As markets have thrown out dozens of headline-grabbing horror stories, it has never been more important for investors to find places where they can arrange deals, air their worries and share ideas in privacy in front of a select audience of like-minded people.

That is what Pi Capital sets out to do. While not the only such investor peer network in the UK or the world – there are some other organisations with some similar qualities such as Tiger 21 and the Family Office Association in the US – Pi Capital certainly holds its own as one of the most prominent. It hosts closed-door meetings with figures such as Stephen Green, chairman of HSBC, Alexis Lautenberg, the Ambassador of Switzerland, and Luke Johnson, chairman of Risk Capital Partners. And Pi Capital’s executive team works with members and third party investors to source, check and structure investments. As described in its literature, Pi Capital says it “typically acts as a co-investor to a firm or to an individual who acts as lead investor of the deal”. One key point is that members have the right to enter any deals that are presented to them, either in the form of direct participation, or via a fund.

“We have a mantra – we are smart and more successful as a group than as an individual,” David Giampaolo, chief executive of Pi Capital, told WealthBriefing in a recent interview at his organisation’s offices in Mayfair, London.

“I love the platform that London gives one to do business in. London has huge advantages but nothing is forever and we need to consistently improve it both in absolute and relative terms,” said Giampaolo, a Floridian transplanted in the UK, joining Pi Capital in 2002.

And Giampaolo is uncompromising in his defence of non-domiciled status of residents in the UK, rejecting claims that they might be getting an easy ride in terms of tax. “The majority of people who are non-doms are among the single biggest contributors to charities and some of the most important wealth creators in this country.”

Like many of the senior figures at Pi, he has a long track record as an entrepreneur, having co-founded Fitness Holdings Europe, and later playing a key role in the £835 million (around $1.253 billion) buyout of Fitness First. His colleagues’ CVs read impressively. For example, Paul Thomas, managing director, worked for 19 years with ECI, the London-based mid-market buyout house; Stephen Geddes, chief operating officer at Pi, has worked at Eden Capital.

Giampaolo says Pi Capital’s membership structure is a crucial strength, enabling it to be light on its feet and flexible, which means low overheads: “We have leading practitioners from private equity funds, hedge funds and other investors. They are involved in a personal capacity as members. We don’t have corporate memberships. We don’t manage money and we don’t have funds and don’t tell people what to do.”

“The organisation has become more of a think tank, an organisation of business leaders who understand the benefits in meeting and communicating in a private environment,” he said.

To be a member of Pi Capital involves an annual fee of £4,000. So far, more than 3,000 people have signed up and 80 per cent of them are based in the UK. The majority are men; more women would be welcome, says Giampaolo. Members get to hear from some big-hitting speakers, with names such as Sir Richard Branson, Jim O’Neill (global head of research at Goldman Sachs);  Jon Moulton, former managing partner of Alchemy Partners; George Osborne, UK finance minister; Sir David Walker, chairman of Morgan Stanley Europe, and Michael Spencer, CEO of ICAP, the inter-dealer brokerage. While people from the wealth management field speak, there is absolutely no product or service pitching allowed in the course of the talks. Furthermore, the talks observe “Chatham House” rules of no reporting by journalists such as your correspondents; the idea is that people can discuss issues privately and freely without inhibition.

The model is broken

As far as the wealth management industry is concerned, Giampaolo said it should be under no illusions about the challenges the industry faces, particularly at a time when trust in financial services is at a low ebb.

“Wealth management is broken and what isn't broken is outdated. There's not an alignment (with the clients' interests) and there really can't be the way it is now. It is inherently conflicted. You have to accept, day one, you as the client aren't sitting on the same side of the table and it is `buyer beware’,” he said. 

Top concerns of Pi members right now are taxation, currency fluctuation and the low or negative growth in the developed Western markets.

"We're living in a fragile financial world right now, and some new ideas and guidance from wealth management would be welcome," said Giampaolo. "It's tough to make money in this environment, the headwinds are strong."

The financial crisis has taken its toll on many business enterprises, but Pi Capital has enjoyed continued growth, he said. “We grow each year but it's slow because it's a high touch business. The credit crunch was our best year ever though. We plan to go into India and Asia,” he said.

If new ideas do develop on how to make wealth management more effective after the tumult of recent years, it is highly probable that Pi Capital will be a part of that conversation.