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Profile: how millennials and Gulf cash are remaking this private office

Profile: how millennials and Gulf cash are remaking this private office

LJ Partnership is not your typical small family office. Straddling four continents, the business boasts an interesting shareholder list, including Sheikh Jassim Al-Thani, a Qatari businessman.

The firm has a complicated past and has made a number of deals to get to where it is today. The latest change was in July when it sold a 40% stake to Dilmun, a New York-based family office with its origins in the Gulf.

'The purpose behind that was a recapitalisation of the business, which would allow us to reset and start again on our growth plans, particularly with a geographic focus,’ says Alex de Meyer (pictured on right below), LJ Partnership’s chief executive officer.

‘We were looking for another geographically strategic shareholder to come in to help us continue our growth plans, and Dilmun fitted that bill as they are based in North America.’

De Meyer did not reveal who is behind Dilmun, but it has been rumoured to be a member of the Qatari royal family. Companies House filings show that Sheikh Jassim Al-Thani has become a significant shareholder in the business following Dilmun’s investment.

He is not the only high profile investor on the shareholder list. A company owned by one of Hong Kong’s richest families, the Peterson Group, took a 35% stake in LJ Partnership in 2016.

It is owned by the Yeung family, which was the 47th richest family in Hong Kong in 2016 according to Forbes.

‘Since LJ started, the ownership structure of the firm has always been the partners who worked for the firm and then some strategic investors who joined as shareholders, either because they have been clients and wanted to participate or because, geographically, they became the right partners for us to bring on board as shareholders,’ de Meyer explains.

‘The Peterson Group is a good example of that. Tony Yeung, who owns Peterson, was a client from 2011. We got to know each other as they invested with us and we looked after them. In 2016, after various discussions, they became shareholders of the group.’

LJ Partnership first came about in 2009, though it was not called that back then. Two years later, LJ Athene, the portfolio management part of the business, was set up when partner and chief investment officer Neil Beaton led a buy-out of his private client team at Deloitte, backed by merchant bank LJ Group.

The firm that was founded was later merged with sister subsidiary LJ Partnership to create the business it has become today, managing £11 billion in client assets, 40% of which is in its property franchise.

After the investment from Peterson Group, the business was well capitalised to take advantage of acquisition opportunities. It bought Guggenheim Investment Advisors (GIA), the Hong Kong division of investment and advisory firm Guggenheim Partners, in 2016 for an undisclosed sum.

It also acquired Guggenheim Partners’ investment groups in Geneva, Miami and Lisbon, adding 40 staff members and $3 billion (£2.3 billion) in assets.

This is part of a number of acquisitions LJ Partnership has made over its nine-year history.

‘There have been a number of small firms here in the UK like Salisbury Partners that we have brought on into the firm,’ de Meyer says.

Both de Meyer and partner Charlie Hamilton expect to continue making acquisitions, with de Meyer noting the sizable gap the firm has in continental Europe. He points out this is an important jurisdiction and will become more so as Brexit progresses.

Although de Meyer and Hamilton agree so far that the integration of these firms have been relatively painless it has left the firm operating under a number of legacy brands.

‘We have grown by acquisition and merger and have continued to operate under a lot of legacy brands in different parts of the world; we are Guggenheim Partners in Latin America, Guggenheim Investment Advisers in Switzerland or LJ Athene here in London. This is the opportunity to consolidate all those into one brand,’ explains de Meyer.

To mark the spirit of cooperation felt by the partners, the firm will rebrand in 2019 to Alvarium which is the Latin word for beehive.

‘As we look at nine years of trading and what we are going to be doing over the next five years, we are going to be becoming the one brand and signalling to the marketplace our intentions for the next stage.’

In fact, the firm has already kick-started this next phase by taking a 49% stake in merchant bank Lepe Partners, looking to build a platform for millennials.

De Meyer says: ‘Investment attitudes are changing, wealth is transitioning from the older to the younger generation. There is a lot of discussion about the greater control of wealth that will be in the hands of millennials by 2020, but what it means is attitudes change – people want to understand how attitudes are changing and how to respond to them.’

LJ Partnership is certainly a global business, with offices in eight locations, from New York to Auckland, and a 200-strong workforce.

Attracting corporate investors, such as Dilmun, is crucial as the firm seeks out growth and a way to address the needs of its international client base.

‘Being a global firm, being able to operate across borders from the Americas through Europe to Asia allows us to take the best practice compliance and regulatory procedures as the regulatory landscape changes in different parts of the world. But we try to be at the forefront in our response to those changes,’ de Meyer says.

Hamilton, who also serves as a senior adviser within LJ Investment Management, says that few independent firms have the reach to offer independent advice on investment issues to families globally.

‘We have continued to invest in businesses on the global stage. We feel that, in some ways, we are fairly unique in terms of the qualified investment teams we have globally.’

He says that the complexities that existed at the time of the global financial crisis – just as the firm was getting started – have returned, and the demand for ‘that independent global advice’ is really there.

‘Because the families and clients that we are typically talking to have a global element to all of them. In part, that is because we are now advising many future generations that we don’t know where they’re going to live, etc. So that’s why it is very important to keep investing in the global platform,’ Hamilton adds.

The company currently has 250 clients, who are typically ultra-high net worth families. According to its latest accounts for the year ended 31 December 2017, the firm reported a turnover of £33 million, which De Meyer says it is looking to increase to £50 million a year.

That is why Dilmun’s investment was so important, as it will help the business grow in the US. De Meyer adds that since the firm’s owners are from the Persian Gulf, it also opens the door for growth in the Middle East further down the line.

‘[In a shareholder] we look for someone who will engage with the business’ growth plans,’ Hamilton adds.

‘That’s been an important aspect of what we were looking for in a new shareholder, and certainly, they [Dilmun] have been very helpful to us over what has been a relatively short period of time.’

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