Specialist UK Wealth Advisor Firm Has Expansive Ambitions

Tom Burroughes Editor London 15 June 2009


A UK-based wealth management advisory firm, Crossbridge Capital, which was created by a team of ex-Credit Suisse bankers less than a year ago, has enjoyed a profitable debut and is expanding beyond its core base of Middle East clients, its chief executive and co-founder said.

Crossbridge, which was founded last September by Tarek Khlat and Jean-Pierre N Aoun, is currently a niche player in the wealth advisory space; it oversees about $2 billion of assets. The planned recruitment of more managers in the next few weeks should help this fledgling business expand into something rather broader, Mr Khlat told WealthBriefing in an interview last week.

“We will be looking at people in the Indian, non-resident Indian markets, in Russian, east European and north African markets. We have been heavily involved in interviewing candidates who make the right fit,” he said. The firm is also expanding into offering merchant banking advisory services to its clients, Mr Khlat said.

Mr Khlat has straddled the worlds of finance and broadcasting in the past. From 1988 to 1993, he worked for media outfits such as CNN where he headed the financial news gathering division, and Fox, where he was responsible for story coverage and editorial content of weekend newscasts of the “The Ten O'clock News”.

Mr Khlat and Mr Aoun founded Crossbridge during the stock market slide of last summer and had to watch as some of the world’s seemingly invincible investment giants, such as Lehman Brothers, fell bankrupt, or in the case of Merrill Lynch, got taken over. But despite starting in such inauspicious circumstances, so far, business has been profitable, Mr Khlat said, although he gave no specific numbers as full audited figures are due to be released soon.

“The big shift that happened for us in January [2009], was when we started to see responses from clients to our new business model base on independent advice and when we could begin to focus on expanding the business.”

Crossbridge started with a team of eight people, all from Credit Suisse; it is in the process of hiring a total of six more people, with five of them due to start from 1 July and a further position from 1 August, he said.

The firm, which acts as an independent advisor, earns revenues by taking a share of the fees that a client pays to his or her bank. “We believe that our most precious asset is our independence – we are totally free to select the best product and provide the purest and most independent advice,” said Mr Khlat.

At present, Crossbridge has relationships with about eight banks and may possibly expand this number, he said. In total, the firm has about 100 clients, who on average have investable assets of about $20 million each overseen by Crossbridge, which puts them towards the ultra high net worth end of the spectrum.

One of the main driving forces behind the setting up of Crossbridge was obtaining a bigger share of client’s assets, he said: “Clients came to us and said they had reached the limit of their allocation with one bank, but would give us more if we went out and became independent.”

Crossbridge provides five main services: investment advisory solutions, risk management, fee monitoring, “total wealth management” and merchant banking. As far as “total” wealth management is concerned, what that term means is that Crossbridge works closely with clients to develop a collaborative plan to enhance the services already received from other advisors in such areas as trusts and estate planning, financial analysis and philanthropy.

It is plain, then, that this still-young firm has high ambitions. It was launched in what has proven to be one of the biggest market slumps since the Great Depression. But if a firm can stand up to such a test, then the future may prove rosy when or if the economic weather becomes sunnier.

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