For larger families that can afford to think more like institutional investors, or “mini sovereign wealth funds”, illiquid assets are finding their way into portfolios. The firm has backed a number of venture deals and launched a private equity programme giving clients access to five funds.
Hedge funds have always been part of LGT Vestra’s portfolios, to dampen volatility rather than add extra beta, and so the preference is for macro and CTA funds rather than the traditional long/short approach.
The firm does stick to its asset allocation but how it populates its asset class exposure depends on a client’s risk appetite.
“Clients can be nervous and I always tell them the market will fall and you will tell me, ‘I want to reduce my equity exposure’, and I will say, ‘Let’s not, try and be strong and ride it out’. All the statistics show that over 100 years riding out volatility works; we have only had two negative decades for equity performance and, even then, it was single-digit falls.
“It is very important to stay steady because I have seen other houses where the investment committee gets nervous and starts to cut positions when it is down. It doesn’t help performance.”
As well as lamenting short-termism, Williams is frustrated by what she calls “too much copy and paste” in the industry. She feels the industry does not attract sufficient talent, certainly not enough diverse talent, which affects diversity of thinking.
Another grievance is the lack of a bipartisan approach from other firms in financial services.
She explains: “A lot of our larger clients might use other banks but let’s just be grown up and sit down together and figure it out for the client, rather than point scoring.”
Overall, though, Williams believes the UK’s wealth management industry is thriving and while fragmented at the top end, does serve its clients well.
She says: “The British wealth management industry is fantastic and should be much prouder of where it is at. Through RDR, a lot of bad things got cleaned up and UK clients have phenomenal choice.”
