Saranac Partners recorded another hefty loss in 2017, as it continues to heavily invest in the business.
The firm reported a loss of £13.6 million last year, which is an improvement from 2016, when it posted a pre-tax loss of £14.3 million.
The company has been on a hiring spree since its launch, which has resulted in staff costs rising to £10.3 million, contributing to the total loss.
As the young wealth management business increased its headcount, employee expenses rose by 11.8%. Directors’ remunerations, meanwhile, increased by 105.5% to £1.2 million.
Today, Saranac’s headcount stands at 46, which reflects the company’s ambitious plans under new managing partner Tanvi Davda (pictured). The company declined to disclose its assets under administration.
A spokeswoman for Saranac said the results were in line with expectations and reflected a period of significant investment in the business.
‘This has entailed a relatively high initial capital expenditure relative to our assets under administration, as we grow our client base. Our expenditure is forecast to remain stable as our revenue continues to grow,’ she said.
Over the 12 months to the end of December, Saranac’s revenue totalled £1.2 million. Around £432,000 of this figure came from investment activities, while £756,000 was generated by the firm’s wealth planning, financing and private capital divisions.
During 2017, a £17.3 million non-interest-bearing loan provided by Saranac founder Tom Kalaris, the former Barclays Wealth chief, was converted into 2.5 million ordinary C-shares with a nominal value of £25 million. This formed part of a £40 million fundraising effort.
In addition, £6 million of subordinated debt was converted from existing investors in February. A spokesperson said that this formed part of Saranac’s funding and capitalisation process.
Meanwhile, the wealth management business completed a £17.5 million fundraise earlier this year, which included backing from Standard Life Aberdeen and emerging markets investor Jim Mellon.
‘We are in a prime position to significantly grow our business over the coming years. The capital raise will support the firm’s growth ambitions,’ the spokeswoman added.