Supplement 2009 - Barrister Magazine

Transcription

the barrister
LifeStyle
Supplement 2009
Investment
Management
A First Class Service
By Gerry Callaghan, Sales & Marketing
Director Aon Limited
4
6
Glorious Goodwood
By Rob Widdows
The Jamaica Experience
Understanding
your
requirements
Setting
Strategy
By Linda Hudson
Define
Investment
Policy
Working
with You
By Shelley-Anne Claircourt
By Anne Gregory-Jones
By Stuart Fowler
Passing it on while the going is rough
By Peter Scott and Clare Savory
At Rensburg Sheppards we don’t just manage your
investments, we look after you and your family’s
financial affairs over the years and through every stage,
from assessing your needs to meeting your objectives.
To find out more about how we build long term
relationships and create solutions that are right for
you and your circumstances, please contact
Chris Sandford
2 Gresham Street, London, EC2V 7QN
Tel: +44 (0)20 7597 1166
Email: [email protected]
With over £14bn of client funds under management,
this makes Rensburg Sheppards one of the UK’s top 10
independent investment management firms.
Professional investment
management with a
personal approach.
A Guide: Investing in Traded Life Policies
By Jeremy Leach, MD, Managing Partners Limited
The ‘Me’ Generation
22
Sailing with a Gulet in Croatia
26
Handel House Museum: Handel’s Legacy250th Anniversary Year
30
Escape the rat race
34
Sweeping between the traditional
gateposts and rounding the corner
38
Safari Styles
Michael Amherst and David Maddock
By Tom Owen 24
28
Implementation
Living off capital:
understanding drawdown
12
16
Reporting
Making best use of the tax concessions
applied to savings
Mike Fosberry and Frank Akers-Douglas
10
Review
London Clubs - Bleasure is the
new buzz word in travel
Financial and tax planning
tips in the current climate
By Claire Barton
By In2Sail Ltd
32
36
By Emma Holifield, Indigo PR
By Cleopatra Gichuki
40
www.rensburgsheppards.co.uk
Member firm of the London Stock Exchange. Member of LIFFE. Authorised and regulated by the Financial Services Authority.
Rensburg Sheppards Investment Management Limited is registered in England. Registered No. 2122340. Registered Office: Quayside House Canal Wharf Leeds LS11 5PU.
Offices at: Belfast Cheltenham Farnham Glasgow Leeds Liverpool London Manchester Reigate Sheffield.
Life style Editor: Nicholas Jones
Assistant Editor: Linda Hudson
A first class service…
A first class service is one of the most important
things that a company can offer you. To know
that your needs are being taken care of, without
hassle, is something that sets apart the business
that you want to deal with from those that you
do not.
This is because your time is important and you
want to spend it enjoying your lifestyle. Whilst
arranging insurance to protect your assets is
necessary, it should not take away from the
time you spend experiencing them.
That is why Aon offer you a dedicated Client
Manager, who will understand your needs,
manage your insurance portfolio and has a
wealth of experience in the high net worth
insurance market.
Your Client Manager could offer you an
insurance portfolio that covers:
Home and overseas property insurance
Whether you own a summer retreat in the south
of France or a ski lodge in the Swiss Alps, it’s
important to take care of your overseas property
needs with an experienced broker who speaks
your language.
Insuring a property overseas and its contents
is rarely as straightforward as arranging cover
for your UK home, and often involves language
barriers, local legislation, different currencies
and large distances. All these issues and more
can make it hard to be sure that you’ve got all
the cover you need.
So whether your home is in the UK or abroad,
we could offer you an insurance policy that
gives you the cover that you need.
Specialist motor insurance
As a specialist car owner you already recognise
that quality, design and handling are what
matters when choosing your car. At Aon, we
believe you should expect the same from your
chosen insurance provider. Our extensive
experience in providing specialised car
insurance means we understand your passion
and appreciate your needs.
So whether you own a high performance
vehicle, a classic or vintage car, a family fleet
or even a car collection, we’ll work together to
arrange a solution that’s right for you.
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the barrister ¦ Lifestyle supplement
Yacht and motorboat insurance
Aon offers specialist insurance for private
clients looking to protect their yacht, motorboat
or pleasure craft. Owning a yacht or motorboat
gives you an enormous amount of freedom, and
we want to help you make sure that nothing
gets in the way of your adventures. Having
the right insurance will allow you to explore,
confident that you’re properly covered.
This policy could include cover for a wide range
of situations, such as loss or damage to your
vessel and personal possessions, public and
employers’ liability and personal accident cover.
We’ll tailor a policy that’s right for you and your
vessel, so you’ll have the cover that you need.
And more…
We could also offer you solutions for your
travel insurance requirements, fine art,
antiques, jewellery and collectables.
By placing your personal insurance with Aon
you will have one point of contact should you
have any questions about your policies.
Aon has a global presence, giving us the
strength to get you the best possible deal. We
use our size to access a panel of high net worth
insurers, ensuring that you get the cover that is
right for you.
Want to take your car across to Europe for
a weekend break? How about flying to an
exotic location for a surprise family holiday?
Maybe you would like to start renting out your
overseas property early in the season when
you rarely use it? A quick call to your Client
Manager could offer you an insurance solution
for your situation.
If you believe that service really is the most
important part of doing business, deal with
someone who shares your view. To find out
what we can do for you call us today on
0845 671 1069.
Discerning.
Insurance: from your
property portfolio to
your fine wine collection
Aon’s exclusive Private Clients division offers
tailored insurance solutions to match your
personal lifestyle. So whether you enjoy a
collection of fine wines, have homes in the UK
or abroad or own a prized classic car, your
dedicated Client Manager will look after your
insurance needs.
What’s more, Aon’s unrivalled resources as the
world’s largest insurance broker allows us to use
our global coverage and negotiating power to
deliver the best policy for you.
For more information call the Aon Private Clients
on
0845 671 1069 or for more information visit
www.privateclients.aon.co.uk
Aon Limited is authorised and regulated by
the Financial Services Authority in respect of
insurance mediation only. Aon Limited’s FSA
number is 310451. Aon Limited, 8 Devonshire
Square, London EC2M 4PL. Registered in
London no. 210725. Telephone calls may be
monitored and recorded. FP5452-BARADV-0209
Aon Limited is authorised and regulated by the Financial Services Authority in
respect of insurance mediation activities only. Registered office: Aon Limited,
8 Devonshire Square, London, EC2M 4PL. Telephone calls may be monitored and
recorded for training purposes. No. 1 global insurance broker by brokerage
revenues for 2006 and 2007 (Best’s Insurance News, March 2007; July 2008)
FP 5458-BAR-0209
Financial and tax planning
tips in the current climate
Mike Fosberry and Frank Akers-Douglas of Smith & Williamson
provide a round-up of practical investment and tax planning ideas
Given the dramatic falls
in share and property
values and interest rates,
it is difficult to find a safe
and acceptable home for your
money. We highlight below
some possible investment options
and combine this with timely tax
and financial planning tips in these
uncertain times.
Corporate bonds
These are effectively loans to a company on
which a fixed rate of interest is paid, with the
original investment returned on a set date. How
much income the bond pays depends largely
on the strength of the company. While we can expect
default levels to rise, investors can secure high rates of interest. Many
investment grade bonds are paying a yield (interest) of 7% or more,
which clearly compares well with current bank interest rates although
they do of course carry more risk. These rates are also much higher
than those available from government bonds and if the yield differential
should narrow there is also the possibility of capital appreciation.
Government securities (gilts)
These bonds are a way of ‘lending’ money to the government in return
for a fixed rate of interest over a set period. This type of investment is
intended to provide a regular, reliable income. At present, these offer
reasonable value with yields of circa 4% on 10 year UK Government
bonds.
Index linked Gilts
These are also worth looking at. Assuming that the government pursues
its policy of quantitative easing, this will lead to an increase in the money
supply which normally results in a rise in inflation – although this is
unlikely to occur before the latter part of 2010 as it will take some time
for current deflationary pressures to work through. While there is no
immediate rush to get into these type of bonds, they are something to
consider because markets look 12 – 18 months ahead and prices move
accordingly. Both capital and income are index linked.
Gains on Government bonds are free from capital gains tax (CGT).
Structured products
These can provide capital security and so they will be popular with
investors who are seeking equity style returns whilst protecting the
downside risk. However, the key issue surrounding these products is
counter-party risk since they typically run for four to five years or more.
Investors must therefore be happy that the underwriting institution
provides capital security and that it will be able to meet its future
obligations. Some structured products link returns to the FTSE’s total
return index (which includes dividend income thereby helping to give
a better return). These are complex products and professional advice is
essential.
Pension planning
Pension investment is highly tax efficient for higher earners since for
every £60 put in, the government adds £40. The maximum contribution
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on which tax relief is available is the lower of your earnings or the annual
allowance of £235,000*. Depending upon your circumstances, it can be
possible to use two annual allowances in one year. Furthermore, anyone
approaching retirement should be aware that in the year when they
start to draw their pension benefits, tax relievable contributions are only
limited by earnings.
Pension contributions of up to £3,600 (gross) in each tax year can also
be made on behalf of a non-earning spouse, children or grandchildren,
representing a useful way to make tax-efficient investments on their
behalf.
Barristers in chambers could also consider setting up a practice SIPP
whereby their pension investments are combined with other members
of their chambers. These arrangements are very flexible and allow
investment in commercial property - including the chamber’s own office.
As tax relief of up to 40% is allowed on contributions this potentially
makes it a highly efficient means to acquire office accommodation, not
least since property prices are currently relatively low. Moreover, if
property is bought, the fund can obtain a loan of up to 50% of its value.
Groups need a minimum of £200,000 to set up a practice SIPP, with a
minimum contribution of £3,000 per member
* The current Statutory Lifetime Allowance on pension investment rises
to £1.75m in 2009/10, and to £1.8m in 2010/11, remaining at this level
until 2015/16.
Tax efficient products
Remember that some National Savings products generate tax-free
returns so that they are attractive particularly for higher rate taxpayers
and that investments in ISAs are tax free. The annual £7,200 ISA
subscription can be invested wholly into stocks and shares, with a
maximum of £3,600 invested in cash. A cash ISA could also be considered
for children aged over 16 years. It’s worth bearing in mind that ISAs
can, if appropriate, be passed to other members of the family, unlike
traditional pensions. Similarly funds can be cashed in at any time,
making them very flexible investments.
For those with larger sums to invest and who are prepared to consider a
higher element of risk, enterprise investment schemes (EISs) and venture
capital trusts (VCTs) provide an option. Typically involving investment
of sums in excess of £20,000 these products offer the potential for
capital growth. EISs and VCTs offer the potential to defer a CGT charge
or to benefit from income tax relief. The ability to defer CGT could be
extremely valuable for those who have suffered CGT at a rate of up to
40% on a gain realised in the last three years, as by investing in an EIS
this gain can be brought into the 18% tax regime.
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Enterprise Investment Schemes offer 20% income tax relief on
investments of up to £500,000. Inheritance tax (IHT) protection
is triggered after two years and there is unlimited CGT deferral.
Venture Capital Trusts provide 30% income tax relief on
investments up to £200,000, dividends can be paid tax-free and
there is no CGT on sale providing the investment is held for
five years.
a distinctive
choice
Distinctive range of wealth management services for
legal professionals and their clients
Smith & Williamson has been looking after the financial affairs of private clients, their families and business
interests for more than a century.
Our specialist private client team provides fully co-ordinated tax, trust, investment management, pensions
and personal financial services.
These services include:
•
•
•
•
•
•
Long-term tax planning
Tax-efficient investments
Creation, administration and winding up of trusts
Personal financial planning and pensions, including SIPPs
Discretionary and advisory investment services – £7.8 billion of funds under management and advice*
Private banking
For further information contact:
Personal tax & trusts
Frank Akers-Douglas
020 7131 4232
[email protected]
Investment & banking
David Cobb
020 7131 4681
[email protected]
Personal financial planning
Mike Fosberry
020 7131 4250
[email protected]
www.smith.williamson.co.uk
Offices: London, Belfast, Birmingham, Bristol, Dublin, Glasgow, Guildford, Maidstone, North London, Salisbury, Southampton and Worcester
Estate planning : taking advantage of the downturn
With property and stock market values severely depressed, there may be
Smith & Williamson Limited • Smith & Williamson Investment Management Limited • Smith & Williamson Financial Services Limited
*as at 31/10/08
accountancy
•
financial services
•
investment
•
private banking
•
tax
opportunities for more tax-efficient estate planning than a year or two
ago. If an individual is considering gifting assets to the next generation,
then this may be a good time as IHT liabilities can potentially be
reduced by gifting say, an investment property or shares at their current
values. A capital gains charge may be still triggered, but it is likely to be
significantly less than if it had been made a couple of years ago. Clearly,
each person’s situation is different, but this may be one area where the
cloud of economic uncertainty has a silver lining.
Second or holiday homes
Faced with falling house prices and rising household bills, people with a
second home may consider selling their property to release a cash lump
sum and reduce outgoings.
Although individuals and married couples (or civil partners) can only
have one main home at any time for the purposes of the principal private
residence (PPR) exemption, gains attributable to the last three years of
ownership are ignored if the property has been the main residence at any
time during ownership. So if you have a second home be sure to nominate
one of your properties as your PPR – if you don’t the taxman decides for
you.
It can be possible to claim this relief for both properties by making
an election stating that one of the properties is the main one and
subsequently nominating the other property. HMRC’s own CGT manual
states that you can switch the election from one property to the other
after just one week thereby securing the three year exemption on both
properties.
the ‘best’ (which is very difficult to do) it’s better to aim for a satisfactory
range of investments which gives exposure to a broad set of assets. Put
simply, avoid putting all your eggs in one basket.
Investment studies have determined that the major driver of investment
performance is asset allocation rather than stock or fund selection.
Smith & Williamson runs seminars on the Practice SIPP and other tax
and financial planning topics. For details contact kate.harrison@smith.
williamson.co.uk or Tel 020 7131 4228
Mike Fosberry and Frank Akers-Douglas are both directors at Smith &
Williamson and are part of the firm’s multi-disciplinary Family Office
service. The firm provides a broad range of services including investment
management, financial advisory services, tax, private banking and
accountancy to private clients, professional practices, companies and nonprofit organisations.
[email protected] Tel. 020 7131 4250
Frank Akers-Douglas
[email protected] Tel 020 7131 4232
www.smith.williamson.co.uk
Smith & Williamson Limited
Investment techniques
Smith & Williamson Financial Services Limited
Authorised and regulated by the Financial Services Authority
Suppose you invest £1000 into equities each month and the market
swings down every other month. On each downturn you get more
shares or units for your £1000, which would be worth yet more on each
upturn. In a bear market, pound cost averaging means you can build up
an investment which can then benefit from a recovery without having
to worry about finding the bottom of the market which is of course
impossible to predict!
Asset allocation refers to the spread of investment across different types
of assets (eg stocks, bonds, property, commodities or collectibles). All
too often, people are concerned about which specific fund or stock to
invest in, but arguably they should be more focused on a good mix of
investments. While one property fund, for example, may perform better
than others, all funds in the sector are likely to rise and fall in response
to external events. For that reason, rather than concentrating on picking
Mixing business and pleasure in a way no one else can
For further information:
The ‘election’ process simply means writing to the taxman stating which
property is your main home. The nomination can be backdated by up to
two years and even made after one of the properties has been sold.
Pound cost averaging is an investment approach which means that
money is invested at regular intervals rather than as an occasional lump
sum. So, if shares are being bought, more can be acquired when prices are
low, and similarly fewer are bought when prices are high. It is generally
accepted that investors are better off using this approach in falling or
volatile markets, such as we are facing today.
G O O DWO O D
Regulated by the Institute of Chartered Accountants in England and
Wales for a range of investment business activities. A member of Nexia
International
Smith & Williamson Personal Financial Planning
A division of Smith & Williamson Financial Services Limited which is
authorised and regulated by the Financial Services Authority
Disclaimer
By necessity, this briefing can only provide a short overview and it is
essential to seek professional advice before applying the contents of this
article. No responsibility can be taken for any loss arising from action
taken or refrained from on the basis of this publication. Details correct at
time of writing.
Note to editors
Smith & Williamson is an independent professional and financial services
group employing over 1,500 people. The group is a leading provider of
investment management, financial advisory and accountancy services to
private clients, professional practices and mid-to-large corporates. The
group operates from offices in London, Belfast, Birmingham, Bristol,
Dublin, Glasgow, Guildford, Maidstone, North London, Salisbury,
Southampton, and Worcester.
Imagine spending a day on the motor circuit, followed by dinner in
Goodwood House, a night in the Hotel, a conference the next morning
before a round of golf and an evening of horseracing.
For all hospitality, golf days, meeting venue or conference enquiries,
please call 01243 755042 or email [email protected]
08
www.goodwood.co.uk
Glorious Goodwood
By Rob Widdows
When the Earl of March
launched the Goodwood
Festival of Speed in
1993 grown men were
in tears. At last a
chance for Dads to
show their sons
their boyhood
heroes and
the mighty
machines
that made
them
famous.
This
passion
for motor
sport at
Goodwood
is as true
today as it
was when
the famous
motor circuit
opened back in
1948. Goodwood is
a place where passion
pulls the generations
together.
And it’s not just the racing cars. In
summer, up on the Sussex Downs above
Goodwood House, the famous racecourse is
the setting for the biggest party on the sporting and social
calendar. As King Edward V11 once remarked, this is so much more than
horse racing, it is a garden party with racing tacked on. As true today as
it was a century ago.
Out of these unique sporting events has grown one of the most dynamic
businesses in the UK. Every year more than half a million people go
to Goodwood to have fun, to soak up the intoxicating atmosphere.
Increasingly, Goodwood is also a place to do business.
A place to ‘do business’ should, in theory, be so much more than just
another date in the office diary. It should also be an experience, a
pleasure even. And that is why Goodwood has become the number
one destination for those who want a little glamour and style with their
business.
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Why do so many companies, both
great and small, want to gather
in this beautiful place between
the South Downs and the
sea? They could, after all,
book into any old hotel
or conference centre
with its free pens,
pads and plates
of dry biscuits.
Above all else,
the attractions of
Goodwood are
its extraordinary
attention to
detail, the
unique range
of activities
and its
understanding
of what it takes
to provide
a service to
business people.
For more than
three centuries
the home of the
Dukes of Richmond
has been a place of
entertainment, one of
the great English country
estates. Known throughout
the world for its beautiful
racecourse, there is so much
more to the modern Goodwood
estate and its dynamic spread of
activities.
At the heart of the estate is Goodwood House,
with its magnificent collection of paintings and furniture,
all of which make this a most interesting and inspiring place. Many of
the world’s finest companies choose to meet at the House itself, using
the Regency ballroom for meetings or conferences while dining in the
mysterious Egyptian dining room. This is a unique experience and one of
the many reasons why Rolls Royce elected to build their new assembly
plant on the edge of the Goodwood estate.
But there is also the privately owned Goodwood Hotel, less than a mile
from the House, and recently renovated in the style to which Goodwood
clients have become accustomed. The hotel, originally the Richmond
Arms coaching inn, offers smart and functional conference rooms with
4-star accommodation as well as a health spa, indoor swimming pool and
two restaurants serving organic food from the Goodwood farm.
This is by no means all that awaits the
business visitor who chooses Goodwood for a
management seminar, a team-building session
or a sales conference. Under the energetic
leadership of the Earl of March, son of the
present Duke of Richmond, the Goodwood
group of companies has been transformed into
a thriving 21st century international business.
The portfolio comprises horse racing, motor
racing, a private aerodrome with its own flying
school, two spectacular golf courses in the
parklands and rolling hills around Goodwood
House, private track events at the motor racing
circuit and organic food sales.
What sets Goodwood apart from any other
business destination is its unswerving
commitment to service and its attention to the
needs of its most demanding customers. The
complete Goodwood ‘experience’ is delivered
by its own team of business managers, chefs
and event co-ordinators. Nothing is outsourced,
nothing is left to chance. Goodwood is not
simply another destination, it is a whole
new way of doing business that inspires and
energises each and every client.
Away from the great House, and the hotel,
are the internationally famous sporting
events where the hospitality, and the fun, is
as important as the business itself. A day at
the races, a trackside tent at the Festival of
Speed, a private day on the circuit, a relaxing
round of golf followed by delicious dinner in
the Egyptian dining room or an early morning
shoot on the Sussex Downs – this is what
Goodwood is all about. Old fashioned service,
perfected over the centuries, and brought right
up to date for the most discerning of global
business people. To believe it, be a part of it.
11
The
‘
Me Generation’ ?
At the age of just 25 Michael Amherst,
an Oxford graduate and author from
Tewkesbury, decided to use the money
inherited from his father to found a
charity that would support education
in the developing world. Now into its
second year and about to embark on
a second ambitious funding project,
Avonbrook Projects Abroad is going
from strength to strength. Michael and
Avonbrook Chairman, David Maddock
talk about their motivation, the charity’s
journey so far and how Avonbrook
Projects Abroad aims to make a real and
lasting difference.
project and I was delighted to be involved.
One of Michael’s key concerns was to ensure
that financial contributions from the charity
would have a lasting and meaningful impact
and part of our challenge as trustees was
to balance that objective against a realistic
assessment of the projects that the charity
could afford to undertake. We all felt that if
Avonbrook worked through and alongside
existing charities and local partners we would
be able to make the best use of the charity’s
funds and our own energies.
MICHAEL: One of the key reasons for setting
up a new charity was that rather than giving
the money and having done with it I wanted
to be sure that it would make a real and lasting
difference. It occurred to me that through
MICHAEL: I founded Avonbrook Projects
Abroad in 2007, following the closure of The
Abbey School, Tewkesbury. My father, Miles
Amherst, had founded the school in 1973,
one of the only new choral foundations of
the last century, and the site had been put in
Trust for members of the family in the event
that the school closed. At its peak the school
provided education for over 120 children,
including a great number whose places were
part-funded by bursaries by my father. Sadly, a
downturn in pupil numbers led to the school’s
closure in 2006. This was never money that I
expected to receive and following the securing
of the choir’s future, with a transfer to Dean
Close School in Cheltenham, I decided to do
something that would preserve my father’s
legacy in education. I had long been impressed
by the work of two of my former teachers,
Rosemary and Peter Diamond, in supporting
schools in the developing world and that
seemed to dovetail rather nicely with my other
aim – so the idea of Avonbrook Projects Abroad
was born! The name originates from Avonbrook
House, the main school building that housed
The Abbey School from 1973-2006.
I then spoke to David Maddock, my solicitor,
and was encouraged that far from dismissing
the idea as crazy he seemed very taken with
it. A small, informal band of Trustees already
appeared to be forming – myself, David,
Rosemary and Peter – and in February 2007
the four of us met at Strada in Cheltenham
to hammer out what we might do and how
it would work. David was elected as our
Chairman.
DAVID: Michael’s decision to establish the
charity was characteristically generous. He was
very enthusiastic about the possibilities of the
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partnerships with existing organisations we
could make grants to tackle specific problems
and continue the funding long-term. That way
we could actually see how our money was
making a difference and by maintaining a link
assist with any problems as and when they
arose rather than cutting and running once we
felt we’d done our bit.
As our work will be carried out by partner
organisations and we have no staff our
running costs are minimal to non-existent. All
of the charity’s start-up costs, such as printed
materials and the creation of the charity
website, have been covered by matching
donations.
DAVID: We formally launched the charity in
October last year with an event at the House of
Lords, kindly hosted by our patrons Baroness
Neuberger and Baroness Thomas of Winchester.
In terms of our respective ages, experiences
and professional backgrounds the make up of
the board of trustees is diverse and the charity
benefits enormously from the breadth that this
brings to our discussions about the function of
the charity and the assessment of applications
for grants.
at the project came to speak at the launch of
the charity at the House of Lords. It was very
rewarding to learn what a significant difference
our donations had made to the school and to
the lives of the school children.
MICHAEL: Moving forward, we expect to
MICHAEL: We were granted charitable status
in July 2007 and since then have provided
funding for the salaries of two teachers for four
years and for an extension to the pre-school
facility at a children’s home in Madagascar.
Akany Avoko was established in 1963 and
is home to over 120 abandoned, orphaned,
abused, impoverished or troubled children
aged between six months and 21 years old.
Centres such as this providing residential care
and education for destitute
children are exceedingly
rare in Madagascar. Almost
none of the children arriving
at the centre have received
any form of education or
participated in any form of
educational play, the funding
that Avonbrook has provided
means that the children no
longer have to be cramped
in one classroom or taught in
the living room.
Avonbrook continues
to evolve as a charity,
in December 2008 we
narrowed our focus to two
specific areas: improving
the standard of teaching
in the developing world,
through the recruitment,
training and retention of professional teachers;
and improving vocational and post-school
education and training to increase opportunities
for children in the real economy and world of
work. Both of these are often overlooked as
they lack the visible signs of progress achieved
by building projects and both fall outside of
the UN’s Millennium Development goals,
which place a premium on enrolment, without
tackling the issue of who will teach these
children or what they will do beyond primary
education.
DAVID: The project in Madagascar has been
fascinating and has vindicated our targeted
approach to making grants: The school is an
existing educational project with an excellent
and proven track record which means that as
trustees we can be confident that our donation
will have an immediate and long lasting
impact in that community. One of the teachers
make grants to around two projects a year.
These will either be sourced by ourselves
and matched to a partner organisation, or
will be a project that has been selected by
an organisation as suitable for a grant from
Avonbrook. We are always interested in hearing
from people who would like to work with us
and are, of course, immensely grateful for any
donations. Demand always outstrips supply!
blow it on perhaps the more obvious choice
of fast cars, property and partying. The
article suggested that a new generation is
developing – one with a social conscience
and a new sense of philanthropy. For
Michael it’s simple, he liked the idea that
the sale of his father’s school could spawn
a new generation of schools around the
world. Michael should be very proud
indeed of what his generosity has already
achieved and will continue to achieve in the
future.
Avonbrook Projects Abroad has launched a
new website. Please visit
www.avonbrook.org.uk
DAVID: The Times newspaper interviewed
Michael at the end of 2008 – the journalist was
captured by the fact that at 25 Michael had
decided to invest thousands of pounds of his
inheritance money in a charity rather than
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52-54 Gracechurch Street, London, EC3V 0EH
WEALTH MANAGEMENT
The Personal
Wealth Management Service
As a Senior Partner of the St. James’s Place Partnership, I offer a personal
bespoke wealth management service.
I provide face-to-face advice and specialise in meeting the financial needs of
people who have successfully created capital, or who earn higher incomes, and
whose circumstances and requirements can be more complicated than usual.
Whether a simple issue, or a complex multi-faceted problem, I provide wealth
management on an individual basis, bespoke to your personal needs.
The need for advice
Change affects us all, our circumstances, our family relationships and our
personal concerns. It affects the stock markets, interest rates, and the economic
outlook, manifesting into new forms of taxation and legislation.
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PARTNERS IN MANAGING YOUR WEALTH
“Every financial crisis
and bear market in the
past has been a buying
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Greenwood Great House
The Jamaica Experience
By Linda Hudson
Greenwood Great House was built during an era of elegance and brutality.
Now renowned as an antiques museum, it has continued to capture the
imagination of its visitors with its authentic collection. Greenwood has
the largest collection of musical instruments on the island. The house once
belonged to the Barretts of Wimpole Street London. Fodor’s Caribbean
Ports of Cass (7th ed.) describes Greenwood Great House as best “at
evoking life on sugar plantation.”
Golden Eye
Ian Fleming wrote the James Bond novels in his house in Jamaica’s
Goldeneye. It was transformed in 1992 by entertainment entrepreneur
Chris Blackwell into an elegant and luxurious resort.
Strawberry Hill
50-acre mountain top, Strawberry Hill is a mystical retreat that boasts
sweeping views of the majestic Blue Mountains and the Caribbean Sea,
sooths all senses with dramatic sunsets, panoramic views, and occasional
Reggae rhythms.
Located 3,100 feet above the Caribbean Sea in Jamaica’s picturesque Blue
Mountain range, SH features 12 beautifully designed Georgian cottages.
Nature walks, sharing knowledge in coffee growing, birdwatching,
tropical flora and fauna, world famous Aveda spa, SH is the perfect
escape. Great Houses
The great house of Rose Hall, Montego Bay, Jamaica
Overlooking the Caribbean sea, on the hills of the former Rose Hall Sugar Estate, approximately 10km, from Montego Bay, St. James is the imposing Rose
Hall Great House. With the many stories about its former owner, Annie Palmer and the cruelty she meted out to her slaves, Rose Hall Great House is a
very popular visitor attraction.
In the 1700s Annie Palmer moved to Jamaica as the wife of John Palmer, the owner of Rose Hall. She is thought to have murdered her husband and
enjoyed torturing her slaves. After the death of her husband, Annie took up voodoo and became known as the “White Witch of Jamaica” with a reputation
for ruthlessness and magic powers. Eventually though, Annie met her match and was murdered by one of her slaves who practiced voodoo.
The spirit of Annie Palmer, the White Witch, and other spirits - presumably her victims, are thought to haunt Rose Hall. According to stories, she can
still be seen at night riding Rose Hall and Ironshire estates on a large black horse, wearing a velvet green dress. Her footsteps can be heard in the main
hall of the Great House and whispers have been heard in the dungeon. Lights are turned on and off and babies can be heard crying.
The Rose Hall Great House was left in ruins for many years. It was then purchased by a developer who converted it into a museum. Since it re-opened
a number of visitors have reported strange phenomena such as images appearing in their developed photographs.
Firefly - Noel Coward’s home
Firefly is the home of the late Sir Noel Coward, which was given to the
people of Jamaica by Graham Payne. Located outside Port Maria, it is
administered on behalf of the Jamaican National Heritage Trust by Island
Outpost.
Caribtours (0207 751 0660: www.caribtours.co.uk) offers 7 nights at
Strawberry Hill, Jamaica from £1,535 per person, saving £206, staying
in One Bedroom Suite on a room only basis during Easter 2009. Price
includes return flights with British Airways and Private Transfers
The resort is nestled on a seaside bluff, surrounded by forest. Fleming
loved the outdoors indoors feel of the property, being surrounded by the
sounds and colours of nature, blazing sunshine, and the lifestyle which
came with living by the sea. He always faced the wall when he was
writing though, so views from the property wouldn’t distract him from
his 2,000 words a day. www.goldeneyehotel.com
Rafting on the Rio Grande
Over the years, rafting on the Rio Grande River has been a major
attraction for locals and visitors to Portland
The experience provides patrons with a glimpse of what the parish
has to offer in terms of natural beauty and allows them to enjoy the
exquisiteness of the one of a kind attraction.
Rafting on the Rio Grande dates as far back as 1911, when banana
farmers in the Rio Grande Valley developed the practise as a means of
transporting their bananas to the town of St. Margaret’s Bay where the
river ends, and from there it could be easily taken to the Boundbrook
Wharf in Port Antonio for export.
However, several stories have been told of people rafting on the Rio
Grande for the sheer pleasure of the experience.
One such story tells of a visitor to the Rio Grande Valley who decided
to take the trip to St. Margaret’s Bay on one of the rafts transporting
bananas, after being lost and unable to find his way to Port Antonio.
As the story goes, the visitor found the experience to be a thoroughly
enjoyable one and worked extensively to influence other persons to
follow his lead and take the trip.
Assuming that the tale is true, that effort has borne fruit significantly
since that time, because over the years, rafting on the Rio Grande has
become not only a major attraction for the parish of Portland, but also
one of the major pillars on which Jamaica is marketed as a tourist
destination.
www.visitjamaica.com or contact [email protected]
Nearly a thousand years ago the site was declared a sacred burial ground
by the Taino indians, the original inhabitants of Jamaica. Several centuries
later the property was associated with the pirate Captain Henry Morgan
(later Governor of Jamaica) who placed a lookout and dug a secret escape
tunnel to Port Maria.
In 1948 Sir Noel bought the property from the Lindo family and built his
house here. During the 50’s and 60’s Firefly became the winter retreat for
his friends and admirers such as Errol Flynn, Sean Connery, Laurence
Olivier, Elizabeth Taylor and Queen Elizabeth II.
16
17
Diary of Social Events
May - December 2009
MAY
(May 7-10) (May 1) (May 2) (May 7-9) (May 13-17) (May 15) (May 16-17) (May 9-23) (May 21-Aug 30) (May 19-23) (May 22-June 6) (May 21-24) (May 21-May 31) (May 24) (May 25 – June 27)
(May 27-May 30) (May 29-May 31) JUNE
(June 5) (June 3-July 5) (June 3-July 14) (June 4-6) (June 11-13) (June 11-14) (June 5-6) (June 27-28) (June 8-14) (June 8-Aug 16) (June 11-17) (June 19-21) (June 19-21) (June 19-15) (June 12-28) (June 27) (June –See web) (June – See web) (June 16-20) (June 25-28) (June 23-July 6) JULY
(July 1-5) (July 2) (July 3-5) (July 7-10) (July 3-5) (July 3 - 18) (see website) (July 7-12) (July 8-12) (July 10-28) (July 8-10) (July 22) (July 16-19) (July 16) (July 17-Sept 12) 18
Badminton Horse Trials, Gloucestershire. Box Office - Tel: + 44 (0) 1454 218375
Email: [email protected] www.badminton-horse.co.uk
Royal Caledonian Ball, Grosvenor House Hotel, London. Contact: 07506 650 181; www.royalcaledonianball.com
2000 Guineas, Newmarket, Suffolk. Contact: 01638 67 55 00; www.newmarketracecourses.co.uk
May Festival Chester Races, Cheshire. Contact: 01244 30 46 00; www.chester-races.com
Royal Windsor Horse Show, Berkshire. Contact: 0871 230 5568; www.rwhs.co.uk
Lincolns Inn Circuit Judges’ Dinner, London. Contact: 020 7405 1393
Chatsworth Horse Trials, Derbyshire. Contact: 01246 56 53 00; www.chatsworth.org
Newbury International Spring Festival, Berkshire. Primarily classical music from top performers.
Contact: 01635 52 87 66; www.newburyspringfestival.org.uk
Glyndebourne Opera Festival, East Sussex. Contact: 01273 81 38 13; www.glyndebourne.com
Chelsea Flower Show, Royal Hospital, Chelsea, London. RHS member bookings: 0844 209 1797;
non-member bookings: 0844 209 0362; www.rhs.org.uk
Bath International Music Festival, Avon. Contact: 01225 46 33 62; www.bathfestivals.org.uk
PGA Championship, Wentworth, Surrey. Contact: 01344 84 04 00; www.europeantour.com
Hay Festival. Ten-day festival in the Welsh border town of Hay-on-Wye featuring renowned international authors. Contact: 0870 990 1299; www.hayfestival.com
Blair Athol Highland Gathering, Perthshire. Contact: 01796 481 207; www.blair-castle.co.uk
Summer Shakespeare Season opens in London. Contact: 08443 753 460; www.openairtheatre.org
Royal Bath And West of England Show, Somerset. Contact: 01749 82 2222; www.bathandwest.co.uk
Holker Garden Festival, Cumbria. Contact: 01539 55 83 28; www.holker-hall.co.uk
The Oaks, Epsom Downs Racecourse, Surrey. Contact: 01372 72 63 11; www.epsomderby.co.uk
Garsington Opera Season, Oxford. Contact: 01865 36 16 36; www.garsingtonopera.org
Grange Park Opera Festival, Hampshire. Contact: 01962 737366; www.grangeparkopera.co.uk
Royal Cornwall Show, Wadebridge, Cornwall. Contact: 01208 812183; www.royalcornwall.co.uk
South Of England Show, Sussex. Contact: 01444 892700; www.seas.org.uk
Bramham International Horse Trials, Yorkshire. Contact: 01937 84 6005; www.bramham-horse.co.uk
The Epsom Derby, Epsom Downs Racecourse, Surrey. Contact: 01372 72 63 11; www.epsomderby.co.uk
Biggin Hill International Air Fair, Kent. Contact: 01959 57 22 77; www.airdisplaysint.co.uk
AEGON Championships, Queen’s Club, London. Contact: 08712 31 08 29; www.stellaartoistennis.com
The Royal Academy Summer Exhibition, Burlington House, London. Contact: 08708 48 84 84; www.royalacademy.org.uk
Grosvenor House Art and Antique Fair, London. Contact 0 20 7399 8100 Email: [email protected]; www.grosvenorfair.co.uk
Formula One British Grand Prix, Silverstone, Northamptonshire. Contact: 08704 588260; www.silverstone.co.uk
East Of England Show, Cambridgeshire. Contact: 01733 234451; www.eastofengland.org.uk
Three Counties Show, Malvern, Worcestershire. Contact: 01684 584900; tickets: 01684 584924; www.threecounties.co.uk
Aldeburgh Festival Of Music And The Arts, Suffolk. Contact: 01728 68 7110; www.aldeburgh.co.uk
Eton And Harrow Cricket Match, Lords, London. Contact: 020 7432 10 00; www.lords.org
Queen Elizabeth II’s official birthday, Trooping Of The Colour, Horse Guards Parade. Contact: 02079 30 48 32; www.royal.gov.uk
The Queen’s Cup Final, The Guards Polo Club, Windsor Great Park, Berkshire. Contact: 01784 43 42 12; www.guardspoloclub.com
Royal Ascot, Berkshire. Contact: 08707 27 12 34; www.ascot.co.uk
Royal Highland Show, Edinburgh. Contact: 01313 35 62 00; www.royalhighlandshow.org.uk
Wimbledon Tennis Championships, London. Contact: 02089 44 10 66; www.wimbledon.org
Henley Royal Regatta, Oxfordshire. Contact: 01491 572153; www.hrr.co.uk
Lincolns Inn Garden Party, London Contact: 020 7405 1393
Goodwood Festival Of Speed, Goodwood Park, Sussex. Contact: 01243 75 50 55; www.goodwood.co.uk
Royal Agricultural Show,, Warwickshire. Contact: 02476 696969; www.royalshow.org.uk
Game Conservancy Scottish Fair, Perth, Scotland. Contact: 01828 650639; www.scottishfair.com
Cheltenham International Festival Of Music, Gloucestershire. Contact: 01242 227979; www.cheltenhamfestivals.co.uk
Wimbledon Finals, London. Contact: 02089 712473; www.wimbledon.com
RHS Hampton Court Palace International Flower Show, Surrey. Contact: 08709 063791 ; www.rhs.org.uk
Henley Festival Of Music And Arts, Oxfordshire. Contact: 01491 843400; box office: 01491 843404; www.henley-festival.co.uk
Buxton Opera and Music Festival, Derbyshire. Contact: 01298 70395; www.buxtonfestival.co.uk
July Festival meeting at Newmarket, Suffolk. Contact: 01638 675500; www.newmarketracecourses.co.uk
Peterborough Royal Fox Hound Show, Peterborough, Cambridgeshire. Contact: 01733 234451; www.eastofengland.org.uk
Open Golf Championship, Royal Liverpool. Contact: 01334 460000; www.opengolf.com
Middle Temple Garden Party, London 6.00pm Contact: 020 7427 4800
BBC Proms concert season opens, Royal Albert Hall, London. Contact: 02075 898212; www.royalalberthall.com
JULY (con’t)
(July 19) (July 20-23) (July 22-24) (July 22-26) (July 24-26) (July 25) (see website) (July 25) (see website) Veuve Clicquot Gold Cup British Open Polo Championship final at Cowdray Park, Midhurst, Sussex. Contact: 01730 813257;
www.cowdraypolo.co.uk
Royal Welsh Show, Powys, Wales. Contact: 01982 553683; www.rwas.co.uk
Salon Prive, The luxury supercar event & concours d’elegance, at The Hurlingham Club, London
Contact: 0808 100 2205 email: [email protected]
Longines Royal International Horse Show, Hickstead, Sussex. Contact: 01273 834315; www.hickstead.co.uk
The Country, Land And Business Association Game Fair, Harewood House, Yorkshire. Contact: 01256 389767; www.gamefair.co.uk
Gray’s Inn Ball, London Glitz & glamour in the walks. First ball since 1996.
Contact Katie Denton:020 7458 7994,[email protected]
Cartier International Polo Final, Guard’s Polo Club, Smith’s Lawn, Windsor Great Park, Surrey.
Contact: 01784 437797; www.guardspoloclub.co.uk
King George Day at Ascot, Berkshire. Contact: 08707 271234; www.ascot.co.uk
Glorious Goodwood, Goodwood Racecourse, Sussex. Contact: 01243 755000; www.goodwood.co.uk
AUGUST
(Aug 7-29) Edinburgh Military Tattoo, Scotland. Contact: 08707 555118; www.edintattoo.co.uk
(Aug 1-8) Cowes Week, Isle of Wight. Contact: 01983 295744; www.skandiacowesweek.co.uk
(31st July-2nd Aug) Lowther Horse Driving Trials and Country Fair, Cumbria. Contact: 01931 71 25 77; www.lowther.co.uk
(14 Aug-6 Sept) Edinburgh International Festival, Scotland. Contact: 01314 732000; www.eif.co.uk
(Aug 12)
The Glorious Twelfth, start of the grouse shooting season
(Aug 14)
Ballater Highland Games, Aberdeenshire, Scotland. Contact: 01339 755771; www.royal-deeside.org.uk
Scottish Championship, Thirlestane Castle Horse Trials, Berwickshire, Scotland www.thirlestane.org
(Aug 18-21)
Ebor Festival, Yorkshire. Contact: 01904 620911; www.yorkracecourse.co.uk
(Fri 4, Sat 5 & Sun) Chatsworth Country Fair, Derbyshire. Contact: 01246 565300; www.chatsworth.org
SEPTEMBER
(Sept 1) (Sept 3-6) (Sept 5) (Sept 10-13) (Sept 10-13)
(Sept 11-13) (Sept 12) (Sept 17-19) (Sept 23-27) (Sept 18-20)
(Sept 23-24) (Sept 27) Shooting season opens with the start of partridge season.
Contact: The British Association For Shooting And Conservation; 01244 573000; www.basc.org.uk
Land Rover Burghley Horse Trials, Lincolnshire. Contact: 01933 304744; www.burghley-horse.co.uk
Braemar Royal Highland Gathering, Aberdeenshire, Scotland. Contact: 01339 755377; www.braemargathering.org
St Leger Festival Meeting. Contact: 01302 304200; www.doncaster-racecourse.co.uk
Blenheim International Horse Trials, Woodstock, Oxfordshire. Contact: 01993 813335; www.blenheim-horse.co.uk
National Championship Horse Trials, Windsor Great Park, Berkshire. Contact: 08456 432116; www.horsedrivingtrials.co.uk
Last Night of the Proms, Royal Albert Hall, London. Contact: 02075 898212; www.bbc.co.uk/proms
Ayr Gold Cup Festival, Ayrshire, Scotland. Contact: 01292 264179; www.ayr-racecourse.co.uk
The New Chelsea Antiques Fair, London. Contact: 01825 744074; www.penman-fairs.co.uk
Goodwood Revival, Goodwood Motor Circuit, Sussex. Contact: 01243 755000; www.goodwood.co.uk
Glorious Finale, Perth Races, Scotland. Contact: 01738 551597; www.perth-races.co.uk
Festival of British Horse Racing, Berkshire. Contact: 08707 271234; www.ascot.co.uk
OCTOBER
(Oct 2-6) ArtLondon, Chelsea, London; Contact: 02072 599399; www.artlondon.net
(Oct 5) Prix de L’Arc de Triomphe, Longchamp, France. Contact: 0033 49 102 030; www.france-galop.com
(Oct 6-9, 12-14, 15-16,30) Tattersalls Yearling Sale, Newmarket, Suffolk. Contact: 01638 665931; www.tattersalls.com
(Oct 7 - 11) Horse Of The Year Show, NEC Birmingham. Contact: 02476 693088; www.hoys.co.uk
(Oct 9-18) The Cheltenham Festival Of Literature, Gloucestershire. Contact: 01242 227979; www.cheltenhamfestivals.co.uk
(Oct 17) Champions meeting, Newmarket, Suffolk. Contact: 01638 675500; www.newmarketracecourses.co.uk
(Oct 31) Trout fishing season ends in England
(Oct 31- Concourse in Regents Park. Nov 1 - Run) London to Brighton Veteran Car Run. Contact: 01327 856024; www.lbvcr.com
NOVEMBER
(Nov 7) (Nov 14) (Nov 16-22) (see website) (Nov 26 - 28) (Nov 29) (Nov 30) Tote Sport Handicap. Contact: 01302 304200; www.doncaster-racecourse.co.uk
Lord Mayor’s Show, London. Contact: 02073 321754; www.lordmayorshow.org
Olympia Fine Art And Antiques Winter Fair, London. Contact: 02073 708234; www.olympia-antiques.co.uk
Open Meeting, Cheltenham Racetrack, Gloucestershire. Contact: 01242 226226; www.cheltenham.co.uk
The Winter Festival, including the Hennessy Cognac Gold Cup, Newbury Racecourse, Berkshire. Contact: 01635 40015;
www.newbury-racecourse.co.uk
National Cat Club Show, Bracknell Leisure Centre, Berkshire. Contact: 01344 424418; www.nationalcatclub.co.uk
Salmon and trout fishing seasons end in Scotland
DECEMBER
(Dec 10) Social season closes in England, Scotland and Wales
(Dec 15) Salmon fishing season ends in England
(Dec 15) Lincolns Inn Adjourned Council and Christmas Dinner, London
(Dec 20-21) International Show Jumping Championships, Olympia, London. Contact: 01753 847900; www.olympiahorseshow.com
(contact for details) NSPCC Cinderella Ball, London. Contact: 02078 252500; www.nspcc.co.uk
(Dec 26-27) Stan James Christmas Festival (Boxing Day Meeting), Kempton Park Racecourse, Surrey.
Contact: 01932 782292; www.kempton.co.uk
19
Judicious Investment in
Croatia or Brazil with a trusted partner
Make a
Where would you look
for
decent returns on your money?
And what would you look for?
A new approach
4:Property has created a new, personal approach
to investment for sophisticated investors, allowing
our Investor Partners the chance to choose what
suits them best, investment or purchase. Which
opportunities appeal most depend upon the market
and, of course, the investors’ own preferences.
There are probably two main reasons for
investing in property, as a lifestyle choice
for your own use in a first or second
home, or as an asset-backed investment,
which, by exercising good judgement,
can give handsome returns. In these
challenging economic times, when cash
balances offer low interest rates, it is
worth looking to invest a proportion of
one’s assets in more active and profitable
markets, less impacted by the credit
crunch. As always, timing is important.
Like individuals, properties and property markets
are all different; to invest successfully the imperative
is to be clear what you want, and to make decisions
that deliver exactly that. What are you looking for?
A second home or strong profits? It’s
worth reflecting on that before
reading on.
Markets like Croatia
and
Brazil
offer
the opportunity to
invest for profit or
to buy a lifestyle
property, or both;
investing for profit
and using that to
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They offer beautiful houses
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potential for strong growth on your investment.
The Company offers joint venture investment
opportunities in which the investor and the operator
share the land enhancement or development profits
50/50. The investment is asset backed (by the value
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opportunity to buy finished units in the development,
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Active markets
In these turbulent economic times the experienced
and sophisticated investor looks to markets outside
the economic gloom of the more leveraged
developed economies to those markets with
an economic momentum driving their property
markets. For that reason, over the next 3-5 years
4:Property are focusing on Brazil, Romania and
Croatia as each has, for different reasons, a
strong and profitable property market.
investment are common, regularly in the 20% to
30% per annum range; an interesting comparison
to current UK bank interest rates.
So with John Humphreys continuing to remind
us all of the gloom here, why not consider what
proportion of one’s assets should be moved to
more dynamic profitable investments, giving higher
projected returns than foreseeable in the UK?
Astute investments
4:Property also offers tax-free (SIPPS eligible)
and income-generating investments to help you
grow your assets and your portfolio, as well as
Invest for Charity, your chance to share your
profits with charitable causes.
Whatever your investment plan, there isn’t
usually the time or space to do it all yourself. The
opportunity to benefit is here; would you like to
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To hear more, please call 0800 1601 004 or
email [email protected]
With our projects, returns that double original
• Activemarkets,withstronglong-termgrowth?
• Emergingmarkets,withastablepoliticalenvironment?
4:Propertyofferssophisticatedinvestorstheopportunitytoinvest
directlyinlandacquisitionanddevelopmentprojectsinCroatia,
RomaniaandBrazil,marketsstillenjoyinggrowth.Sharing
developers’profitsinashort-termjointventure,a4:Property
InvestorPartnerhasfirstcallontheassetsduringthelifeofthe
investmentandfirstcallontheprofitsatitsend.
Understandingthemarketsforinvestmentiskey.Our
networkofspecialistpropertypartnersprovidesspecific
countryknowledgeandintroductionstopurchasing
opportunities,projectmanagementandcontracting.
Weknowthatpeoplehavedifferentreasonsfor
investing.Whetheryou’relookingtosupport
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Ourcurrentprojectsinclude
land-bankingopportunitiesinRomania,
Many of our investment opportunities
centre on projects for local residents,
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4:Property has projects near
Dubrovnik, Split and Zadar in
Croatia, in Sergipe and
Alagoas in Brazil, and near
Constantsa, Targoviste
and
Odorheiu
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If you are simply looking
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all these countries offer profitable
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• Profitableinvestments?
apartmentdevelopmentsonthe
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4:Property - the contemporary
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dependentonbankfinance.
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Call us on
We’dbedelightedtodobusinesswithyou.
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Investwithusinactivepropertymarkets–
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Sailing with a Gulet in Croatia
By Tom Owen If sailing holidays are best taken in sunny seas dotted with islands
and secluded bays, then Croatia is one of the best places in the world.
The coast can get a little crowded in the middle of summer, but the
abundance of islands means that on a boat you can always escape to an
empty cove for a swim and a lazy lunch.
We chartered the Andjeo (angel), a beautiful 30-metre ketch based in
Split. She was originally built in Turkey and is similar to a gulet, but
slightly faster and trimmer around the waist. For those familiar with
more spartan sailing boats, this is an entirely different experience. With
five double cabins each equipped with its own bathroom, there’s no
shortage of room. And up on the teak deck, there’s plenty of space to
stroll around or hide away with a book. All maritime and culinary duties
are taken care of by a crew of three (the skipper Nika, a sailor and a chef).
We embarked in Trogir, a jewel-like fortress town close to Split (and
even closer to Split airport) on a sunny late-September day. You are, of
course, the one who decides the itinerary, but the skipper knows the
islands and coastline as well as anyone, and knows the best places. On
the first afternoon cruised for a couple of hours towards the tiny island
of Palmizana, arriving in the island’s small marina just as the sun passed
over the yardarm. The island nestles next to Hvar, one of the liveliest
of the southern Croatian islands, but
has a much more relaxed atmosphere
than its neighbor. It is mostly owned
by the Croatian-Venetian Meneghello
family, who recovered it from the state in
restitution after the fall of Yugoslavia. It
is now home to a small bohemian estate
and restaurant adorned with eccentric and
colourful local art works. Sitting on the
restaurant terrace amidst the pines at dusk,
serenaded by cicadas, with a plate of fresh
calamari and a jug of cold Dalmatian red,
contentment is not hard to find.
The next day we set off under sail for Vis,
one of the most easterly of the islands. With
the peak of Vis a hump on the horizon, we
settled down to read on the foredeck, an
excellent place to
get a suntan if needed. Occasionally the crew would charge around the
deck running up various sails and so on, and I realised for the first time
that sailing can be a spectator sport.
Vis is one of the more remote Dalmatian islands and during the Tito years
was a closed military base. As a result, there is relatively little tourist
development and what there is, as in so many places in the Croatian
islands, is true domestic hospitality. An example is the vineyard-konoba
of Oliver Roki, the legendary Anglo-Italian- Croatian restaurateur,
winemaker and cricketer. On the terrace of Konoba Roki, hidden away
in the island’s interior, we dined off Artichokes, potatoes and fresh fish
washed down with Roki’s knockabout red. We learned that Oliver is the
founder of the Vis cricket team, whose shirts are emblazoned “Remember
Nelson,” after the island’s role as a British naval base in the nineteenth
century. “What problems did you face in starting the team?” I asked. “It’s
a bit hard to find other teams to play, and there’s a not much flat ground
on Vis, but we get by,” he replied, displaying the sort of phlegm that
Nelson would undoubtedly have approved of.
On the edge of Vis harbor, hidden among the pine trees, is a tiny British
war cemetery. There are graves of sailors from the Napoleonic wars and
also of servicemen from the Second World War, when Tito, his Partisans
and their British allies used Vis as a base to harass the Germans on the
mainland.
Vis to an islet a way offshore, home of the famous blue cave. This sea
cave is entered through a tiny hole, yet inside instead of gloom the cave is
brilliantly lit by an otherworldly electric blue glow from the water itself.
The reason for this phenomenon is that the light gets in from outside
through various submerged openings, it seems.
From there we sailed most of the day to Korula. Before moving to the
greater safety of Vis, Tito and Fitzroy MacLean (his British liaison and
mooted model for James Bond) based themselves here. MacLean’s
description of his arrival by boat stand as well today as in 1943: ‘the
wooded hills of Korcula stood out black against the pale sky. As we
rounded the point and entered the harbour, the first rays of the rising sun
were beginning to fall on the old houses of the port.’. Korcula town looks
just like a little Dubrovnik, a walled medieval trading post, each house
topped with rough red tiles. The town was a Venetian colony, and the
Lion of St Mark, the Venetian symbol, sits above almost every doorway in
the town’s steep lanes and compact piazzas.
Korcula is serene and relaxing little time capsule, and indeed none of the
Croatian islands has very much in the way of carousal, so they make a
poor substitute for an 18-30 week in Faliraki (although the restaurants
are very decent). It seems, though,
that wartime Korcula offered a rather
more exuberant nightlife, as MacLean
recalls:
I have hazy memories of the dance at a
village called Blato which rounded off
our day’s entertainment and which was
dramatically interrupted by the explosion
of a small red Italian hand grenade which
became detached from one of the girl’s
belts as she whirled round the barn in
which it was being held. That night we
slept very soundly.
The British liaison officers also
amused themselves by swimming in
the straits towards the Peljesac peninsula, just a couple
of kilometres from Korcula town. The steady German progress along
the peninsula eventually threatened Korcula, which is why the Partisans
moved on to Vis, the most remote of the Croatian islands.
We, instead, headed south, stopping for a night on Sipan, part of the
Elafiti Archipelago, just off Dubrovnik. This is a very laid back island,
once famed as the favoured place for the Dubrovnik aristocracy to spend
the hot summer months. Sipanska Luka is wonderfully simple and
unspoiled - tying up alongside, we leaped ashore after dinner on the boat
and spent the night in a bar on the waterside with a mixture of rustic
types and fellow sailors from Poland and Spain. In Sipanska Luka, as
in much of Dalmatia, we can report that Blondie and David Bowie have
achieved remarkably durable popularity.
Our final port of call was Dubrovnik, the extraordinary walled city at the
southern tip of Croatia. After such idyllic days of swimming in coves and
dozing on deck, the ancient metropolis is quite a change. Still, there is no
use pretending that it is not a wrench to leave Andjeo, a place of ease,
pleasure and escape from the mundane, but at least you can come back.
Sasha King
Adriatic Holidays (ATOL 6232)
1, Victor Street, Oxford, OX2 6BT
Tel: +44 (0)1865516577 Fax: +44 (0)1865514266
www.adriaticholidays.co.uk
The following day we skirted the coast of
22
23
London Clubs - Bleasure is the
new buzz word in travel
By Shelley-Anne Claircourt
Staying with both business and pleasure
in mind; nowhere exemplifies this more
than London’s clubs. Membership brings
a sense of belonging to a comfortable
way of life, where members are really the
most important element and, in return
members sign up to the ethos of the club.
It is a lifestyle statement like no other.
There are a cluster of clubs in Pall Mall and St.
James’s, including the Royal Automobile Club,
the Travellers Club, White’s and the Carlton
Club. Each was established to indulge members
in their specific passion, be it motor cars,
travelling or politics. Others have ties to specific
occupations, such as officers in the Cavalry and
Guards Club who have their own establishment
on Piccadilly whilst farmers and landowners
can join the Farmers Club, overlooking the
Thames. Whilst the Caledonian Club, in
London’s Belgravia, insists upon strong Scottish
connections as a criterion for membership, you
no longer need to be in the Foreign & Diplomatic
Service to be a member of the Travellers Club.
What they all offer is a home from home in the
heart of the capital with en-suite accommodation
for a fraction of the price of the hotels and
invariably the rate includes a hearty English or
Scottish breakfast as well as early morning tea.
quality and personalized service. Provided that
the banqueting rooms are booked by a member
they can be used for discreet corporate events.
It used to be that the food in these establishments
had not improved much from nursery dishes of
yesteryear but, today, this could not be further
from the truth; with Michelin starred chefs
cooking at events at the Royal Automobile Club
on a regular basis and resident chefs frequently
nominated for awards. Clubs too, in the large,
have acquired incredible wine cellars through
buying wisely and laying down for future
generations. The Caledonian Club boasts an
extensive wine list at prices that Oddbins would
be challenged to match, if they were only able
to secure such prestigious labels. Likewise the
Travellers Club, where currently a Chateau
Batailley 2001 is available for just £35.00; it would
be three times the price in any local restaurant.
Indeed Clubs represent exceptional value for
money not only with their room rates but in their
restaurants and bars where prices are invariably
30% to 40% lower than in nearby competitive
hotels and restaurants.
It is a fallacy that you need to be over 70 to be
a member of these grand institutions, indeed
the average age of membership has plummeted
since most clubs have an “under 30” category
and, that particular age group has been used to
paying an annual subscription, albeit to a gym
and enjoys the quirkiness of club life; where they
can catch up with the Sunday newspapers prior
to traditional Sunday lunch.
For this reason the private dining and meeting
rooms are always popular; members already
know that they are getting the best value, highest
Clubs are no longer male bastions and most
now open their doors to both men and women;
although the 122-year old University Women’s
Club in Mayfair rather bucks the trend when it
comes to sexual equality and its stated aim is to
offer a “welcoming environment and pleasant
accommodation for graduate, professional and
business women”.
Clubs were first created to ensure members
could relax amongst compatible souls, as David
Broadhead, Secretary of the Travellers Club
explains: “Principally a club is formed of likeminded people. This is achieved because the
election procedure makes it happen i.e. at our
club a candidate is entered in the candidates’
book by a member of more than three years
standing as his proposer, the candidate must also
be seconded. Both the proposer and seconder
must write to the Secretary explaining the reasons
behind their proposed candidate and why he is
worthy of becoming a member. They must also
present a biographical notes form giving details
of education, work etc. The candidate must
attend a Chairman’s reception where he meets
other Club members and committee members
after which his details are presented at the
Election Committee. This procedure ensures
people of the same ilk and with similar interests
are brought together in an environment
conducive to those interests.”
mention squash courts and a gym, complete
with personal trainers. The Caledonian Club too
has a snooker room and organizes a number of
societies for members including bridge, golf and
many traditional sports.
Undoubtedly what clubs provide in abundance
is privacy and it is for that reason many of the
captains of industry, not to mention sporting
heroes choose to be members so that they can
stay, entertain and enjoy London away from the
media glare.
All clubs have reciprocal arrangements
with other clubs overseas. Members of the
Royal Automobile Club, for instance, have
access to more than 60 of them from Chile to
Japan including the prestigious Automobile
Club de France on the Place de la Concorde and
the Muthaiga Country Club in Nairobi, which
was the base of the notorious Happy Valley set
of White Mischief fame during the 1930’s and
1940’s.
“Essentially a club provides a haven, someone
once eluded it was like running a country
house hotel with a captive audience, I would go
one stage further and say it’s like
running a private house with an
extremely large family!” quipped
David Broadhead.
Further Information:
It is those interests that produces extensive
and creative events lists, with guest
speakers ranging from explorers such as
Ranulph Fiennes to imminent politicians
including William Hague, Boris Johnson,
Liam Fox and all speak openly, safe in the
knowledge that the Chatham House rules
applies. Undoubtedly clubs open doors that
are closed to the rest of the nation and visits
are arranged to gardens, such as Highgrove
as well as theatre, gallery and stately home
private tours.
www.caledonianclub.com
www.royalautomobileclub.co.uk
www.thetravellersclub.org.uk
Many clubs have their own gardens and
terraces to enjoy the increasingly warm
summers with alfresco dining. Whilst clubs
such as the Royal Automobile Club boast
health and fitness facilities that were originally
built in 1911 that would put many hotels today
to shame, including a 26 m swimming pool
and a Turkish bath comprising of five rooms
of varying degrees of heat and steam, not to
Situated in the heart of Belgravia, adjacent to Hyde Park Corner, The Caledonian Club epitomises total elegance and style. The original
grand architecture of this private members’ club is complemented by elegant interior design and modern facilities. Choose from eight
immaculately maintained function rooms for meetings, private dining, receptions, weddings and events.
During the summer months, the Terrace is an ideal setting for al-fresco entertaining and accommodation is
available with 39 bedrooms designed with luxury and comfort in mind.
Membership is not a pre-requisite for holding meetings at the Club and for more information,
simply contact the Banqueting Department on 020 7333 8722 or email [email protected]
THE CALEDONIAN CLUB
24
9 HALKIN STREET
BELGRAVIA
LONDON SW1X 7DR
WWW.CALEDONIANCLUB.COM
caledonian club.indd 1
13/11/2008 17:07:09
Handel House Museum: Handel’s Legacy 250th Anniversary Year
By Claire Barton
In 1759 George Frideric Handel died at his home at 25 Brook Street, Mayfair, the house in which he had lived for the previous 36 years and where he
had composed some of his most famous works – Messiah, Zadok the Priest and the Music for the Royal Fireworks. Handel’s biggest legacy to us is his
music – his operas, oratorios, concerti etc. – but during his lifetime and after his death he was a very generous and imaginative benefactor too.
He founded the Fund for the Support of Decay’d Musicians (now the Royal Society of Musicians) in 1738, having discovered the wife and children of
one of his former oboists begging outside the Haymarket Theatre. He left the Fund £1,000 in his will, which would be worth over £110,000 today.
He was also closely involved with Thomas Coram’s Foundling Hospital.
In 1749 he gave a concert to help finish the building works on the
Chapel. It included the first indoor performance of the Music for the
Royal Fireworks and an anthem written specially for the occasion
Blessed are they that considereth the poor and the needy, now known as
the Foundling Hospital Anthem. The concert was a great success – the
Prince and Princess of Wales attended – and it raised more than £350
(c.£40,000 today). He later donated an organ to the Hospital, which
he used for a special fundraising performance of Messiah – and from
that time onwards he performed the oratorio at the Hospital each year
until his sight failed him. Over ten years Handel generated an income
of £10,000 (£1million today) from these performances and in his Will
Handel bequeathed the Hospital a complete fair copy and parts of
Messiah, which allowed the annual fundraising concerts to continue.
Handel House Museum opened at 25 Brook Street in 2001, and during
the past eight years has welcomed over 120,000 visitors through it doors.
The museum celebrates Handel’s life and works, displaying portraits of
Handel and his contemporaries in finely restored Georgian interiors and
brings live music back to his house. The Museum runs a lively series of
events as part of its ongoing education programme, including family
events, study events, live music and special events.
Handel House Museum has worked with the major London music
schools: Royal College of Music, Royal Academy of Music, Guildhall
Schools of Music and Drama and Trinity Laban Conservatoire of Music
and Dance and has been able to offer students and young professionals
the opportunity to rehearse and perform in Handel’s own rehearsal and
performance room on period instruments, including our own harpsichord
and an original 18th century spinet. Last year over 200 promising
musicians benefited from this opportunity and we have received much
positive feedback from visitors, on how much their time in the museum
was enriched by hearing live music during their visit.
If you have clients who are making or changing their Wills, and have a
passion for music, opera and the performing arts, then please do consider
bringing Handel House to their attention. We would be delighted to
show a prospective legator around the Museum. In this anniversary year
of Handel’s death, we are renewing our legacy campaign and planning
events for all those who have pledged their support for Handel House in
their Wills.
For further information on leaving a legacy to Handel House Museum,
please contact Claire Barton on 020 7399 1964 or at
[email protected] © Dalton
Handel House Museum is an independent museum, which means that it
has to generate all of its own income to stay open, it receives no statutory
or government grants. Income comes from admission and event
ticket sales, the various Friends schemes, donations from Trusts and
Foundations and individuals, and legacies.
Baroness Warnock writes: ‘Many people give money to support their
favourite charities during their lifetime, but very few remember those
charities in their Will. For a small independent Museum, such as
Handel House, legacies are an absolutely vital form of support. I have
remembered Handel House in my Will and I would urge you to do the
same. By leaving a legacy to Handel House you will ensure that future
generations of visitors can enjoy the arias from Messiah and countless
beautiful operas in the very place where they were written. You will
also ensure that Handel House’s important education work with schools
and community groups and the ‘Thursday Live’ programme of concerts,
promoting the very best in young upcoming talent in baroque music,
will continue to thrive.’
This year, 2009, is the 250th anniversary of Handel’s death and Handel
House Museum is commemorating this with a number of special events,
exhibitions and concerts during the year. Full information can be found
on our website: www.handelhouse.org/handel2009
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26
Making best use of the tax concessions
applied to savings
There is a wide choice of tax efficient savings vehicles available for salting away hard earned
cash but two of these stand out as being universally popular – Pensions and Individual Savings
Accounts or ISAs. By Anne Gregory-Jones, Head of Tax, Haysmacintyre
For those willing to accept higher risks, Venture Capital Trusts are well
worth considering. This article looks at the tax treatment of these options
and suggests how they might best be used by barristers.
ISAs now pensions later
Firstly, the ISA which has now completely replaced PEPs and TESSAs
and is currently available in two forms – the cash ISA limited to
investments of £3,600 per tax year and the Stocks and Shares ISA with an
annual limit of £7,200.
The ISA must be funded from net of tax income or capital and offers
freedom from tax on any income or capital gains generated from the
underlying investments. The investments are open ended and may be
encashed at any time.
Pension plans were subjected to some major changes back in April 2006
when the old contribution limits – generally 17.5% of earnings up to
around £100,000 - were scrapped. The contribution limit now is 100%
of earnings subject to a maximum of £235,000 (£245,000 if this is to be
published after 5th April 2009) in the current tax year.
the same as a pension and the investment choices are broadly similar.
However, the fund can be accessed at any time. Let us say that over a
period of time investment returns are such that the fund doubles in value
(bear with me here – it has happened before). The ISA will be worth
£12,000 but the equivalent pension fund would be worth £20,000.
However, the ISA could be encashed and the proceeds used to fund a net
pension contribution. Assuming the gross amount is within the band of
income to be taxed at 40% the £12,000 would become a pension fund of
£20,000 – the same figure as if the investment had been in a pension all
the time. But, if needed, the ISA fund would have been accessible at any
time.
With tax rates increasing – a top marginal rate of 60% from April 2010 on
income just over £100,000 or just over £140,000 and then 45% on income
above £150,000 from April 2011 – it makes even more sense to do ISAs
now and pensions later.
Pensions are more tax efficient than ISAs for the following reasons:
•
•
•
Investment is made from gross income benefiting from tax
relief at the highest marginal rate
The fund is taxed in the same way as an ISA
25% of the fund can be taken as a tax free lump sum at any
time after age 50 (55 from 6th April 2010)
However, pension funds cannot be accessed until age 50 or 55.
The change to the contribution limit suggests a different approach to the
use of these two types of investment during a barrister’s lifetime financial
and tax planning. The conventional wisdom was that younger barristers
should start pension saving as early as possible because of the restrictions
on contribution levels and the power of compound interest. Now,
however, because of the higher contribution levels there is less pressure
to commence pension contributions early.
In one’s 20s and 30s priorities are likely to be house purchase, school fees,
etc and retirement becomes a priority later. For the above reasons, there is
sense in maximising ISA contributions early in one’s working career and
concentrating on pensions later. The points are that:
•
•
•
•
•
If required, ISA investments are accessible at any time; pensions
only after age 50/55
Barristers are likely to be paying much higher rates of tax later
in their careers
Tax rates are increasing
Pension contribution limits are very high
ISA portfolios can be transferred into pensions at a later date
Let us take for example an investment of £6,000 from net income. If
this goes into an ISA, the gross investment is still £6,000 but if the
same investment is made into a pension by a 40% taxpayer, the gross
investment is £10,000.
But if the investor opts for the ISA, the tax treatment in the fund is
28
In summary, maximise your ISA allowances before investing in pensions,
with a view to switching your ISA portfolio to pensions in your early 50s.
Combining VCTs and pensions
VCTs are Investment Trusts quoted on the
London Stock Exchange investing in small
to medium-sized qualifying companies. To
qualify a company must be unquoted or
AIM listed and carrying on a trade in the UK
which is not, in broad terms, a financial or
professional activity.
The tax benefits of VCT investment can be
summarised as follows:
•
•
•
Income tax relief at 30% on
investments of up to £200,000 in any
tax year. The relief is available for
the current tax year irrespective of
the investor’s top tax rate. Thus a
20% taxpayer can benefit from 30%
relief. The shares must be held for
a minimum of 5 years to maintain
qualification for this relief.
Tax free dividends
Tax free capital gains on the
investment itself provided the shares
are held for at least five years.
If investment is made in a VCT for 5 years, the
fund can then be encashed and transferred as
a net contribution to a pension. In this way,
the original net investment can be more than
doubled. In some cases it may be possible
to transfer the VCT to a SIPP (self invested
pension plan) as an “in specie” contribution.
An illustration is given below based on a net
investment of £100,000.
Summary
It will be seen that the tax reliefs available for
different types of investment can be pulled
together to enhance returns and fit with your
changing needs.
Anne Gregory-Jones, haysmacintyre
Head of Tax
Escape the
rat race
“Twenty years from now you will be
more disappointed by the things that
you didn’t do than by the ones you do do.
So throw off the bowlines, sail away from the
safe harbour. Catch the trade
winds in your sails.
” Mark Twain
Explore. Dream. Discover.
If you’ve ever dreamed of spending your holiday relaxing on
a luxury yacht in a secluded bay, but thought that this was a
pastime only for the super rich, then think again. There are
many opportunities to get out on the water and experience
sailing either at home in the UK or abroad. And whether you
are looking for a relaxing getaway or an adrenaline filled
experience you’ll never forget, sailing has it all!
Caribbean sailing
If a slow pace of life is what you’re looking for then sailing Caribbean
style could be just for you! An average day involves finding a secluded
bay for lunch, going for a swim in the azure blue waters, then setting sail
to explore, with perhaps a spot of fishing before dropping anchor for a
barbeque on the beach.
The Caribbean is a sailor’s paradise and despite its popularity with
tourists, there remain areas of unspoilt beauty- many of which can only
be reached by boat. Choose from a variety of tropical locations including
St Lucia, St Vincent and the Grenadines, Martinique, the British Virgin
Islands and Antigua. Where you visit is up to you, with a professional
skipper to take you to the best locations on offer.
If its variety you’re looking for then combine your time onboard with a
few days ashore to discover what these sensational islands have to offer.
From historic landmarks, to thriving markets, amazing wildlife and
breathtaking beaches, the Caribbean has it all.
For those looking for a bit more adventure, then the Caribbean offers a
wealth of opportunities for yacht racing. (put in a text box?)
St Maarten Heineken Cup
The ethos of the St Maarten Heineken Cup regatta is ‘serious fun’
which is probably why it has been at the forefront of Caribbean sailing
events since it began. Not only does it offer fantastic sailing, but the
entertainment onshore both during and after the racing is second to none.
BVI Spring Regatta
The week long sailing spectacle takes in everything the British Virgin
Islands have to offer starting at Nanny Cay, racing up the Sir Frances
Drake channel to the infamous Bitter End Yacht Club. The warm and
steady trade winds provide fantastic sailing conditions and the idyllic
sandy beaches allow for the perfect way to unwind after a great day’s
racing.
Bequia Easter regatta
The tiny island of Bequia is part of the Caribbean islands of St Vincent
and the Grenadines, and each year hosts this hugely popular regatta.
Since it began 26 years ago the event has grown into of the region’s most
popular small island regattas. As well as taking part in the racing, you
can enjoy watching the
action unfold from one of the island’s many breathtaking beaches.
Antigua Race week
One of the premier sailing regattas in the world, this prestigious event
30
continues to attract world class yachts and yachtsmen to race in the
beautiful waters of Antigua. The culmination of the Caribbean racing
calendar, its an event not to be missed.
Learn to sail
Closer to home, opportunities to get out on the water are just as inviting,
with one of the best sailing areas in the world right on our doorstep, on
the South Coast. Whether your dream is to take the family and sail off
round the world, or simply charter a yacht with friends and family in the
Mediterranean or Caribbean, then a sailing course is the perfect way to
get started. But be warned- most people who take to the water get bitten
by the sailing bug and quickly become lifelong yachties!
From the start yachting course through to the yachtmaster qualification,
hundreds of sailors take to the beautiful waters of the Solent every year to
learn the ropes. With its vast array of navigational marks, shipping lanes
and tidal range there is no better place in the world to learn. Courses are
run over 5 days or a series of weekends throughout the year. The very
least you can expect is a spacious and comfortable yacht, great food, even
better company and an awful lot of fun. If you’ve never stepped on a boat
before then don’t worry- no previous knowledge is necessary. All that is
needed is a spirit of adventure and a sense of humour!
Adventure cruising
If you have a taste for adventure then why not take a long weekend to
sail across the English Channel to Cherbourg or St Vaast on the famous
Brittany coast. Yachts leave the Solent on a Friday evening to arrive in
time to peruse the Saturday markets before enjoying the best of French
food and wine. Always a popular choice, these weekends are a firm
favourite with those who are new to sailing or those who simply want to
get out on the water for a great blast!
UK Yacht Racing
For adrenaline junkies yacht racing in the UK is difficult to beat. With its
stunning coastlines and challenging sailing conditions, yachtsmen come
from around the world to compete in these waters.
The Round the Island Race in June is one of the largest and most famous
yacht races in the world, allowing novice sailors to race alongside
professionals in the 50 mile course around the beautiful Isle of Wight.
Join as crew on a racing yacht and experience the drama for yourself first
hand. If this doesn’t make you into a salty sailor then nothing will!
If that’s too tame then how about The Rolex Fastnet race. One of the
world’s classic offshore yacht races, the 600 mile course tests the mental
and physical abilities of skippers and crew to the limit. As part of the
crew for this historic sailing challenge you will compete in 3 qualifying
races before taking to the start line for the Fastnet in August 2009.
In2sail Ltd
Tel: 01983 615 557 Mob: 07789 265026
www.in2sail.com [email protected]
31
Living off capital: understanding drawdown
Like all self-employed people, barristers cannot duck choices about how they finance their
spending when they stop earning, There is no shortage of technical explanations about how
pensions work. They are tedious but rules-based so barristers should have little trouble mastering
that aspect of the brief quickly. This is not enough.
By Stuart Fowler, institutional investment manager, founder, No Monkey Business Ltd.
Retirement spending usually involves more sources of
capital than just pensions and financial goals cover more
than retirement spending. Now the choices look like part of
a broad approach to good financial management, involving
more complex dependencies and requiring better advice.
This aspect of the brief is harder to master. Mistakes can
be costly, with time to regret them but not enough time to
correct them.
They are avoided by advisers and their clients applying a few powerful
generic insights which are based on essential principles. This is what we
seek to provide in this article.
Bath time
The process is divided into two sequential phases: accumulation and
drawdown. Viewed as a bath, accumulation is about filling it and
drawdown is about emptying it. As long as there is some water in the
bath, its volume is subject to a capital-market process of expansion and
contraction, as a function of any trend rate of return (expansion) and
volatility (expanding faster or even contracting). The return and risk
characteristics of a portfolio (describing a particular stock of water)
depend on the sort of assets it holds and how they are put together.
Whilst the bath is filling up, the effect of volatility will be cushioned by
these new inputs. Whilst drawing down, the speed with which the capital
stock is exhausted depends on the rate of draw and the particular path
taken by the portfolio value.
The returns we are interested in are called ‘total return’ and include both
change in capital value and any dividend or interest. Cumulative returns
are calculated assuming this income is reinvested as received. Markets
trade off yields and growth potential on a presumption of a common
required rate of return. It follows that consuming income is in any
circumstances (including distributions from trusts) a form of drawdown
from capital.
From their mastery of the rules governing personal pensions, barristers
will see that, to the extent the plan assets include pension accounts, these
now constrain the level of inputs, the stock (in the form of a ‘lifetime
allowance’), the rate of draw and the benefit of generation-skipping
bequests.
A further set of constraints that particularise these general principles
covers unique personal welfare preferences. These include
• stability of the rate of draw (adjusted for inflation), as in being able to
sustain spending through a series of bad years for portfolio values
(think of Japan, for instance)
• control, as in a preference for drawing down rather than buying an
annuity to provide the income stream
• time preferences, such as valuing high payoffs from investment bets
less the later they emerge.
Balance
For a plan to have technical integrity, its defined parameters must be
quantified and the values must be internally consistent. The parameters
are: the resources applied, the target outcomes, the time horizons (if
drawing down, these are a sequence of dates not a single date) and
the amount of risk accepted or sought. This inconvenient truth flows
from the same theoretical source as the tenet ‘there is no such thing as
a free lunch’. For instance, taking more risk increases the uncertainty of
outcome so achieving a given minimum acceptable outcome at the same
level of confidence must call for additional resources.
Risk management
The entire process is subject to several sources of uncertainty that need to
be allowed for when planning but also call to be managed somehow. The
management techniques can be one of three: avoiding a risk, insuring (or
hedging it) and embracing it but also trying to control it.
Plan outcomes can be defined in terms of the rate of drawdown in real
pounds, or directly in terms of the after-tax spending it supports.
As financial management tasks go, living off capital subject to constraints
is one of the toughest and is mostly performed with hopelessly
inadequate technical resources. Mistakes made in less complex situations,
such as Equitable Life and endowment mortgages, have been the source
of widespread regret and recrimination. In this case there is even less
scope for recompense.
Constraints
The three risk sources are inflation, longevity and investment.
How the entire process is planned and managed depends on the
constraints imposed on the process. If these are not specified correctly, the
plan will not be managed efficiently.
The first key constraint is that the target outcomes need to be expressed
in real terms, whatever the actual rate and profile of inflation over the life
of the plan. Unless outcomes have comparable purchasing power, they
are as meaningless as if expressed in Turkish lire. Even the illustrative
growth rates for pension products prescribed by the FSA fall into this
trap.
The second is that the bath must not run out before it has achieved its
minimum objectives. This constraint needs to bite hardest if all spending
depends on the plan assets alone.
32
Inflation risk
“Inflation is as violent as a mugger, as frightening as an armed robber
and as deadly as a hitman”, said Ronald Reagan in 1978. Inflation risk
is also very well disguised and difficult to model. No Monkey Business
avoids this problem by estimating the return and risk of asset classes in
real terms, based on all available histories of real total return for equity
markets around the world.
This approach has a striking impact on fixed income investing. It precludes
it. This is because it is inflation’s most frequent and most damaged victim.
This can be observed from histories of real total return for bonds over long
holding periods. It happens because inflation is so well disguised that the
markets’ implicit estimates of future inflation, which make up most of the
nominal yield of a bond, have historically shown very large cumulative
errors.
Longevity risk
Longevity defines how long the plan needs to last. Uncertainty about
longevity for a single life is very high so self-funding of the risk means you
have to plan on a long life and draw less. This risk can be eliminated by
an annuity, whose payout reflects the mean mortality of all insured lives
of the same age.
You have a choice about the form of annuity you buy, affecting the level of
income. Options include: a pension for the surviving spouse; maximising
starting nominal yield (leaving inflation risk uncovered); maximising
inflation protection; covering mortality risk while still enjoying payoffs
from equity bets. Once drawdown starts, the option of leaving the casino
by covering some or all of the longevity risk needs to be constantly
assessed as part of the management of the plan. The impact on the welfare
value assigned to a bequest has to be part of this assessment.
Investment risk
Investment risk is, as we have seen, best
described as the uncertainty or possible
error associated with assumptions about
the portfolio’s real total return. Since
we are interested mainly in risk as the
uncertainty of real outcomes, we need
this to be specific to the time horizon. For
foreign markets, the risk also needs to take
into account currency volatility.
A market is a potential building block of the
portfolio and exposure to different markets
should be diversified. But this principle
mainly applies to equity markets since the
diversification benefits of conventional bonds
are very weak relative to their high outcome risk and low real returns. The
risk within each market should be minimised by diversification, which can
be achieved very cheaply using index tracking funds or exchange traded
funds.
Outcome risk is best managed by diluting equity risk using a risk free
asset. We divide the plan into time slices (each funding say three years
of draw) and manage the asset allocation for each time-slice portfolio
dynamically as market conditions and horizons change. Broadly speaking,
early years are matched by cash, middle years by a combination of equities
and index linked (the only risk free asset in real terms) and later years by
equities. Clients see the aggregate portfolio allocations.
Knowing the odds
In a mathematical, modeled approach like ours, planning outcomes can be
quantified and expressed as probabilities, like quoting odds. Odds can be
use to differentiate between different ways of balancing risk and resources,
obviating the need for silly questions about risk tolerance which mean
nothing or anything. They can also be used to make choices along the
way, based on the progress of the plan. They are part of how an unbiased
adviser will demonstrate the impact on possible outcomes of paying low
or high industry charges. Above all, odds can be used to ensure any claims
made about a safely-sustainable real rate of draw can be backed up.
Stuart Fowler is a seasoned institutional investment manager and founder
of No Monkey Business, a wealth management firm for individuals which
puts into practice the no-nonsense principles set out in his book of the
same name published by FT Prentice Hall in 2002.
No Monkey Business Limited
Suite 5, 2 Station Court,
Townmead Road,
Imperial Wharf,
London SW6 2PY
+44 (0) 207 736 2434
33
Sweeping between the traditional gateposts
and rounding the corner into Fawsley Hall
is like stepping back in time
A full business centre, private bar, cinema, banqueting space for up to 120,
reception lounge and 8 sumptuous bedrooms are stylishly incorporated
within the bounds of this historic building. The result is country elegance
at its best with a touch of modernism thrown in. The walls are pale wooden
paneling interspersed with occasional murals whilst chandeliers drip from
the ceilings and swathes of lilies explode from huge ornamental vases. The
heart of Knightley Court, the Saunders Suite, is the ideal spot for black tie
dinners, formal presentations or workshops and affords clients absolute
privacy.
attendees can put all thoughts from their mind with a visit to the new
Grayshott Studio Spa which opened in April of this year. Situated in the
idyllic converted Coach House, this spa embodies absolute escapism
and is the first of its kind in the UK. Under the expert supervision of the
therapists, guests will enjoy natural treatments, beauty products sourced
from some of the world’s leading product houses and an innovative list
of pamperings. The moment guests step inside the immaculate interior,
normal everyday life will be left firmly on the doorstep and the true spirit
of incentive breaks realized.
By Emma Holifield, Indigo PR
From the moment they arrive, guests will be plied with piping hot
(and very good) coffee and left to take in the surroundings. Ceremony
seating can be arranged for audiovisual presentations ahead of resplendent
banquets whilst post dinner entertainment can comprise everything from
distinguished digestives in the private bar or private screenings in the fully
sound-proofed cinema.
If guests ever emerge, it will be to expound the delights of Fawsley Hall,
its exceptional facilities and all that it offers to the corporate and leisure
traveller.
Those attending larger functions can also enjoy exclusive use of the main
hotel and its many meeting rooms. In the summertime, events often spill
out onto the house’s main lawns
or original courtyard immersing
guests into the most inspiring and
relaxing of surroundings.
Throughout March and April, exclusive Corporate Day Rates will be
available from £60 per person including VAT and 24hr rates from £175 per
person including VAT.
Similarly for the leisure traveller, plush accommodation, a full English
breakfast and dinner in the delectable
Bess’s Brasserie will be available from just
£69.95 per person per night (inclusive of
VAT based on two people sharing a club
double room. Rates are usually from £175
per person per night B&B).
Ahead of you lies a grand Tudor Manor House, resplendent in
all its traditional glory. Intricate turrets pepper the rooftop, tall
bay windows reflect the skyline and the terracotta brick of the
converted outhouses throws gentle colour to the scene.
Ease away the strains of the journey with a cup of tea or coffee in the
historic and very comfortable Great Hall. Here, rich ochre rugs, twinkling
candelabras and a colossal stone fireplace are the backdrop to soft deep
sofas and attentive waiter service that guests will struggle to leave.
It was in 1975 that Mr. E A Saunders reclaimed this famous country seat
saving it from extinction. Then it resembled nothing more than a favourite
local picnic and walking spot and has now been reinvented as one of
England’s most treasured country houses. Fawsley Hall was a royal manor
as early as the 7th century and has since enjoyed a colourful past to become
the impeccably maintained English country house hotel that it is today. It
proudly boasts 4 AA red stars and 3AA rosettes and is listed in a host of
the very top hotel guides.
The promise of the beautiful bedrooms beyond however might just tear
you away. A trip up the quaint staircase leads you to a host of deluxe
rooms that immerse you in English rusticity. Several of the suites offer
four poster beds that are all florals, plush bedding and comfort whilst
the standard, club and superior rooms are equally as enchanting. Waking
up in the morning guests can enjoy a cup of tea from the privacy of their
own room overlooking the extensive Fawsley estate. Breakfast can then be
taken in the generous living area of the suites or downstairs in lively Bess’s
Brasserie with the other hotel guests. Time can then be taken to explore the
many walking trails and pathways meandering through the 2000 acres of
parkland surrounding the property. Be sure to admire the expansive lake
and look in at the local pub for refreshments before ambling slowly back.
To the left of the hotel’s broad gravel driveway, manicured lawns and a
helicopter pad (no less!) give way onto an original ha ha and 2000 acres
of estate beyond. In the distance, the tower of an ancient stone church
punctuates the skyline whilst sheep graze in the foreground. This is rural
England embodied and a refreshing change for the business traveller.
Unlike some of its stuffier counterparts who have cast the all too familiar
stigma over the ‘corporate entertainment’ sector, Fawsley Hall is one of the
few places that knows how to do corporate entertainment in style.
Stepping under the majestic stone porch and into the hotel hallway guests
are met by enthusiastic receptionists and a country home away from home.
34
For the corporate traveller, the luxury doesn’t stop here. The newly
refurbished Knightley Court, a Grade 1 listed stable block and exquisite
private entertainment building lies just next to the main hotel and is a
spectacular space. This property, dating from the Georgian era, has been
completely gutted and refurbished and reopened 18 months ago. The
interiors, a canny mix of traditional old and ultra functional new, offer
everything the corporate guest could possibly desire in chic country
surroundings.
When the formalities of the day
are over, guests can look forward
to memorable dining experiences
in either acclaimed fine dining
restaurant Equilibrium or more
relaxed Bess’s Brasserie. The
refined décor and sophisticated
menu
at
Equilibrium
can
be enjoyed from two small
private dining rooms whilst the
atmospheric Bess’s Brasserie
offers traditional British cuisine
in a larger livelier dining room.
For more information and reservations contact
01327 892000 or visit the website www.fawsleyhall.com
Fawsley
Hall
As the day’s presentations
and activities draw to a close,
35
Passing it on while the going is rough
By Peter Scott and Clare Savory
It is arguable that the media has a vested interest in the drama
of current financially difficult times. However there has been
a significant reduction in the value of property assets since
the high watermark of eighteen months ago. The UK economy
is officially in recession and there is an expectation of further
value “readjustment” to come. The FTSE has lost 30% of
its value. Values of goodwill in many unquoted trading
companies, with historically low trading levels, have been
significantly reduced.
Even if a PET subsequently becomes chargeable by the death of the donor
or future generations should be protected from profligacy or third party
gifted assets will have increased considerably outside their estates since
within 7 years, the value of the PET is frozen at the depreciated value of
claims. The high incidence of divorce is a particular concern to donors.
the date of those gifts.
the transfer in 2009.
The abolition of the favourable accumulation and maintenance trusts IHT
regime and the requirement for a beneficiary to take his or her interest at
Conclusion
Transfer of assets to trusts will now generally qualify for CGT holdover
18 if the gift is to be treated as a PET was particularly objected to. While
relief and therefore assets with accrued gains can be transferred to trusts
the Government did ameliorate that position the result is not generally
The advice therefore for all those considering generation tax planning
without triggering an immediate payment of CGT. In consequence the
regarded as a satisfactory one as the new regime lacks the flexibility for
at this time is to look at the current financially difficult times as creating
lower the current values of those gifted assets the lower is the held
trustees to respond to the varying capacities of the younger generation to
opportunities which may be once in a generation ones to transfer assets
over gain. On the other hand, transfer of assets to individuals with the
manage valuable assets at a prescribed age.
on. Trusts are still the favoured vehicle for passing down such gifted
exception of certain business assets, will not qualify for CGT holdover
assets or at least the principle of asset protection through trusts remains
relief. If transferred assets have accrued CGT losses then those losses can
Since then trust and tax practitioners have been exploring ways of
an influential one. If the IHT current entry cost to such trusts proves a
Most property owners, business owners and shareholders will choose
be used to offset gains arising on transfers to the same transferee. Careful
maximising gifts for lifetime giving in excess of the nil rate band by
disincentive because assets are of a substantial value then there are now
to sit out these difficult times waiting for an upturn; some are forced to
consideration is required of the CGT profile of all assets proposed to be
using the PET regime while enabling donors to have some means of
alternative quasi -trust structures which can be used and the options
realise assets in a falling market. The purpose of this feature is to suggest
transferred.
control and therefore protection over gifted assets and how those are
there are still developing.
managed. Quasi-trust structures have emerged; all are more complex and
that this is just the right time for those thinking of passing on assets
to the next generation to do so while low values prevail. Not all asset
The new flat rate of 18% CGT means that there is now a lack of alignment
more expensive to set up and to run than standard trusts which therefore
Peter Scott, partner, with assistance from Clare Savory, solicitor
classes have fallen in value of course; although the prices for modern
between the CGT and IHT rates. IHT remains at 40% for transfers on
makes them more suitable for holding gifted assets of more significant
Wealth Preservation Team
art have nosedived since Damien Hirst’s extraordinary auction, fine
death. If an IHT saving plan can defer a CGT liability of 18% while at
values. An example of such a structure is the family limited partnership
Private Client Group
English furniture broke the price record, set in 1993, four times in 2008 at
the same time avoiding an IHT liability of 40%, it is well worthwhile
where the general partners (quasi-trustees) manage the assets and the
Cripps Harries Hall LLP
Christie’s. Agricultural land has held its value and the consequence of
considering.
limited partners (quasi-beneficiaries) have a passive receiving role. For
Tel: 01892 506292
IHT such partnerships are transparent so that gifts from a donor to a
E-mail: [email protected]
rising commodity prices in 2007/08 saw a surge in value for a time.
To summarise, gifts to trusts over £312,000 will now trigger an IHT entry
New approach to tax planning
limited partner’s capital account will be treated as a PET.
cost of 20% on the amount over £312,000 but CGT on potential gains can
be held over. Gifts to individuals will be PETS and therefore no IHT is
New opportunities
When looking at generation tax planning both capital gains tax (CGT)
payable if the donor survives 7 years. If death is within 7 years the IHT is
and inheritance tax (IHT) are relevant. Diminished asset values create
based on the depreciated value at the date of gift. While there is no CGT
opportunities to mitigate those taxes when passing on assets to the next
holdover for gifted assets to individuals (with the limited exception of
These are simply to take advantage of the lower valuations of land and
generation. Recent changes to trust taxation have influenced both when
certain business assets) CGT will be calculated at 18% of that depreciated
other currently depreciated assets to achieve some significant generation
and how such transfers can be made most tax effectively.
value).
planning. For example a husband and wife jointly owning property
Gifts of assets to most types of trusts now will result in a 20% inheritance
Taxation of trusts changes
or shares can each make gifts of assets at 2009 values of £312,000 into
trust. They will achieve a transfer of value totalling £624,000. If they
survive seven years, their nil rate bands will be re-established which will
tax liability if the value of the gift made exceeds the donor’s nil rate band
of £312,000 and will no longer qualify as potentially exempt transfers
In 2006 when the Government introduced the new trusts tax regime,
allow assets to pass on the death of the survivor of a further £624,000.
(PETs). In contrast, a gift to an individual will qualify as a PET and
many professionals complained at the time that not all trusts are
Therefore, at current IHT relief levels, by modest planning parents
therefore at the time of the gift there is no financial limit on the amount
the creatures of tax planners. Many are made to reflect parents’ or
can successfully pass on around £1,248,000 worth of assets to the next
which can be transferred to an individual without triggering an IHT cost.
grandparents’ concerns that valuable assets passing to the next generation
generation without charge to IHT with a good chance that the lifetime
36
37
In Kenya it is very easy to plan and prepare for a safari that is as individual
as you are, and that satisfies your own personal needs and interests. If
you are planning a trip, use this website to explore Kenya in advance, and
decide where you would like to go, what you would like to see and what
you would like to do. Here are a few important first points to think about:
How Long and How Far?
Kenya offers a diverse range of environments all within relatively
close proximity to one another, and has an excellent domestic travel
infrastructure. This means that you can choice to either stay based in a
single location or to move around the country and see a range of different
places.
Your first decision should be how long you want to stay and how much
you want to see. Staying in a single place lets you explore that area in great
detail. In wilderness areas, this is the best way to really get to experience
many facets of an ecosystem. Kenya’s rich diversity of wildlife means that
no two experiences in the wild are ever the same.
Safari Styles
Kenya offers the traveller
an unparalleled range of
options. The incredible
diversity of landscapes,
cultures, wildlife and
activities mean endless
opportunities. With so
many choices at hand,
some people find the
prospect of planning a
trip quite daunting.
It doesn’t have to be
that way
By Cleopatra Gichuki
Each day you’ll experience and see completely different things. Spending
time in a single location also allows you to really get to know and learn
from the local cultures, and to get to know locals on an individual level.
Alternatively, it is possible in Kenya to take a safari to a completely
different destination every single day. This is a good option for travellers
who like variety of experience and environment. In a single trip to
Kenya, you can visit tropical forests, beautiful beaches, and deserts, climb
mountains and explore the wild.
Another choice is to decide on 2 or 3 destinations and spend a few days
exploring each one. The choice is yours. When you are planning your trip,
think about how many destinations you’d like to visit and how long you’ll
spend in each one.
Who to Bring
Whether you are travelling solo or looking for a family trip, Kenya has
plenty of options to suit. Think in advance about whether or not you’d
like to join an organized safari group, or have your own private transport
and guides. Kenya has plenty to keep the single traveller busy. Organized
safaris and camping trips are often great social experiences and a good way
to meet other travellers. Kenya is popular with independent travellers, and
is quite easy to meet up with travelling companions on the road.
For couples, Kenya is a perfect destination for a relaxing break. We have
many secluded, private guesthouses, camps and hotels ideal for romantic
stays or honeymoons. Kenya is also a great family destination. Kids love
Kenya, and the sights and experiences of a safari can outdo any theme
park. There are hotels that cater especially for families and have special
facilities, programs and safari guides for children.
Your own Style
Look at as many options as you can before you come to Kenya. Try
and plan for the perfect safari for yourself. If you want five star Luxury
accommodation you’ll be spoilt for choice. But if you want to really rough
it and experience life away from the trappings of civilization it can be
equally easily arranged. Think about how you are going to get around
and how long it will take. Do you want to be use light aircraft to avoid
long road trips, or do you enjoy the experience of driving through the
countryside?
It is possible to plan a safari that blends adventure and relaxation, luxury
and natural simplicity, social experiences and solitude. Consider trying
several different experiences and seeing this great land from several
different perspectives.
In Kenya, you can experience a different safari every day.
Cleopatra Gichuki,
38
Lead Tours Consultant,
Shique’s Africa Safaris Ltd.
P.o Box 61444 - 00200 Nairobi
Tel:+254 20 2129833
Fax:+254 20 4343176
Cell:+254 720 644 873
39
A Guide to Investing in Traded Life Policies
By Jeremy Leach, Managing Director, Managing Partners Limited
out sufficient diversification to control the risk. The old adage “don’t put
all your eggs in one basket” applies here because a manager should not
buy policies issued by just one company in case it goes bust. Thankfully,
this has not been a problem, even in the current financial climate.
It is also important to have a high number of policies because while it
is known from day one what a policy will be worth upon maturity, it is
not possible to know exactly when the life assured will pass on and how
many premiums will have to be paid before that date. The higher the
number of policies that are held, the greater the chance that the actual
maturities converge towards the standard life expectancies used to
manage the fund.
Investors can be forgiven for feeling a little shell-shocked
after the rocky ride they have had over the last two years or
so. The more money they had then the more they are likely to
have lost as financial markets went south. Lawyers, tending to
be among the richer echelons of society, will have been among
the biggest losers unless they had a financial adviser that
told them to sell their equity, bond and property investments
about two or three years ago.
Many investors and their advisers are understandably looking at whether
there are alternatives to these traditional asset classes. Some might look at
hedge funds or other ‘absolute return’ products. But even these have been
disappointing. And what about the ‘with profits’ policies that promised
steady, incremental returns for several decades? The failure of these
products to deliver on such promises has been well documented.
The good news for investors though is that there has been one asset class
that has managed to deliver steady, predictable returns even amid the
financial catastrophes of the last two years. This relatively new asset class
is known as traded life policies (TLPs).
TLPs are US-issued, whole-of-life assurance policies sold before the
maturity date to allow the original owner to enjoy some of the benefits
during their lifetime. The transaction by which an existing life insurance
policy is sold to third parties is known as a life, or traded, settlement.
Under the transaction, the buyer of the policy becomes the new
beneficiary.
Clearly managing TLP funds is a complicated task. But with the right
investment process it is possible to deliver secure, incremental returns
to a high degree of accuracy in the order of 8-10% per annum, year in,
year out. These returns are largely unaffected by what is happening on
financial markets because people always want to sell their policies at
all stages of the economic cycle, if not more so in downturns when they
might need to raise cash.
Last year was particularly good for TLP funds. The sterling share class
in MPL’s own Traded Policy Fund, which is available to retail investors,
delivered 10.56% net of all charges over the year to 1 January 2009. The
credit crunch was in fact beneficial for TLP investors, who were able to
buy them at discounted prices towards the end of last year from cashstrapped institutions with substantial portfolios that were selling TLPs at
a discount to raise money.
Some large institutions, such as banks, buy TLPs directly and build up
their own substantial portfolios. But there is another way to invest in
them that is available to ordinary investors: there is a growing number of
collective investment schemes, or funds, that invest in TLPs and which
are managed by professional fund managers.
These fund managers must use actuarial analysis to buy TLPs at the right
discounts, calculating backwards from the known face value, and carry
Another contentious issue is the fact individuals are selling assets at
deep discounts that they could otherwise pass on to inheritors. However,
40
The TLP market first took off in the 1980s during the AIDS epidemic,
when a substantial number of people required ready cash to pay for
care. Some years on, the market has now become much more focused on
policies written on the lives of seniors, or over-65s, where life expectancy
opinions are much more consistent. While the TLP market is still quite
young in many respects, it has grown at a phenomenal rate from a mere
$50m in 1990 to a staggering $10 billion in 2006. The potential is for
further growth. Unlike the UK, where the market in traded endowments
have a limited life span because people do not buy with profits policies
so much any more, people continue to buy life insurance policies in the
US. The total value of life policies held by the over-65 age group in the
US is currently estimated to be $500 billion.
There is still much room for expansion in the TLP market, too. One
reason for this is that life policies traded constitute a small proportion
of the policies surrendered each year. This suggests a lack of awareness
by policyholders of the secondary market. There was an average annual
growth of 42.9% in the value of life settlement transactions over the five
years from 2000 to 2004, yet their value as a percentage of sales of life
policies was just 0.2% over the same period.*
place for a much larger secondary market. As life expectancy in the
US rises over time, the chances are higher that people will outlive
the usefulness of their life policies, especially with regards to income
protection for dependents, who are more likely to become independent
as the subject of the life policy changes. Awareness of the life settlement
industry will increase as people realise they can get more for their policies
than if they were to surrender them back to the insurance companies.
Suneet Kamath, writing in the ‘Bernstein Research Call’ in March 2005
estimated the TLP market could grow to $161bn by 2030.
The market is now starting to display signs of its maturity as a major
investment class because large financial institutions are showing clear
appetite for market share. The introduction of adequate regulatory codes
covering the TLP market in an ever-growing number of US states is also
likely to contribute to that growth potential by providing an environment
in which the market can flourish even further and make regulations to
protect investors even tighter.
All of this is encouraging for those investors looking for steady,
predictable returns in the region of 8-10% year in, year out. TLPs offer
the kind of risk-return combination that with profits once promised
but eventually failed to deliver. If investors ever wanted proof of TLPs’
ability to deliver they could not have asked for more testing conditions
than those seen over the last two years. If TLPs can produce double-digit
returns in what has been the most difficult conditions seen on western
markets in living memory then it is hard to imagine an environment in
which they would fail to do so. TLPs have certainly earned the right to
be regarded as a significant asset class in their own right and investors
would add some stability to their portfolios by including TLP funds.
*Source: ACLI/Bernstein Research, march 2005
The factors are
all in
TLP funds are becoming popular. A report by Professor Merlin Stone
of the Bristol Business School, published in December, estimated
that investment in TLP funds by both retail and institutional
investors rose by more than 50% over the year to 1 November
2008.
One of the reasons that Professor Stone believes that TLP
funds are likely to grow in popularity among retail
investors is that they can be a good replacement for
with profits-based investments because they offer
steady, incremental returns with relatively low risk.
The sensitive nature of TLPs in being linked to
the lives of individuals does raise emotive issues.
But investors should have a clear conscience
about investing in them. There are many reasons
why someone may wish to sell a policy. People’s
insurance needs change throughout their lives.
For example, a young couple might take out
insurance to protect each other or their children
against their premature deaths, but they might
divorce or outlive their children. Premiums can
also become a burden or unnecessary expense
and they might need ready cash to pay for care.
Companies insure their staff but those staff might
leave the company, the company might become
unable to pay the premiums or a new owner takes over
and changes the staff benefits. For all these reasons and
many more, thousands of policyholders in the US decide
unsolicited that they want to sell their policies each year.
The fundamental advantage of TLPs for investors is that the face value of
a policy is known; what is unknown is when the life assured will pass on
and that value will be paid out. The premiums will have to be paid until
that date.
it is worth bearing in mind that the TLP market allows policyholders to
benefit from policies they have paid for themselves, rather than having
to pass those benefits on to anybody else. As part of the life settlement,
inheritors have to approve the transaction before it can take place. It
should also be borne in mind that a second-hand market exists only
because it offers policyholders much better prices than they would get
from the insurance companies, which offer zero or near-zero surrender
values.
41
On Just One Day...
20th January 2009
• Barack Obama sworn in as the 44th President of the United States
• S&P cuts Spain’s credit rating
• Gordon Brown and Alistair Darling announce the second rescue
plan for the UK banking industry
• Crude oil falls below $33 a barrel as the strengthening dollar
reduces the appeal of commodity investments
• Britain to suffer ‘deepest slump since 1946 and worst of
big EU economies’
• Irish banks plunge on talk of nationalisation
• Minister tells French carmakers the price of a bailout will be
keeping jobs at home
• UK Treasury gives go ahead to print money
• Obama team looks at setting up ‘bad bank’.
How did these developments affect your investment portfolio?
Did they affect your overall financial objectives?
Thomas Miller Investment recognise the importance of
understanding a client’s needs. An investment portfolio
can then be constructed reflecting the client’s risk profile.
Only then can developments in financial markets be
interpreted for the client’s benefit.
Working together to secure your financial future.
Contact us
90 Fenchurch Street, London EC3M 4ST
Phone: 020 7204 2200 • Fax: 020 7204 2737
Email: [email protected] • www.tminvestment.com
Authorised and Regulated by the Financial Services Authority. No. 189829
No ordinary home.
No ordinary Insurance Broker.
Life is better when your assets and services are tailored to
your tastes and requirements. Insurance is no exception.
As a discerning individual you want a professional solution
to your insurance needs.
JLT Personal Insurance Providers offer a personalised service to
protect your possessions and lifestyle. Our bespoke policies are
flexible enough to accommodate your UK residences, holiday
homes, cars, yachts, motorboats and travel insurance - all within
one policy for complete peace of mind.
Insurance as individual as you are.
0800 093 9745
Jardine Lloyd Thompson Personal Insurance Providers. A division of Jardine Lloyd Thompson UK Limited. Lloyd’s Broker. Authorised and Regulated by the Financial Services
Authority. A member of the Jardine LloydThompson Group. Registered Office: 6 Crutched Friars, London EC3N 2PH. Registered in England No 00338645. VAT No. 244 2321 96.
4424_02/09
For a quote or more information

Supplement 2009 - Barrister Magazine

Transcription

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