Running money managers' personal assets can be a bit daunting.
But that's just what London-based private investment office Partners Capital LLP does, and how in turn it has leveraged those personal connections into building an institutional business that has grown to about $3 billion as of Sept. 30, from $20 million at the end of 2004.
Total assets are about $6 billion, with money managers' private wealth constituting most of the other half of the assets for the firm, which provides endowment-model asset allocation services and access to best-in-class managers across all asset classes. Partners selectively adds tactical asset allocation and alpha/ beta separation to portfolios to further boost returns.
Partners CEO Stan Miranda says institutional clients — endowments and foundations (mostly small) and private wealth clients (most of whom are money managers) — feed off each other in what he calls a “virtuous circle”: money manager wealth clients who sit on boards or investment committees of foundations or endowments attract institutional clients. Also, Partners has added individuals as clients whose first interactions with the firm were in their roles on endowment and foundation boards and committees.
Mr. Miranda is mum on giving out names, but said most personal wealth clients are leaders of private equity and hedge fund firms looking to diversify away from the investments their companies make.
Clients of Partners Capital say Mr. Miranda isn't interested in high-profile clients as window dressing, but that there is a sense that he's recruiting people to become members of his investment club.
“Stan likes to have clients who contribute to the investment process itself,” said Jeremy Sillem, co-founder and managing partner of merchant bank Spencer House Partners LLP in London and a strategic adviser to Partners. He added that Mr. Miranda seeks out clients who are “very smart, provocative and stimulating” and who might be able to open doors to new managers: “I think he sees clients as a community.”
And having money managers as clients pushes Partners to improve because they are more demanding clients, said Barry Hedley, the former bursar at the University of Cambridge's Gonville and Caius College who, in 2004, hired Partners to oversee the college's £120 million ($200 million) endowment.Partners manages assets for about a dozen college endowments at Cambridge and the University of Oxford, including the £140 million Rhodes Trust at Oxford.