/funds do you offer?

Our funds offer investors an opportunity to invest in well managed, selected emerging breakthrough companies with high projected revenue growth in biotech and technology with an upcoming projected liquidity event typically 1-3 years out. We focus on hard to source but well known exceptional growth tech companies.

How does it feel to win this prestigious award?

It feels great and I am thankful to Wealth & Finance International for their recognition and the award and appreciate their support of our industry!

What do you feel is the secret behind your firm’s success?

The secret is nothing new. Finding great companies to invest in. Putting in the hard work to help these companies, surrounding yourself with those smarter than you in your areas of weakness, learning from those smarter than you, being humble and building great relationships that last was instrumental to our firm’s success.

Formulas change, investment strategies change but relationships don’t and neither does having a good heart and great integrity. I also learned that it is important to sell what sells. Just because you have a great investment strategy doesn’t mean people will invest in it.

What is your firm’s mission and what steps do you take to achieve it?

Our firm’s mission is to help eradicate cancer and invest in human progressive endeavours. We can do this by helping and investing into great companies with strong management teams and by working side by side with companies and being an integral part of the management team. Our work at Genprex will continue indefinitely and we believe it will become a major game changer in the cancer biotech industry. We believe mankind is at the beginning of the Great Age of Biotech.

I think Genprex could be a global leader in cancer gene therapy. Dr. Jack Roth, the inventor of Oncoprex is a gene therapy pioneer and leading lung cancer surgeon so supporting him, the officers and the company during this development phase was key to its current success. The potential to save and improve the lives of millions of cancer patients around the world is an honour and a major responsibility at the same time. Please give us an overview of the private equity industry in your region currently. What are the major challenges and opportunities you encounter? The venture capital and private equity markets in Seattle is very vibrant and busy. We have amazing tech and biotech start-ups emerging from Seattle all the time and it is a hub of the tech titans from Amazon, Microsoft, Facebook, Google and so on.

For the most part start-ups are getting funding for great ideas and startups are more focused on the bottom line than they have previously. The ability to scale with technology and the lowering of operating costs due to Amazon Web Services and Azure has helped many tech start-ups control costs and cash burn and helped move into profitability quicker. Talent has never been better as very smart entrepreneurs either graduate or leave established companies looking to fill niche areas in the marketplace and tech scene. Major opportunities that I am focusing on moving forward, in my opinion is biotech and space endeavours.

The Cosmos and the Microcosm present equal challenges and major opportunities. Biotech has a faster ROI but ‘space’ has infinite revenues. I can’t speak glowingly enough about Elon Musk and SpaceX’s mission.
It reminds me of the Vanderbilt’s construction of the railroad system in the 19th century. The railroads created new commerce hubs and major cities thus expanding the GDP of the country and SpaceX is fulfilling the same destiny but for interplanetary commerce, colonisation and ultimately building whole new global sources of GDP. SpaceX is building railroads to the stars and when you map out the potential revenues, one can see that infinite revenues are possible in the longer terms and that growth looks potentially unlimited. This is the first time I have ever used the infinite symbol when describing long term revenue growth. In my opinion, SpaceX could be the first trillion-dollar market cap company, if not the first, one of.

What does the future have in store for your business? Do you have any specific projects or plans you would be willing to share with us?

Genprex will keep me busy for a long time, as will working on my foundation and managing our VC funds. Cancer has been exceptionally difficult to treat due to the thousands of different genetic mutations of cancer. Humans are waging a major molecular biological war. I believe we are on the cusp of major technological breakthroughs in cancer medicine. These innovations will also give us the ability to eradicate most cancers or control them within the next 25 years. Immunotherapy, regenerative medicine, gene therapy, gene editing, stem cell therapies and robotics will all play a role in helping treat the 10,000 diseases that afflict the human body.

We are also planning a documentary on Genprex, biotech start-ups and on the cancer biotech industry later in 2017, chronicling the Genprex story, our journey and to support the fine men and women at our hospitals and research centres, trying to find the cure and to ultimately destroy or control cancer, once and for all.

Do you have anything you would like to add?
Yes, look for Genprex’s (GPRX) IPO in late Q1 on Nasdaq, invest in us if  you believe in our mission and company and to follow our story.

Name: Viet Ly
Email: [email protected]
Web Address: www.inceptionfunds.com; www.genprex.com
Address: 5400 Carillon Point Road Building 5000, 4th Floor Kirkland, WA 98033
Telephone: + 1 855-22-FUNDS

ClearlySo Launches ATLAS Impact Assessment Solution for Private Equity and Venture Capital Investors
EquityFunds

ClearlySo Launches ATLAS Impact Assessment Solution for Private Equity and Venture Capital Investors

ClearlySo ATLAS helps private equity and venture capital investors assess the social and environmental impact of their investments and provides practical suggestions for action. Research increasingly shows that there is a positive correlation between impact and financial return, and lack of awareness about negative impact is a risk.

The methodology ClearlySo ATLAS uses to assess impact combines current best practices, industry-wide expertise and years of in-house experience developed at ClearlySo. Private Equity Reporting Group, Principles for Responsible Investment, European Union Directives and Red Line Voting are all considered and the results are mapped to the UN Sustainable Development Goals ensuring investors engage with the latest market expectations.

Luke Hakes, investment director at Octopus Ventures commented: “We are delighted to be working with ClearlySo to assess the social and economic impact of the companies we back. We are incredibly proud of our portfolio companies which include Antidote and Big Health and the brilliant work they do in their respective sectors. We know that High Growth Small Businesses have a disproportionately high impact on our domestic economy and we are excited to be able to work with ClearlySo to analyse the impact of our venture capital investments.”

Further commenting, Lindsay Smart, head of impact innovation at ClearlySo said: “The launch of ClearlySo ATLAS marks a new chapter in assessing the role of impact and sustainability in the venture capital and private equity sphere. We spent 18 months collaborating with industry experts to develop a solution at a time when corporate and financial action continues to garner much scrutiny. We look forward to working with our customers, including our first, Octopus Ventures, renowned for leadership in innovative thinking, as they seize the opportunity to be standard setters for private equity and venture capital investment.”

To learn more about ClearlySo ATLAS please visit www.clearlyso.com/ATLAS/.

Real Estate Asset Investment
FundsReal Estate

Real Estate Asset Investment

Ethika Investments is a real estate private equity firm formed to provide investors access to a unique platform by tactically investing in opportunistic real estate assets primarily in the United States.

We invited Ethika President Jean Paul Szita to talk us through the firm and how it came to win this prestigious accolade.
Ethika Investments, an affiliate of Laurus Corporation, a real estate investment and development company that specializes in hotel and resorts, office buildings, multifamily and mixed-use properties, is a Registered Investment Advisor which specializes in management of private equity real estate funds with a vertically integrated solution.

The firm’s fund partners vary throughout each real estate cycle, but generally are a 65% /35% split between foreign and domestic capital sources.

Its clientele includes a wide variety of investors, from large institutional pensions to private sovereign wealth funds. Jean Paul explains the firm’s investment strategy and how it aims to provide these clients with the best possible financial solutions which meet their needs.

“Here at Ethika, we believe timing and diversification are the key components to any successful investment strategy.
“Therefore, our team focuses on investments in value-add and credit strategies where our team can stabilize the assets to produce dependable yields as well as upside opportunity, or provide financing that requires a deep understanding of transitional assets outside of the purview of traditional commercial real estate lenders to produce outstanding risk-adjusted yields. In today’s market, underperforming transitional assets remain attractively priced, and continue to deteriorate as distressed owners are unable to continue investing in them. After the strong acquisition period that occurred post 2009, we are finding that today is the era of strategic execution of value-add investment business plans and maximization of end value.

“Partnering with a local private equity real estate fund like Ethika provides foreign investors a trustworthy alignment of interest. Our funds also allow for vested interest as well as a clear objective, breadth of cycle-tested experience and an expansive skill set.”

It is this strategy which sets the firm apart within the financial market and highlights the suitability of its investment offering to clients, as Jean Paul explains.

“Ethika is vertically-integrated, serving both as a fund manager and real estate services provider, and working in tandem with our affiliate Laurus Corporation, we are directly involved in the management of the business plan for every investment, ensuring execution of the value-add process from start to finish.

“The company puts together entire strategies for investing that encompass everything from sourcing the asset, underwriting the asset, escrow, design, construction, repositioning, accounting, investor relations and property management, consolidating the entire process to a single operation, again minimising risk and the room for error. Ethika also has a highly diverse client base and prides itself on developing and maintaining relationships with their clients as the core of its business.

Central to the firm’s success is its experienced and dedicated staff, who are ambitious and eager to support clients however possible.

“At Ethika our staff are integral to the firm’s continued expansion, into new markets and alternative investment strategies, as we explore unique approaches to value creation while upholding our commitment to delivering outstanding risk-adjusted returns to our investors. As such we look for individuals that prioritize relationships with clients and who possess a diversified and substantial background in the industry.

“Individuals who have a history of excelling in their careers both professionally and academically and in particular, value those who have demonstrated their ability to provide leadership in their prior organizations are highly sought after, and we aim to support them and provide a working environment in which they can flourish and grow in their careers.” Within the wider financial market, while there seems to be no shortage in available capital, funds and investment managers are taking their time, carefully combing for smart deals, and adopting a wait and see approach as the market transitions.
“An experienced fund manager like Ethika Investments relishes this period in the market cycle because our team possesses a deep understanding of the nuances within the real estate marketplace and an ability to spot the pockets of opportunity, not only in the commercial office sector, but across the great real estate landscape, that will undoubtedly arise from this period of uncertainty”, Jean Paul comments proudly.

While there are some challenges in the hospitality sector as the gap widens between buyers and sellers, office and retail are offering solid investment opportunities with a substantial upside if you know where to look.

For the office sector, positive projections for the next three years anticipate absorption of existing office space to total 175 million square feet, which is more than the past eight years combined. Jean Paul explains how his firm works to ensure that it stays ahead of market shifts in order to remain at the forefront of innovation in the industry.

“At Ethika, we diligently track trends in market level economic and real estate fundamentals and demographic shifts to predict where markets are growing, and maintain diversification across each fund. It’s important to look at opportunities that are not purely cycle-driven, selecting strong investments that take into account macro trends. Our team buys assets that are not perfectly stabilised in order to acquire properties at an attractive price. These practices place us as a leader in the investment market and build our clients’ trust in our investment judgment.” Looking at the challenges the market faces, additional interest in U.S. real estate is increasing competition, making it imperative that fund managers understand the subtleties affecting regional deals and dig deeper into secondary markets, moving beyond U.S. gateways. Ethika’s recent investments in Minneapolis, San Antonio and San Diego are cases of upside opportunity brought about by the dynamic growth in these local markets and beyond and are testimony to the success of the firm’s approach to investment.

Moving forward, an increased migration of both domestic and institutional capital into alternative investments is predicted, with the real estate market set to increase its focus on funds that strive for alpha creation, or with respect to yield driven investments, which are insulated from risks of cap rate expansion. As such Jean Paul concludes by highlighting Ethika’s focuses for the coming months, which are revolve around supporting these industry changes.
“Looking ahead, our plan is to continue to focus on our most recent fund, Ethika Diversified Opportunity Real Estate Fund II. The fund focuses on opportunistic and value-add investments in the top 30 U.S. markets, continuing to capitalize on underperforming assets priced below replacement cost with significant upside potential.

“Additionally, the firm is enhancing its focus on credit strategies with its first platform dedicated strictly to debt investments launching in Q4 2016. With more cumbersome regulations impacting the desire and ability of banks and traditional debt capital channels to lend, the market for private lending continues to grow at an exponential rate. Ethika’s specific experience in value-add real estate provides the firm a unique capability to provide borrowers with financing solutions on projects not able to fit a narrowing criteria of bank, CMBS and traditional balance sheet lenders.”

Company: Ethika Investments
Name: Jean Paul Szita
Email: [email protected]
Web Address: www.ethikainvestments.com
Address: Suite 1016, 1880 Century Park East, Suite 106,
Los Angeles, CA, 90067
Telephone: 1.310.954.2009

What are The Main Benefits of a SIPP Investment?
FundsPensions

What are The Main Benefits of a SIPP Investment?

A self-invested personal pension (SIPP) is one of the most popular long term investment options when preparing for retirement. They are very similar to standard personal pension plans, except they offer a lot more hands-on experience for those taking one out.

Unlike a standard personal pension, where you will invest the money to be looked after by a financial professional, with a SIPP you have more of a say over where it is invested. This makes it a much more appealing option for those who enjoy and have experience with investing, and there are many other benefits to it as a long term investment option.

Flexible Investment Choice

If you want to manage your own retirement fund, then a SIPP is the way forward. They offer the opportunity to pick and switch investments when you decide, providing full control over your financial future.

There is a broad range of assets available from most SIPP providers to invest in. These include stocks and shares on a recognised stock exchange, government securities, investment trusts, insurance company funds, commercial property and many other options. Such a flexible investment choice means experienced investors should have the opportunity to tailor their retirement fund to be exactly as they want it.

Tax-Efficient

A SIPP is an incredibly efficient long term investment option. Up to 25% of the accumulated fund can be withdrawn as a tax-free cash lump, while the rest will be taxed as income. Plus, all the other tax benefits that come with standard pension plans are still included.

Savers can benefit from tax relief when it comes to making contributions into a SIPP. Compared to making some other financial investments in an attempt to increase retirement funds before you finish working, these tax-efficient benefits are a worthy perk.

Early Access

New rules introduced in April 2015 mean that pensions can be accessed and used in any way deemed necessary by holders from the age of 55. This includes a SIPP, and you can keep paying into it until the age of 75. However, from 2028 you will need to be 57 or over to make withdrawals.
Accessing the fund is also highly flexible, with options to take it all in one go as cash, in smaller lumps or as regular income. As a long term investment option, there aren’t many more tax-efficient and flexible options available to savers at the moment than a SIPP.

Ones to Watch in Hedge Funds 2016 - Overcoming the Obstacles
FundsHedge

Ones to Watch in Hedge Funds 2016 – Overcoming the Obstacles

AppleTree Capital faced the ultimate crisis in 2011, suffering a -34.17% annual return. While most investment managers would have cut their losses and shut down the fund, the team at AppleTree spent two years earning back money for their investors. This is a testament to the commitment they show to their clients. We spoke to Michael Nicoletos, Managing Director at AppleTree Capital, to find out more.

In general, most hedge fund managers tend to shy away from speaking about their negative results. However, AppleTree Capital believes that this negative experience at the beginning of their journey made them learn their lessons swiftly and at an early stage, helping them produce consistently positive returns ever since.

“2011 was a disaster,” says Nicoletos. “Of course, like most hedge fund managers, the first thing that came to our minds was to give up and do something else. But we simply could not do that to our investors. We decided to liquidate the fund, take one month off to clear our minds, and then come back to see what we were doing wrong. When we returned, we reassessed everything: our processes, the way we looked at markets, even the way we positioned our trades. This reassessment, together with hard work, soon bore fruit, as we managed to recoup our losses in just two years. I think this shows the level of commitment we have towards our investors. It is this high level of dedication that lies at the heart of everything we do.”

“Our investors know that we will not sink, no matter how rough the sea is,” Nicoletos adds. “We care about them, and it’s not just about making money and getting returns. Of course, this is the nature of the business that we are in, but it is also much more than that: it is about trust, dedication, and perseverance.”

“Across the industry, there has been a lot of talk lately about hedge fund managers underperforming and not deserving the fees they earn. At face value, this is because many passive funds have outperformed active managers. However, I believe that we need to look beyond that: if fund managers are good at what they do, and illustrate a high level of commitment and vigour, then there is certainly a value to their role.

I think we – at AppleTree – have exemplified this to our investors: not only have we outperformed our benchmarks (this is including the losses during the first 2 years), but we have also demonstrated that we will always be thoroughly transparent in whatever we do, and fully reliable whenever they need us.”

Apace with their efforts to make their investors’ money back, AppleTree decided to fundamentally change the fund’s investment philosophy, in order to ensure that a crisis like the one that hit them in the beginning would never occur again. “When we lost this much money, we completely changed our mentality” says Nicoletos. “First, we decided to focus on the macro-level aspects of the global economy, in order to get a bigger and more complete picture of the financial landscape. Questioning our ideas on a daily basis and identifying any prevalent behavioural fallacies in finance (both personal, and across the industry) became the key ingredient of our investment approach. As a result, we started positioning our investments a lot better, while also improving the efficacy of our hedging methodology. Our consistent positive results since then speak for themselves.”

“When it comes to emerging markets, we always have our eyes set on the bigger picture. For our long/short equity fund, which trades primarily in Eastern and South-Eastern Europe, we first take a top down approach in terms of the global macro situation: we look at areas such as China, Europe, and the US, we look at commodities, but we also look at central banks, the flow of funds, political changes, and any other broad systemic factors. After having solidified our global macro-level understanding, we then look at each country we invest in separately. Once we identify the drivers that will benefit (or hamper) specific countries, we dive deeper and use a bottom up approach to look at key fundamentals.

We then simply pick the firms that we like, and take long positions, and the firms that we don’t like, and take short positions. Of course, there is much more to our methods, but this is the key outline of how we operate. Hence, although we focus on a specific region in the emerging markets world, we do look at the global state of affairs prior to executing our strategy.”

Just one year after their crisis, they achieved an annual return of 27.93%. In 2015, a year that provided intense headwinds for many hedge funds, AppleTree achieved a return of 18.85%.

Nicoletos’ openness about their previous pitfalls is a further testament to the level of transparency at AppleTree, which is another cornerstone of their philosophy. “Transparency is extremely important to us,” explains Nicoletos. “Apart from our monthly newsletter, which is used to keep our investors updated with how the fund is doing, we also think it is very important that our clients have access to us at any time, feeling confident at the answers they will receive, no matter how tough things are. On top of this, we also hire independent third parties that allow our investors to crosscheck our operations, providing them with an extra layer of confidence in our work. In that sense, our investors gain full knowledge of what we are doing and how we intend to move forward. This has allowed us to build strong and lasting relationships with them.” Prior to AppleTree, Michael

Nicoletos worked as Head of International Equities at EFG Eurobank Securities, a Greek owned banking group, obtaining extensive experience in this niche area of emerging markets. During this time, he advised both retail and institutional clients and was an active member of both Eurobank EFG Securities’ and Eurobank EFG Private Banking’s market strategy committee. Furthermore, he was among the first international traders to trade in Romania, Bulgaria and Serbia and took part in the first large IPOs across the region. It was during his time at Eurobank that Nicoletos met Dimitris Apistoulas, his partner at AppleTree Capital.

Since its inception in 2010, the firm has kept a small, tightly-knit team, allowing the company to grow and develop organically, while making sure that all of its members follow the same core principles and vision. “We are a small team, but I believe that this is something that has worked in our favour,” says Nicoletos. “We communicate very well, and there is a high level of consistency in everything that we do.”

Looking towards the future, Nicoletos is confident that AppleTree Capital will continue to grow on its recent success. Moreover, AppleTree is very excited to announce that the company is in the process of opening a new office in London and getting an FCA licence, where they hope to add another fund to their portfolio. “Dimitris and I have always found the hedge fund industry an interesting and challenging place to work in, and we are very optimistic about opening a new office in London. With this transition, we will shift our primary operations in London (we intend to keep our office in Athens as support to the London office). It certainly is an exciting time for our business, and we are very much looking forward to the rest of 2016 and beyond.”

Name: Michael Nicoletos
Company: AppleTree Capital
Web: www.appletree-capital.com

Fund Manager Elite 2016
FundsHedge

Fund Manager Elite 2016

Wise Investment, founded in 1992, is an independent investment company based in Chipping Norton, Oxfordshire. We got in touch with John Newton at Wise to find out more about the company and to hear his thoughts on winning this award.

Wise Investment has two complementary businesses. One advises private clients on investment and wealth management. The other manages investment funds through an OEIC. The funds business is run by two teams. The Evenlode team manages Evenlode Income, and is working on a new Evenlode global fund which is due to be launched next year. The Wise Funds, TB Wise Investment & TB Wise Income, are managed by Tony Yarrow, who heads up the Wise funds team. The Wise OEIC has funds under management of around £900m.

The Wise funds are marketed by John Newton, working in the Wise Funds team.

The fund that has won the award is TB Wise Income.

TB Wise Income has three aims:
– to provide investors with an attractive starting dividend yield, currently 5.6% net,
– to increase the income by the rate of inflation or better,
– and to grow the capital value of the fund at the rate of inflation
  or better.

Over a long period of time, we believe that the best way to provide a growing income for investors is by holding a carefully-selected portfolio of shares in medium-sized and smaller companies, and to complement this portfolio with a diverse range of higher-yielding, lower-volatility assets, including fixed interest, commercial property, cash and alternatives.

We alter the proportions we hold in the different asset classes according to where we see the best value, and the most robust income streams. Our process is focused around the production of reliable income, and we are proud of the fact that investors who joined the fund at launch, a little over ten years ago, have received over half their starting capital in income payments over that period, as well as making capital gains.

TB Wise Income invests ethically, and we are exploring the possibility of having it accredited as an ethical fund.

Investment markets have been challenging during TB Wise Income’s first decade, and we have risen to the challenges we have been presented with. Our aim as we go forward is to continue offering our investors an attractive, reliable and growing income in all market conditions, using the wide range of asset types that are available through our mandate.

Investing in a post-Brexit World
FundsReal Estate

Investing in a post-Brexit World

The quicker-than-expected formation of a new government in the UK, and the surprise decision by Mark Carney at the Bank of England to hold interest rates at current levels, have helped settle nerves in the market to some extent. Likewise, investors have been buoyed by better than expected financial data from the Bank of England. But despite the positives, there remains a great deal of work to be done and the question now being asked is: what is Brexit anyway?

It is not just leaders in the EU who want an answer sooner rather than later. Investors too need certainty if confidence is to be maintained in the financial health of the UK and the EU.

And, with the UK already having lost its AAA credit rating, and UK banks being downgraded by Moody’s over fears about Brexit exposure, the economy is far from out of the woods and pressure is building on the new government.

So, where should a savvy investor be looking in the post-Brexit world? And how are property investments likely to fare, when compared to other asset classes?

Real estate, real returns?
The key advice for investors watching the Brexit drama unfold – and spooked by talk of possible referendums in France (Frexit) and the Netherlands (Nexit) – is that now is the time to diversify. Concerns over the economic implications of Brexit have already sent many investors to traditional investment ‘safe-havens’. The price of gold for example rocketed on the back of the UK’s decision to leave the EU, and has remained high since. Likewise the value of the dollar, despite taking a hit in the immediate aftermath of Brexit has since recovered strongly. And with firms like Microsoft and Morgan Stanley posting better than expected results in July, the S&P 500 and Dow Jones industrials have been driven to fresh heights recently.

So, could investing ‘over the pond’ be a solution for those concerned about Europe’s prospects?

There are definite returns to be had in the US. The Rycal Group, currently offering Carlton James investments which specialise in the development of new hospitality real estate in high demand areas, could be just the kind of investment opportunity for those looking to hedge against uncertainty in Europe.

As Simon Calton, CEO of the Carlton James Sky Watch Inn Group and Rycal Group, says, “During the referendum campaign much was made about the size of the market in the EU – an economy of some 550 million consumers. Let’s not forget though, that in the US consumers spent around $11,372 billion in Q1 20161 alone, a huge market for those willing to look beyond Europe.”

Carlton James Sky Watch Inn Group holds an investment portfolio focused on the hospitality sector in the US. It has recognised the potential of the US market for many years, and used it to deliver returns for investors averaging 17% for the last five years.

So how is this being achieved?
Carlton James has made an art of finding the real estate and hospitality opportunities that yield. Not only taking local economies into account, they also look for additional Revenue Generators such as proximity to highways, malls and other economic infrastructure.

Calton continues; “At Carlton James we understand that crisis and opportunity are just opposite faces of the same coin. The key to investing successfully is diversification, so if things are unravelling in Europe, make sure you have a stake in the US.

“Because we have pursued a policy of diversification, and built clear exit strategies into all our opportunities to mitigate risk, we can offer a real alternative during these uncertain times.

“And in spite of uncertainty in the wider economy, real estate remains a solid investment. Even in the UK, the gloomiest predictions about loss of property value pale in comparison to the loss of value on the FTSE 100 and 250 following the vote to leave the EU. And with real estate experts2 predicting Brexit could drive demand for US real estate – now would be the time to invest and get ahead of the crowd.”

For more information on Carlton James investments please visit http://www.rycalgroup.com/newinvestors

1. http://www.tradingeconomics.com/united-states/consumer-spending
2. https://www.theguardian.com/business/2016/jul/02/uk-brexit-vote-us-real-estate-market