Rupert Caldecott is a man from a very different time, one before wealth management became just as much about paperwork as taking care of clients.
With a short anecdote from his time at Cazenove Capital Management, he explains what this means: ‘I had inherited a client. He was the monarch of a certain European state and whoever had signed him off originally had said “we know who he is”. I got a call six months later from the compliance people saying that the said monarch had not been properly [checked] for money laundering.
‘So they said “would you please go do that”. I summoned up the courage I had – which was probably not very much – and said “I’m sorry if you want this guy’s signature you can ask him because I’m not going to, it is just bonkers”.’
After what he describes as a lot of huffing and puffing, the compliance team finally agreed with him, but at the end of the process he was faced with one question: when does client vetting actually become farcical?
Caldecott, founder and chief executive of RM Caldecott & Partners, has had an impressive career spanning 44-years, rubbing shoulders with the likes Bruno Schroder and the British royal family.
Back in the early 1980s he spent time in Australia and Singapore working for Schroders, he then went on to set up a brokerage business in Japan.
Before moving to Cazenove in the early 2000s, he returned to London to run a small business managing money for the Schroder family and friends.
But it was the call of his friend Andrew Dalton that led him to Dalton Strategic Partnership, which then saw him setting up RM Caldecott & Partners at the tender age of 65.
The decision to buy out the wealth management arm of Dalton Strategic Partners came after a prolonged period where Caldecott felt the company was neglecting its private client business.
‘When [Andrew Dalton] died [in 2011], the fellow that took over from him was more interested in the institutional side of the business, the unit trust business.’
Finally in October 2017, Caldecott and his colleague Neill Blanks took the leap and formed the new business under the name of RM Caldecott & Partners.
Former Waverton Investment Management chief executive Hugh Grootenhuis, and House of Lords member Viscount Tom Chandos, are also partners in the firm. Although now separated businesses, Dalton Strategic Partners holds a 19.9% stake in RM Caldecott & Partners.
‘We are all, with the exception of Neill, on the wrong side of 60 so we need to get in a new generation really,’ Caldecott says.
He adds: ‘In a sense asset allocation is an odd activity in that it does not necessarily get better with age.’
As a result he is definitely looking to bring in some new blood to the business, hiring two more managers which would bring the total to six.
After the buyout, Caldecott says that the business managed to retain all of the wealth clients, with total assets of $100 million (£76 million). He hopes that under his own banner he will have the opportunity to triple or quadruple that figure to $300 million or $400 million.
Going back to how newer compliance rules are creating challenges for smaller firms, however, he points out that it is difficult to attract new clients as ‘it is much more difficult for people to change managers – which is rather irritating at the moment’.
He thinks that some of the rules are giving established firms an advantage, even going as far as claiming that the difficulties in switching wealth managers amounts to ‘market distortion’.
He says the difference in performance between some firms is a mere 1% or 3% a year on average, making him question: ‘If you are saying that for 1% to 3% you have to sign this bloody load of documents, is that worth it?’
As part of the move, he also took the Melchior Global Conservative fund that he and Blanks have been managing for the last five years.
However, despite respectable performance figures, the fund is still languishing at around £8 million in assets.
Over five years to the end of May the fund has returned 23.7%, beating the peer group average return of 19.6%. It carries an annual management fee of 0.5%.
‘What you can see here is we have relatively good performance and we have the princely sum of £8 million and all of the others are hundreds of millions.
‘It has considerable potential, it is something that has eminently better performance than a lot of the much bigger funds and I think there’s a connection there because a lot of these funds are just too bloody big and ours will be small whatever happens.’
Although the fund also serves as the basis for the firm’s segregated client portfolios, Caldecott states that they are not that conservative.
‘The equity portion, for example, has had nothing in the UK for the last year and a half, which actually has been the right thing. But for a UK house to have nothing in the UK could probably be considered mildly eccentric.’
Caldecott says that he prefers to take the risk in equities and then balance it out with some relatively low risk alternatives.
The business offers this tailored individual portfolio service at 0.75% per annum for those investing over £1 million and 1% for those investing below that figure.
While his career has included managing quite large sums for quite high profile people, he does not believe in setting a client minimum because you never really know the true worth of a client, Caldecott says.
‘A guy came into Schroders to see us, off the street, I did not know at the time but he was actually from a very well-known European family.
‘He said [our proposition] was very interesting, took out a chequebook and wrote a cheque for £1 million.
‘And then a year later he came back and said you have done alright and he sent us another £19 million to take it up to the £20 million he had always intended it to be.’
This persuaded him that having a set minimum is not very sensible, ‘apart from being bloody rude’.
‘Thank God we didn’t say come back when you have your passport on you,’ he laughs.