Following a number of changes in the Investec group - the listing as a separate business of the asset management arm - this publication recently sat down with the head of its UK private bank.

Investec Asset Management made news headlines recently when it announced that it will be listed as a separate entity, and demerge from the specialist banking and wealth management businesses. A question arises, then, as to how the private bank will push forward as a core revenue-raiser for the Investec group.

The private bank forms part of Investec’s specialist bank and is a very different type of beast from old-school organisations such as C Hoare & Co and Weatherbys. The look and feel of this bank is much younger and is geared to people who are passionate about actively growing their wealth rather than simply managing it.

In fact, the private bank targets, amongst others, entrepreneurs who often have complex and idiosyncratic financing and wealth needs that larger institutions often cannot help with, Ryan Tholet, head of Investec Private Bank UK, told this news service recently. Tholet has been in this post for just over two years, since he came to the UK from South Africa. 

There are some niches that the bank serves especially well, they are structured property finance – help with development, investment and acquisitions – and private capital, offering lending solutions to high net worth individuals that meet both their personal and business needs, Tholet said from his firm’s modern-looking Gresham Street offices. This goes along with banking services that support the broad needs of clients: foreign exchange, mortgages, deposits and bank accounts.

The private bank caters for clients who earn around £300,000 ($394,581) a year or more and who have a net asset value of £3 million-plus. There are slightly more than 300,000 UK persons who have this NAV level. When certain qualitative and other factors are taken into account, there are probably around 90,000 to 100,000 individuals who have the kind of business/financing needs Investec can help with, Tholet said. The private bank employs approximately 450 people in the UK; its client asset book has about £11 billion and the private bank is the second-largest contributor to the specialist bank’s earnings in the UK (behind the commercial bank).

Besides Tholet, other senior figures at the private bank are Arjun Chopra, who looks after the bank’s private capital offering. This helps entrepreneurs and owner-managers with their lending requirements, and managing their personal and business assets.  Deborah Sayagh leads the private equity offering, helping clients (often with complex income structures) to achieve their wealth creation goals, and Gary Dobson heads up the structured property finance team, helping property companies and institutional investor clients to manage their property finance.

Lee Goggin, co-founder of the firm findaWEALTHMANAGER.com, a wealth management "dating agency" matching clients and firms, gave high marks to Investec's private bank. "Since Investec joined our wealth manager panel in 2014 they have proven to be a reliable partner with a broad offering combined with excellent client service," he told this news service. 

Acquiring
Investec’s private bank aims to acquire about 10 per cent of this high net worth population group in the next four years, he said, translating into a hard number of more than 7,000 people. And while that figure is hardly huge by the standards of a UBS or a Citigroup, say, “given the complex needs of these clients they present a huge opportunity for the bank” said Tholet.

“We are not always especially useful to high net worth individuals who are simply looking to preserve their wealth.” he said - they have a separate, focused team in their wealth & investment business who can cater for these needs. The private bank, however, concentrates only on the opportunities that provide clients with capital, rather than the wealth team that focuses on managing clients' capital. 

Clients come to the private bank often via other parts of the Investec operation, as well as through intermediaries who recommend its services. These clients can also be divided into three broad types, each shadowed by specific groups at the bank, Tholet said. They are corporate executives and entrepreneurs; internationals and professionals; and financial services professionals.

At the time of IAM’s de-merger and share listing announcement earlier in September, Investec made it clear that it saw more opportunities for the specialist private bank and wealth arms to work together. With the asset management business heading for a life on its own, the private bank will be under more pressure to prove that it contributes to the bottom line.