Forward-Thinking Strategies for Experienced Client

Kleinwort Hambros worked with a financially sophisticated client with wealth predominantly generated and held in hedge funds and private equity holdings. The client had previously taken direct exposure to UK and Channel Islands residential property with a strategy aimed at acquisition, development and sale.

26 August 2022

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The Client

A financially sophisticated client with wealth predominantly generated and held in hedge funds and private equity holdings. The client had previously taken direct exposure to UK and Channel Islands residential property with a strategy aimed at acquisition, development and sale.

The Challenge

Through regular contact with a dedicated client manager, it was identified that the clients’ investment strategy had changed and required assistance from Kleinwort Hambros. The client felt it was prudent to take a longer-term view of property markets and to diversify their non-property holdings into more traditional investments.

Solution

By working with the client’s tax and legal advisors Kleinwort Hambros, was able to convert the short-term property debt into longer term buy-to-let mortgages and release equity from the properties, in order to provide the initial capital to fund a discretionary portfolio mandate. The client matched the amount of the released equity from their own resources in order to increase the size of the investment pool.

The discretionary mandate was then constructed in accordance with the clients’ risk profile. In order to further increase the portfolio, an element of debt was introduced by way of a loan, which was secured against the lending value attributed to the portfolio.

The expert advice from the Jersey-based team was vital to the positive outcomes of this solution.

Results

A restructured property debt provided the client with maximum flexibility to consider market opportunities with a longer-term approach, the added benefit of income from the properties and capacity to drive much needed diversification into more traditional liquid investments.