Pitcairn Update, April 2014
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Alex Scott and Marc Hendriks of the London-based firm SandAire first proposed the idea of a family office association. They shared their vision with Pitcairn and several other select firms and the seeds for the Wigmore Association were sown. Below, Marc Hendriks and Rick Pitcairn share the story of how the Wigmore Association evolved into the organization it is today.
What was the catalyst for starting the Wigmore Association?
Marc Hendriks: Initially, my colleague Alex Scott and I were focused on one particular challenge that affected how we served our clients. That was our ability to generate affordable, high quality research on investment managers in all asset classes and all geographic locations. We reached out to firms we knew to see if anyone was interested in sharing manager research.
We thought other family offices would make the best partners in this area because they don’t typically have their own products and they act in the best interests of their families.
Was there a vision of what the group would look like?
MH: I thought the members should be few in number to promote an intimate and open forum. Ideally, we wanted one member in each major geographical region because this would provide global coverage and the distance would minimize conflicts of interest between participating family offices. We also wanted the firms to commit to their chief investment officer attending the meetings.
How did Pitcairn come to be a founding member?
Rick Pitcairn: Dirk Jungé, Pitcairn’s chairman, has had a long-standing relationship with Alex Scott of SandAire, so Alex and Marc reached out to Dirk as they began shaping this distinctive entity.
MH: Pitcairn has solid research capabilities, which was the main thing we were interested in at the time. We also knew that Pitcairn had a client philosophy similar to our own (like other firms in the group), which would make collaboration and the sharing of information more productive and enjoyable.
What benefits do you think Wigmore brings to your firm’s clients?
MH: Initially, the main goal was that we would have better research on investment managers, with the obvious goal of enhancing our clients’ investment results. I hoped there would be additional benefits, but I didn’t dare look too far forward because I wasn’t sure this radical idea would even get off the ground.
RP: I have found that one of the most valuable benefits is the time we, the chief investment officers of each firm, spend talking together. When knowledgeable people get together to share ideas, debate strategy, and challenge each other’s assumptions, I think we’re bound to make better decisions and that’s good for everybody’s clients. (Click here to read Wigmore Global Connections Sharpen Pitcairn’s World View.)
MH: I agree. Originally, I thought the manager research exchange would be the most interesting aspect of our group, but, in fact, it is definitely the meetings. We exchange views and we discuss issues that are of general interest to all of us. When a firm’s CIO is better informed, clients benefit.
How does Wigmore affect individual firm’s manager selections?
RP: Even though all of our firms are influential enough to get just about any investment managers we want to come in and tell us about their strategies, there’s an extra benefit from our collective presence. When investment managers talk to all of us, they put in additional effort.
MH: Also, when we attend manager/analyst presentations together, each chief investment officer and each member firm sees things from a different perspective, which leads to a richer and more enlightening discussion with the managers and among ourselves.
Does Wigmore’s global aspect bring particular advantages?
RP: Having close relationships with colleagues around the world definitely promotes more in-depth understanding and insight into those regions. Also, our fellow members can sometimes open doors we couldn’t open on our own. For example, when we met in Brazil, our hosts, the Turim Family Office, brought in Arminio Fraga, former president of the Central Bank of Brazil. He is sometimes called the Paul Volcker of Brazil for his role in controlling runaway inflation and isn’t someone who would normally be in Pitcairn’s sphere.
Similarly, when we met in Germany, HQ Trust brought in professionals from the European Central Bank to meet with us. We had front row seats to the ECB’s response as the Cyprus credit crisis came to a head during our visit. Most importantly, we gained insight into the way the ECB operates, insight that will certainly be useful in dissecting the ECB’s response to any future situations.
How is Wigmore structured and how has it evolved?
MH: It seemed to me that once the group was established, the membership would collectively define the structure and that is what has happened.
RP: Wigmore has a fairly open format. There’s only a Chairman position that rotates among the member firms every two years. We are focused on the collaboration of investment minds so we get together to talk about our different philosophies, discuss strategies, and sometimes have investment managers or other financial professionals speak to us.
After our first few meetings, we started to look at global regions that weren’t represented in our group – Latin America and Asia. We are informal about how we accept new members, with a few absolute conditions. For example, we would not accept a firm that directly competes with a current member because that would be detrimental to the great dynamic we now have. If we couldn’t be honest and forthcoming, there would be no real value in our discussions.
MH: Just as with the original members, we prefer firms that have similarities in their business approach and client philosophy because that keeps our discussion more relevant to all members. In 2012, the Turim Family Office joined our group, which added a Latin American perspective to our conversations. We’ve moved from strong to stronger and now having seven members is a marvel.
One final question, how did the Wigmore Association get its name?
RP: We had our first meeting in 2011 at SandAire’s offices in London’s Mayfair section. Someone proposed calling our group the Mayfair Association, but in the end, we chose our name from the street where we first met – Wigmore Street.