Private functions
SIR – The arguments Ludovic Phalippou levels against private markets (Briefing, p38, Spear’s 95) underscore the importance of knowledgeable and personalised advice to individuals considering these assets.
I agree with many of his conclusions; private equity can be a complex and expensive asset class which doesn’t guarantee high returns. However, that some funds are uninspiring does not mean you shouldn’t search for the best.
We focus on capacity-constrained strategies where the manager’s interests are aligned with investors. We find our portfolio of such managers produces results that look rather different from those quoted by Phalippou. In an industry that has grown as significantly as private markets, it is unsurprising that wealth has been created, but the fees are detailed at the outset and skewed to success. If you don’t like them, you should not invest. Likewise, if you doubt the fund will make money, steer clear. We see plenty of opportunity in the universe that remains.
Ross Elder, Lincoln Private Investment Office
[See also: The best wealth managers for high-net-worth clients]
Funds and fees
SIR – Your recent article (p40, Briefing, Spear’s 95) raises pertinent questions regarding hedge fund fees. From a UHNW perspective, cost is only one consideration. Where strategies are genuinely uncorrelated, deliver consistent alpha and contribute meaningfully to portfolio resilience, fees can be wholly justified. The true challenge lies in distinguishing managers offering genuine diversification and demonstrable skill from those whose strategy and returns largely mirror long-only benchmarks.
In today’s more discerning environment, clients prioritise outcomes, transparency and alignment of interest. The most successful relationships are grounded in shared conviction, with managers and investors working in unison to deliver long-term, risk-adjusted value across market cycles.
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Adam Brownlee, Coutts Family Office
Showing their age
SIR – Should owners show or race their multimillion-pound classic car purchases (p 106, ‘A classic conundrum’, Spear’s 95)? I would suggest that the informed buyer will know precisely the reason for their purchase.
The art buyer will display the car in a museum or perhaps at home to his acquaintances, whilst the investor, private or corporate, is likely to store the asset in temperature-controlled conditions away from prying eyes.
The enthusiast will either cherish the acquisition of a great car, keeping its mileage low, or may well take it to the racetrack to emulate its intended use by past owners.
Only occasionally will an owner, such as Nick Mason, be troubled by the difficult and confusing question of migrating from show to race or vice versa. What a delicious conundrum, indeed!
[See also: Mansour Ojjeh’s exceptional McLaren car collection up for sale]
Primed to flourish
SIR – The ‘To use or not to use’ debate referenced by your recent ‘A classic conundrum’ article is as old as the collector car hobby itself. I remember valuing a collection of delivery mileage Porsches a few years ago and being puzzled when our factory contact asked whether they were stored in space. The point he was trying to make was that unless an owner can defy gravity, oil and grease will inevitably pool at the base of a bearing or joint. The best way to preserve a car and to minimise its recommissioning costs is to use it, if only on a very limited basis. A car can engage with four out of the five senses, but only if operational.
Contact us
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This article first appeared in Spear’s Magazine Issue 96. Click here to subscribe
