Wealth and asset manager London & Capital has launched a Europe arm as it expands operations across the continent.
The expansion follows the recent strategic partnership with private equity firm Lovell Minnick Partners (LMP) announced in June 2022.
London & Capital Europe (LCE) will have an office in Barcelona, Spain and will be led by partner and chief investment officer, Pau Morilla Giner, who has been with London & Capital since 2008.
He will be responsible for driving growth across Europe, with a focus on American and other international expats in the continent, high and ultra-high net worth domestic clients and institutional clients.
Morilla Giner will be supported on the ground in Barcelona by a local team including Diego Pajaro, a senior client adviser with over 18 years’ experience.
Private banking competitor
Guy McGlashan, chief executive at London & Capital, told International Adviser: “We have a lot of European clients already. Brexit slightly forced our hand in one way because, as part of the EU, it was easy for us to continue to look after clients across the EU via passporting provisions.
“With Brexit, that fell away, and because we had a sizable European client base, we were very keen to continue working with those people.
“Also, a big part of our growth story for many years has been coming out of European countries in the EU. It was important for us to maintain access to that market.
“Europe seems still to be a market dominated by the private banks of the big national players. But typically, they usually have a pretty simple offering. Their financial planning offering that goes alongside it is often not as well developed.
“It just lacks some of the bells and whistles around the advice and the reporting that we feel we’re able to offer with our proposition. We also offer a much more global investment proposition as well.”
Spain
London-headquartered London & Capital is now regulated by the Financial Conduct Authority (FCA), the Securities and Exchange Commission in the US and Comisión Nacional del Mercado de Valores (CNMV) in Spain.
Morilla Giner told IA Spain was the perfect place for the LCE hub.
“We realised if we really wanted to maximise the probability of LCE becoming a success, we needed to take the London DNA and take it into Europe,” he said. “We didn’t want to recruit a whole new team that will be based in a region. We felt some of our team needed to relocate and preserve what we had been doing so well in London.
“I happen to be born in Barcelona and have been at L&C for almost 15 years in London. I have my contacts in Spain, so it made sense.
“We also felt welcomed in Spain when we were talking to the Spanish regulator. We were even able to do the documentation in English, and the little things like that made us think they wanted to make it work.
“There’s plenty of local talent in Spain. It’s not nearly as expensive as London is in terms of attracting and retaining good people.
“This is not a story of Spain as a hub for business. It’s a story of Europe as a hub for business, with Spain being the entry point and it clearly allows us to then passport our way into all the other regions.”
Client targets
Morilla Giner said that the LCE operation will be looking to target four types of clients, this includes focusing on one of London & Capital’s main areas of focus – which is US-connected persons.
He added: “There’s plenty of American-connected wealth living on the continent. We have very good relationships with professional introducers, including tax advisers, accountants and lawyers. They may have an office in London as well as across Europe, so that will help us.
“American wealth is not easy to manage – but when you do it it’s a good thing to do. But when you don’t do it well, it can be very damaging for the client.”
LCE is looking to target international wealthy families, including UK expats, and domestic clients, as well as small- and medium-sized insurance companies, which form the core part of London & Capital’s Institutional client base.
Morilla Giner said: “Also a lot of the existing EU clients that are non-US connected have some link to the UK. They may have lived in the UK and come back to Madrid, Athens, Milan or they might be British people living in Barcelona. We will go beyond the British expat and target international wealthy families who are inherently more cross-border.
“Lastly, we are looking at local wealth. We have developed less relationships with these types of clients because we traditionally deal with more complicated clients. Growing this clientele will take us a bit longer. I suspect growing this market will be a long-term goal from 2023 onwards. It will not be the main immediate area of focus.”
Europe ambitions
London & Capital believes that its European arm can be one of its biggest areas of growth.
Morilla Giner continued: “We are ambitious. We want our Europe business to compete with our existing divisions. That means that over the next few years, we need billions of assets under management coming from Europe. We have been dealing with European wealth for more than 10 years. Even though we are called London & Capital, we’re not your typical British wealth manager. We are inherently much more international.
“We don’t do very well with old UK wealth. That’s the reality of it. We like first generation wealth and people who have a bit more of an international flavour.”
With LMP’s private equity funding, acquisitions are on the agenda for London & Capital in Europe – but the firm will not panic buy.
Morilla Giner added that the firm is in the “process of mapping out” its areas of focus – which includes the Mediterranean bases of Portugal, Spain, Italy and France, as well as Switzerland and Germany.
“We don’t want to deviate from what we do,” he said. “We don’t want mass affluent, we want more sophisticated clients. We want higher critical mass niches that we can serve better. Then the market will dictate where we identify opportunities.”
McGlashan added that London & Capital wouldn’t be looking to acquire “anything that was in the mass affluent end of the market”.
UK operation
The European arm comes after London & Capital sold a part of its UK wealth business to Foster Denovo in May 2019.
But McGlashan told IA that the “UK remains an important market” for the company – and it is not looking to retreat from Britain.
He said: “The main driver for us with the sale of business to Foster Denovo is that our proposition does not really lend itself very well to less complicated clients who are very UK centric in their requirements and needs.
“Our investment proposition is much more of a global proposition and it’s actually because we’ve always been quite internationally minded, we feel we can take what we have here, and with some very minor tweaks, make it relevant in Europe as well for European clients.
“The UK remains an important market for us and we will continue to be focused on the UK market, in terms of where our business is today and where many of our clients live today. We will always see it as an important place. It’s one of the largest wealth markets in the world. There’s a lot that we’re not even touching on at the moment.
“The business plan that our new partners LMP have bought into is an organic growth business plan. We’re not under any pressure to go out and make acquisitions. We’re 100% aligned with LMP on this. This is not a roll up strategy of any sort.
“We are by no means saying we won’t be doing any acquisitions, but I think we will be very selective. We want to remain in the high net worth and ultra-high net worth space. We like operating in market niches that other people find a little tricky.”
