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Stonehage sees the role for long/short strategies with higher volatility ahead

02 Aug 2019


Stonehage sees the role for long/short strategies with higher volatility ahead


“We are increasingly helping families to implement a formal risk-management process to identify, monitor and mitigate these risks. Family governance is important to agree decision-making frameworks when they are matters of principle rather than when it is personal. We help our clients in this regard by reviewing their existing governance framework and identifying potential areas for improvements”


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£854m fund manager: ‘Google will be a great dividend payer one day’

28 Jul 2019


£854m fund manager: ‘Google will be a great dividend payer one day’



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Tech stocks poised for a comeback, says equity manager

05 Jun 2019


Tech stocks poised for a comeback, says equity manager


Technology stocks, which have fallen sharply in recent weeks on heightened regulatory scrutiny and ongoing trade tensions, are poised for a recovery, according to Gerrit Smit, head of equity at international family office Stonehage Fleming.

Despite rallying 2.7% on Tuesday after US Federal Reserve chair Jerome Powell said the central bank could cut rates, the tech-heavy Nasdaq Composite remained 7.8% down from its close on May 3.

Tech stocks — including JSE-heavyweight Naspers and its Chinese associate, Tencent — have been on the back foot for weeks amid trade disputes between the US and other major economies.

Tencent has slipped 14.6% since May 3, while Naspers has declined about 9%, propped up by the weaker rand and plans to list its international internet assets in Europe. Naspers’s decline has dented the JSE, given its hefty weighting in local indices.

The tech sell-off intensified on Monday after US authorities signaled their intention to curb the size and power of sector giants.

“The anti-trust probes will affect only some businesses to some extent, and it may take very long before that happens,” said Smit. “In those cases, valuations already reflect some of those risks.”

Read full article >>


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Stonehage Fleming's flagship fund passes USD1 billion mark

20 May 2019


Stonehage Fleming's flagship fund passes USD1 billion mark


Assets under Management (“AUM”) for the Stonehage Fleming Global Best Ideas Equity Fund (“the Fund”) have passed the USD1bn mark.

Since launching in August 2013, the USD1.03bn Fund has attracted assets from private, professional and institutional investors and has returned 66.7%* over the last five years, compared to the Global Equity peer group average of 30.0 %** and the comparative index return of 40.0%*** (US $ terms).

Fund Manager Gerrit Smit manages a concentrated, high conviction portfolio of 27 high quality businesses that are chosen for their sustainable growth potential, strong management team, strategic competitive edge and value.

Current investments include some of the world’s best-known companies such as Visa, PayPal, Alphabet, Nike, Amazon, Microsoft and Estée Lauder. Technology names now make up 25.5%**** of the Fund, a reflection of the manager’s view that the technology sector will remain a dominant feature of daily life and business in general. It also has a high health care exposure.

Gerrit Smit argues that: “The technology sectors’ contribution towards growing productivity, providing key information to businesses and individuals alike and creating new business opportunities seems to be ever increasing. Many technology businesses are currently benefiting from wide adoption, high business demand, general high profitability, strong cash flow generation and strong balance sheets. Some large technology businesses have become good growing dividend payers, which further supports capital growth. Investors can therefore also consider some of these businesses from an income perspective.”

Commenting on the current market environment, Smit adds: “The combination of stable and constructive leading US economic indicators, continuing moderate economic expansion and earnings growth, low inflation expectations, only moderate interest rate rises and fair valuations has created a proverbial ‘Goldilocks’ investment environment. This ‘dull but constructive’ environment leads to more certainty and lower economic volatility and is more attractive to more investors. Whilst expectations for the level of economic expansion have recently been tempered, the outlook for continuing earnings growth remains on course for quality businesses.”

The Fund had previously been available exclusively to clients of Stonehage Fleming, but has been open to outside investors since 2016. It is now available on eleven platforms across South Africa and the UK.

* Source: Stonehage Fleming Investment Management Ltd (SFIM), for period 1 May 2014 to 30 April 2019 (Class B).

**IA Global $, for period 1 May 2014 to 30 April 2019. Source: Financial Express.

***MSCI World All Country $ TR, for period 1 May 2014 to 30 April 2019. Source: Bloomberg, MSCI.

****Source: Stonehage Fleming Investment Management Ltd (SFIM), to 30 April 2019.


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Stonehage sees the role for long/short strategies with higher volatility ahead


“We are increasingly helping families to implement a formal risk-management process to identify, monitor and mitigate these risks. Family governance is important to agree decision-making frameworks when they are matters of principle rather than when it is personal. We help our clients in this regard by reviewing their existing governance framework and identifying potential areas for improvements”


Email Copy Link


£854m fund manager: ‘Google will be a great dividend payer one day’



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Tech stocks poised for a comeback, says equity manager


Technology stocks, which have fallen sharply in recent weeks on heightened regulatory scrutiny and ongoing trade tensions, are poised for a recovery, according to Gerrit Smit, head of equity at international family office Stonehage Fleming.

Despite rallying 2.7% on Tuesday after US Federal Reserve chair Jerome Powell said the central bank could cut rates, the tech-heavy Nasdaq Composite remained 7.8% down from its close on May 3.

Tech stocks — including JSE-heavyweight Naspers and its Chinese associate, Tencent — have been on the back foot for weeks amid trade disputes between the US and other major economies.

Tencent has slipped 14.6% since May 3, while Naspers has declined about 9%, propped up by the weaker rand and plans to list its international internet assets in Europe. Naspers’s decline has dented the JSE, given its hefty weighting in local indices.

The tech sell-off intensified on Monday after US authorities signaled their intention to curb the size and power of sector giants.

“The anti-trust probes will affect only some businesses to some extent, and it may take very long before that happens,” said Smit. “In those cases, valuations already reflect some of those risks.”

Read full article >>


Email Copy Link


Stonehage Fleming's flagship fund passes USD1 billion mark


Assets under Management (“AUM”) for the Stonehage Fleming Global Best Ideas Equity Fund (“the Fund”) have passed the USD1bn mark.

Since launching in August 2013, the USD1.03bn Fund has attracted assets from private, professional and institutional investors and has returned 66.7%* over the last five years, compared to the Global Equity peer group average of 30.0 %** and the comparative index return of 40.0%*** (US $ terms).

Fund Manager Gerrit Smit manages a concentrated, high conviction portfolio of 27 high quality businesses that are chosen for their sustainable growth potential, strong management team, strategic competitive edge and value.

Current investments include some of the world’s best-known companies such as Visa, PayPal, Alphabet, Nike, Amazon, Microsoft and Estée Lauder. Technology names now make up 25.5%**** of the Fund, a reflection of the manager’s view that the technology sector will remain a dominant feature of daily life and business in general. It also has a high health care exposure.

Gerrit Smit argues that: “The technology sectors’ contribution towards growing productivity, providing key information to businesses and individuals alike and creating new business opportunities seems to be ever increasing. Many technology businesses are currently benefiting from wide adoption, high business demand, general high profitability, strong cash flow generation and strong balance sheets. Some large technology businesses have become good growing dividend payers, which further supports capital growth. Investors can therefore also consider some of these businesses from an income perspective.”

Commenting on the current market environment, Smit adds: “The combination of stable and constructive leading US economic indicators, continuing moderate economic expansion and earnings growth, low inflation expectations, only moderate interest rate rises and fair valuations has created a proverbial ‘Goldilocks’ investment environment. This ‘dull but constructive’ environment leads to more certainty and lower economic volatility and is more attractive to more investors. Whilst expectations for the level of economic expansion have recently been tempered, the outlook for continuing earnings growth remains on course for quality businesses.”

The Fund had previously been available exclusively to clients of Stonehage Fleming, but has been open to outside investors since 2016. It is now available on eleven platforms across South Africa and the UK.

* Source: Stonehage Fleming Investment Management Ltd (SFIM), for period 1 May 2014 to 30 April 2019 (Class B).

**IA Global $, for period 1 May 2014 to 30 April 2019. Source: Financial Express.

***MSCI World All Country $ TR, for period 1 May 2014 to 30 April 2019. Source: Bloomberg, MSCI.

****Source: Stonehage Fleming Investment Management Ltd (SFIM), to 30 April 2019.


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Should you invest in Uber?

14 May 2019


Should you invest in Uber?


Gerrit Smit, Head of Equity Management, believes it is worth comparing Uber’s financial fundamentals with those of some of the more established tech stocks.

Read the full Uber IPO >>


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The first-gen wealth creators who struggle to talk to their kids about money

10 May 2019


The first-gen wealth creators who struggle to talk to their kids about money


Every culture has its own version, but in Britain the saying goes: from shirtsleeves to shirtsleeves in three generations. The anecdote about how family money can easily disappear is particularly poignant for entrepreneurs trying to navigate whether, or how, to pass along their wealth to their children.

Compared to the institutionally wealthy, who may see themselves as custodians of family wealth, entrepreneurs or first-generation wealth creators can have a more difficult time talking to the next generation about money.

Read full article >>


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Stonehage Fleming appoints Business Development Officer

09 May 2019


Stonehage Fleming appoints Business Development Officer


Stonehage Fleming, one of the world’s leading independently owned family offices, announces the appointment of Julie Gauthier as Business Development Officer in Switzerland.

Julie will report to Johan Van Niekerk, Head of Family Office (Neuchatel) and will be a member of the Business Development team, working between all three of Stonehage Fleming’s Swiss offices. She will be responsible for the development and management of relationships with potential clients and introducers of business.

Julie’s role is newly created and effective immediately.

With ten years’ wealth planning and financial service experience, Julie joins Stonehage Fleming from Geneva Management Group (“GMG”), where she was Vice President of Business Development. At GMG she was responsible for client base expansion and new business acquisitions across the globe. During her previous role as Sales Manager, Julie also advised GMG clients on succession planning and asset protection through life insurance structures.

Commenting on the appointment, Johan Van Niekerk said: “We are very pleased to welcome Julie as our newly appointed Business Development Officer. Julie has an impressive career and extensive experience in the development of sales and new business acquisitions.” “Her appointment demonstrates our commitment to further growing and building the business as we continue to strive to lead the industry as a truly international family office.”

Julie Gauthier said: “I am thrilled to join Stonehage Fleming’s Business Development team at such an exciting time in the Group’s development. I look forward to further expanding the Group’s business and client base to widen their integrated expertise further across the globe.”


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Balancing investment return with social responsibility

06 May 2019


Balancing investment return with social responsibility


The results of the latest research report compiled by international family office Stonehage Fleming have revealed a gap between the mind-set and implementation of responsible investing. The Four Pillars of Capital Report: The Next Chapter showed that while over 75% of ultra-high net worth families acknowledged a preference for responsible investment, only 21% are actively incorporating a values-based approach in investment portfolios.

This contrast is likely attributed to a confusion about the wide range of SRI (Socially Responsible Investment) products on offer by asset managers, says Reyneke Van Wyk, Head of Stonehage Flemings’ Investment Division in South Africa. While respondents demonstrated an increasing interest in SRI, which aims to generate specific social or environmental benefits in addition to financial returns, they also confessed that on a practical level it was not as easy in the traditional investment world to do ‘good’ while also generating benchmark-beating returns for investors.

“Historically, investors have primarily been concerned with the end rather than the means, putting portfolio performance as the primary focus,” said Van Wyk. “However, as was highlighted in our Four Pillars of Capital report, this attitude is changing. For many families and private investors, the gap between investor and investment is closing.”

Considering the variety of socially responsible investing philosophies open to todays’ investors, Stonehage Fleming believes that Environmental, Social and Governance (ESG) investing marries well with a traditional investment management approach and with the long-term investing approach of UHNW* families.

Read full article >>


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Should you invest in Uber?


Gerrit Smit, Head of Equity Management, believes it is worth comparing Uber’s financial fundamentals with those of some of the more established tech stocks.

Read the full Uber IPO >>


Email Copy Link


The first-gen wealth creators who struggle to talk to their kids about money


Every culture has its own version, but in Britain the saying goes: from shirtsleeves to shirtsleeves in three generations. The anecdote about how family money can easily disappear is particularly poignant for entrepreneurs trying to navigate whether, or how, to pass along their wealth to their children.

Compared to the institutionally wealthy, who may see themselves as custodians of family wealth, entrepreneurs or first-generation wealth creators can have a more difficult time talking to the next generation about money.

Read full article >>


Email Copy Link


Stonehage Fleming appoints Business Development Officer


Stonehage Fleming, one of the world’s leading independently owned family offices, announces the appointment of Julie Gauthier as Business Development Officer in Switzerland.

Julie will report to Johan Van Niekerk, Head of Family Office (Neuchatel) and will be a member of the Business Development team, working between all three of Stonehage Fleming’s Swiss offices. She will be responsible for the development and management of relationships with potential clients and introducers of business.

Julie’s role is newly created and effective immediately.

With ten years’ wealth planning and financial service experience, Julie joins Stonehage Fleming from Geneva Management Group (“GMG”), where she was Vice President of Business Development. At GMG she was responsible for client base expansion and new business acquisitions across the globe. During her previous role as Sales Manager, Julie also advised GMG clients on succession planning and asset protection through life insurance structures.

Commenting on the appointment, Johan Van Niekerk said: “We are very pleased to welcome Julie as our newly appointed Business Development Officer. Julie has an impressive career and extensive experience in the development of sales and new business acquisitions.” “Her appointment demonstrates our commitment to further growing and building the business as we continue to strive to lead the industry as a truly international family office.”

Julie Gauthier said: “I am thrilled to join Stonehage Fleming’s Business Development team at such an exciting time in the Group’s development. I look forward to further expanding the Group’s business and client base to widen their integrated expertise further across the globe.”


Email Copy Link


Balancing investment return with social responsibility


The results of the latest research report compiled by international family office Stonehage Fleming have revealed a gap between the mind-set and implementation of responsible investing. The Four Pillars of Capital Report: The Next Chapter showed that while over 75% of ultra-high net worth families acknowledged a preference for responsible investment, only 21% are actively incorporating a values-based approach in investment portfolios.

This contrast is likely attributed to a confusion about the wide range of SRI (Socially Responsible Investment) products on offer by asset managers, says Reyneke Van Wyk, Head of Stonehage Flemings’ Investment Division in South Africa. While respondents demonstrated an increasing interest in SRI, which aims to generate specific social or environmental benefits in addition to financial returns, they also confessed that on a practical level it was not as easy in the traditional investment world to do ‘good’ while also generating benchmark-beating returns for investors.

“Historically, investors have primarily been concerned with the end rather than the means, putting portfolio performance as the primary focus,” said Van Wyk. “However, as was highlighted in our Four Pillars of Capital report, this attitude is changing. For many families and private investors, the gap between investor and investment is closing.”

Considering the variety of socially responsible investing philosophies open to todays’ investors, Stonehage Fleming believes that Environmental, Social and Governance (ESG) investing marries well with a traditional investment management approach and with the long-term investing approach of UHNW* families.

Read full article >>


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The families giving away their children's inheritance to charity

03 May 2019


The families giving away their children's inheritance to charity



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PBI Germany Awards winners announced

03 May 2019


PBI Germany Awards winners announced


Private Banker International’s Germany Awards were announced on Tuesday at a ceremony in Frankfurt. Stonehage Fleming were delighted to win Outstanding Family Office Proposition in Germany.

These awards are an extension of the well established Private Banker International Global Awards that took place in Singapore last year. These awards are designed to identify leading institutions that are setting new standards in private banking and wealth management in Germany. The shortlist of finalists underwent a rigorous selection process and our independent judging panel chose the awards winners.


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What Happens When Billionaires' Children Inherit

25 Apr 2019


What Happens When Billionaires' Children Inherit


It is not always about beautiful homes, lush holidays, and expensive educations. When sons and daughters of wealthy families inherit their entitled fortunes, there are often dramatic side effects. And this is causing many-a-billionaire to re-think what they leave behind.

The Real Rich Kids Imagine being given everything you could ever want from a young age. The best education, holidays and homes, then told you never really need to work because your family has more than enough money. A dreamy scenario for some. But there is normally a side effect: wealth robs children of motivation. The more money that is given to children from a young age, the less passion and motivation they have, say wealth advisors. “I’ve worked with next-generation family members who say ‘why go to university, what’s the point?

No one’s going to be impressed with what I do, because my entrepreneurial parents have nailed life,’” says Lucy Birtwistle, a relationship manager at Stonehage Fleming, a multi-family office. Her work often involves meeting with these disenfranchised children and trying to find their purpose and vision. “Each individual needs a purpose, a reason to get up in the morning”.


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Fears of an imminent US recession are premature

18 Apr 2019


Fears of an imminent US recession are premature


Recently, the news has been littered with headlines about an inverted yield curve, long seen as a strong indicator of oncoming economic recession in the United States.

The headlines were prompted specifically by the inversion of the 3-month/10-year yield curve. It seems to be too early, on a fundamental basis, to have grave concerns about an imminent US recession, though.

In fact, the 3-month/10-year yield curve only inverted for a few days before returning to a positive reading.

Added to this, a 3-month yield is an unnaturally short maturity to consider in the context of a potential US recession. Historically this curve provided the market with an early warning of, on average, 22-months. That would imply a predicted recession in the first quarter of 2021, if the curve were to invert from here on a sustainable basis, which it shows no signs of doing yet. This does not raise the immediate alarm bells the financial press would have us hear.

Read full article >>


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The families giving away their children's inheritance to charity



Email Copy Link


PBI Germany Awards winners announced


Private Banker International’s Germany Awards were announced on Tuesday at a ceremony in Frankfurt. Stonehage Fleming were delighted to win Outstanding Family Office Proposition in Germany.

These awards are an extension of the well established Private Banker International Global Awards that took place in Singapore last year. These awards are designed to identify leading institutions that are setting new standards in private banking and wealth management in Germany. The shortlist of finalists underwent a rigorous selection process and our independent judging panel chose the awards winners.


Email Copy Link


What Happens When Billionaires' Children Inherit


It is not always about beautiful homes, lush holidays, and expensive educations. When sons and daughters of wealthy families inherit their entitled fortunes, there are often dramatic side effects. And this is causing many-a-billionaire to re-think what they leave behind.

The Real Rich Kids Imagine being given everything you could ever want from a young age. The best education, holidays and homes, then told you never really need to work because your family has more than enough money. A dreamy scenario for some. But there is normally a side effect: wealth robs children of motivation. The more money that is given to children from a young age, the less passion and motivation they have, say wealth advisors. “I’ve worked with next-generation family members who say ‘why go to university, what’s the point?

No one’s going to be impressed with what I do, because my entrepreneurial parents have nailed life,’” says Lucy Birtwistle, a relationship manager at Stonehage Fleming, a multi-family office. Her work often involves meeting with these disenfranchised children and trying to find their purpose and vision. “Each individual needs a purpose, a reason to get up in the morning”.


Email Copy Link


Fears of an imminent US recession are premature


Recently, the news has been littered with headlines about an inverted yield curve, long seen as a strong indicator of oncoming economic recession in the United States.

The headlines were prompted specifically by the inversion of the 3-month/10-year yield curve. It seems to be too early, on a fundamental basis, to have grave concerns about an imminent US recession, though.

In fact, the 3-month/10-year yield curve only inverted for a few days before returning to a positive reading.

Added to this, a 3-month yield is an unnaturally short maturity to consider in the context of a potential US recession. Historically this curve provided the market with an early warning of, on average, 22-months. That would imply a predicted recession in the first quarter of 2021, if the curve were to invert from here on a sustainable basis, which it shows no signs of doing yet. This does not raise the immediate alarm bells the financial press would have us hear.

Read full article >>


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Insights

Marietjie Geldenhuys – Investing in China

Marietjie Geldenhuys, Client Portfolio Analyst in Stonehage Fleming’s Investment Division in South Africa talks about Investing in China

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Quarterly Investment letter

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