Vestra is Latin for ‘your’. It is this philosophy that Vestra Wealth has at its heart, with a strong focus on clients and providing a personalised client service.
“We have a coherent investment process which can translate into a client portfolio,” says Meena Lakshmanan, partner and co-head of investment solutions. “The fundamental idea when setting up Vestra was that it is client-focused. We always put the client at the centre of the portfolio.”
Vestra Wealth is a relative newcomer to the game, having been set up as a partnership in 2008 by experienced industry professionals in order to provide a quality wealth management service to private clients, companies, charities, trusts, friendly societies and financial intermediaries. The aim was to offer a fresh approach to wealth management, and the company feels the key to this is unbiased advice, a thorough and well-informed investment process and transparent charging.
It has a strong emphasis on treating all clients as individuals and offering a bespoke service. Its investment solutions are designed around the clients’ needs, rather than being product-driven. Indeed, Vestra does not manufacture investment products to sell to clients as it believes you cannot provide an advisory service if you are trying to sell in-house manufactured products at the same time.
With access to the resources and expertise of leading global investment firms, while still retaining the flexibility to source niche opportunities, Vestra Wealth remains committed to an approach that puts the client first.
A league of its own
This transparent service built around each client’s needs is what Vestra feels makes it stand apart from many other wealth managers. Lakshmanan describes the firm as a multi-asset, multi-product investment manager which provides bespoke mandates.
“Each client has their own objectives and we work to match these. We can use a range of asset classes to do this, including equities, bonds and alternatives.”
The first step in this process is to go through a detailed risk profile with each client, then write an Investment Policy Statement.
“We then have an agreement with the client on their allocation, attitude to risk and tolerance.”
Vestra’s investment committee convenes monthly to determine a generic portfolio based on its views. This can then be used by investment managers to tilt it to the specific requirements of each client portfolio. This, according to Lakshmanan, is a process which has gradually evolved over time.
“The output from the investment committee gives a market view. We’ve evolved the process to adapt more to the requirements of the business. We use 14 asset classes which remain the same, and it’s about discussion, adaptation and tilting exposure within those asset classes. We’re not trying to find the next asset class.”
Investment guidance
It is something of a challenge to illustrate a typical client asset allocation for Vestra, either onshore or ex pat, because its portfolios are so bespoke to each client. However, overall guidance comes from the investment committee and a flavour of this view will naturally find its way into client portfolios. At present this equates to around 60% in equities, of which 90% is in developed markets and 10% in emerging markets. Vestra’s model portfolio has around 25% in fixed income and cash, with the remainder in hedge funds and infrastructure.
Within credit, for example, Lakshmanan says Vestra has liked the asset for the past four years and over this time has moved from investment grade, via high yield, into floating rate notes.
“Our market view today is that we’re positive on equities and within that we like Europe and Japan. In equities, we’re currently overweight developed markets although we’re neutral on the US. We went overweight the US in late- 2012 but late last year we became more cautious.
“In alternatives, while five years ago we might have been overweight global macro, we’re now favouring event-driven strategies.”
The firm is currently negative on emerging market debt.
It’s not all relative
Vestra’s approach is typically more absolute return rather than relative return focused, but again this depends on individual client requirements.
“Depending on the client size there may be restrictions. Some clients might choose a relative index,” says Lakshmanan. “Around 80% of our client base are medium-risk clients.
In addition to advising clients and working with them to build an appropriate portfolio, Vestra also offers a range of other services, including specific technical advice about complex transactions, providing access to opportunities in areas such as private equity or commercial property and derivative trading for professional clients.
Breaking through borders
While Vestra is very much a UK company, its reach is starting to become more global. A Jersey office was established in 2010 and in May last year the firm launched a business to look after US expatriates.
“Historically, Vestra has had a core business which is UK-centric, but the number of international clients has grown significantly. As the business grows, we will increasingly look to service international clients,” says Neil Williams, director of Vestra US Wealth Management (Vestra US), which is a wholly-owned subsidiary of Vestra Wealth.
“When advising international clients, we recognised that specialist advice is needed when advising US- connected clients, so we established a separate subsidiary in Vestra US.
“Since setting up the business, we subsequently found a large number of Britons living in the US who were struggling to get financial advice, particularly when it came to UK pension assets. We give advice that is very tailored and specialised, and we work closely with lawyers and tax advisers to make sure clients are getting consistent overall advice.”
Vestra US has also been instrumental in the setting up of the US Professionals Association, which is a forum that includes investment advisers, lawyers and accountants all of whom advise US connected clients.
“Through that forum, we have the opportunity to discuss the issues and challenges that face US expatriates which has helped enormously,” adds Williams.
Looking to the future, Lakshmanan says Vestra Wealth will continue to grow its client base within the UK and internationally, remaining focused on putting clients first.
