Boris Johnson, Prime Minister of the UK, announced today England should return to significant normality in the next weeks and months with an encouragement to employees and employers to get back to work.
At the same time the US government is looking at how to unlock a number of States from Covid 19 lockdown and the European Commission, the executive arm of the EU is meeting to discuss how to spend / invest the Euro750bn bailout package across it member states.
Whilst all of this news is positive, counteracting news such as that released by British Airways, the UK flag carrier airline, confirming it is retiring its fleet of Jumbo Jets 3 years early. The knock-on effect of the multitude of decisions such as this has a compound effect on the business levels of suppliers and partners. In British Airways case for example Boeing will lose c.3 years of parts, servicing and management repairs from BA.
The key point here is how do investors navigate their way through the various conundrum’s and decisions facing them? Not an easy challenge!
Certainly, one could just trust the various fund providers, but many of those are well under water retrenching 5 – 15% on last year’s valuations whilst still charging their 2% management fees.
Investors can also go it alone and invest in the markets directly – but without the knowledge, experience and skills to identify the best value for risk based stocks, and given the professionals aren’t able to do always, as noted above, this seems to us to increase the level of risk for the average investor.
So, what does one do?
Well assuming that just having a large bank account doesn’t work for most high net worth investors, after all the rate of inflation is well above interest rates paid and therefore money left there is only reducing in real terms.
This means Investors need to look at alternative solutions.
In our opinion those that minimise risk, provide, ideally a fixed asset purchased at good value that is reasonably liquid, i.e. able to be sold fairly quickly, and offers a fixed annual coupon or return is ideal. Alas Government Bonds one potential solution currently offer rates as low if not lower than bank interest rates. In some cases negative rates. So these aren’t a sensible option.
Markets are down with lots of negative sentiment.
To overcome these investors, need to look a little harder, perhaps to the specialist Alternative Asset Management market. Here investors can find unique products, such as Berkeley House Capital ‘Yacht Bond’ that offer fixed returns with secured assets underpinning them.
Clearly the risk profile changes with each category and that makes the question of protection even more relevant, particularly when we have seen in the press very high-profile investment managers close their funds losing investors’ money. It seems this again points to the benefits of utilising the services of boutique regulated alternative asset managers, effectively providing increased assurance that investments, whilst not removing all the risk, are managed correctly.
If you are a Wealth Manager, IFA, Family Office or Finance Professional and would like to know more about our investment products and/or services, send us and email to arrange a convenient time to discuss.
If you would like to discuss any aspect of this note please feel free to email: charlotte@berkeleyhousecapital.co.uk and one of the team will be very happy to arrange call with you.
www.berkeleyhousecapital.co.uk
12 Hay Hill, Mayfair,
London. W1J 8NR
United Kingdom
+44 (0) 207 863 7507
1. Berkeley House Capital is an Appointed Representative of Alternative Asset Management Ltd which is authorised and regulated by the Financial Conduct Authority (No. 450404). Not all of our activities are regulated by the FCA, further details are available from us on request.
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