This news service recently talked to 10-year-old City-based investment firm Sparrows Capital, a business serving HNW individuals, family offices and others, and doing so in a cost-effective way, it says.

When Sparrows Capital, a UK-based investment boutique with about £600 million ($761.5 million) in AuM, made a senior appointment for its model portfolios services (MPS) arm, it signalled that this organisation is in expansion mode. 

The business caters to family offices, high net worth clients and institutions, using low-cost components such as index funds and ETFs.

Headquartered in the City and with employees across the UK, in July Sparrows Capital appointed Arnie Millington to oversee its MPS proposition for wealth managers – Sparrows Capital MPS. The chief executive is Yariv Haim and the chair is Rupert Dickinson.

The business, established in 2014, tries to offer a service that is “as far-reaching as possible,” Millington told this publication in a recent call. 

Sparrows Capital places a heavy emphasis on client service. 

“Never forget that you are investing someone else’s money,” he said. 

The firm invests across the business cycle and does not try to time the market, he said. “Discipline is very important; it is difficult to add alpha over the long term,” Millington continued. (He spoke to this publication a few days before global equity markets fell, and then partly bounced back, this week.)

“We are looking to give people as many solutions as possible,” he said. 

The arrival of the UK’s Consumer Duty regulatory regime at the end of July last year has benefited the firm because it is about delivering value for the end client. “We are in the business of trying to solve problems for people,” he said. 

The low-cost model of investment is significant, because savings can compound over time, he said. 

Two major shareholders in the firm are the Eliashar family and FNZ, the wealth management tech platform; the remaining part of the firm is held by staff, of whom there are 16. 

The future?
“We are always open minded about taking steps to support and further accelerate our future growth. We have made no acquisitions so far, and haven’t identified many opportunities to do so,” Millington said. “We are very open to partner with businesses who can help us provide suitable solutions to our clients.”

Asked about revenue models, Millington said fees depend on the service selected. The SCore (retail MPS via financial advisors) is at 10 basis points per annum, capped at £20 a month. The partnership MPS offering via independent financial adviors is 15 bps per annum and the bespoke range, for HNW individuals, wealth managers and quasi-institutional investors is a bit higher, at 20 to 30 bps per annum depending on service level.

The firm said it does not set minimum ticket sizes for clients. Besides UK-based clients, Sparrows Capital serves clients outside the UK including the Channel Islands.

Millington concluded by saying that the firm isn’t greatly fussed about reaching specific target dates as a measure of success. 

“Our vision for the next few years is to grow our popularity and brand, and to help as many people invest as possible. Our business model depends on scale, and we plan to grow accordingly. Milestones aren’t our focus and will take care of themselves if we grow in the right way and are profitable,” he added.