Leaders in multi-family office solutions

Blue Chip speaks to Allan Bothma, Global Portfolio Manager at Private Client Portfolios.

Allan Bothma, Private Client Portfolios

Private Client Portfolios (PCP) is taking the lead in South Africa in providing high net-worth families investment solutions. What is the reason for this success?

Founded in 1990, Private Client Holdings strives to provide a specialist solution to our clients’ individual wealth management needs by building a bespoke financial plan with quantifiable goals. While the concept of a family office is by no means a new idea internationally, we are taking the lead in South Africa when it comes to providing high net-worth families with an all-inclusive wealth management solution.

We are able to deliver a forward-thinking service thanks to our carefully developed, integrated organisational structure, which is made up of six specialist divisions: Wealth Management, Portfolio Management, Financial Services, Fiduciary Services, Cash Management and Risk Management. Each unit concentrates on its own specialised aspect of wealth management, and most importantly, all divisions collaborate to deliver a cohesive multi-family office solution.

We are taking the lead when it comes to providing high net-worth families with an all-inclusive wealth management solution.

PCP has a bottom-up top-down macro-economy investment philosophy. Please define the philosophy a bit further and how it works for you.

Our investment philosophy is mindful of the people we serve and is grounded in independent rational thinking, diversification and long-term value creation. Our unique offering includes both local and offshore segregated portfolios and multi-manager unit trust funds, which allow for the efficient implementation of our best ideas across all asset classes.

Segregated share portfolios: We buy quality businesses at reasonable prices. This enables us to deliver better risk-adjusted returns over the long term. The first step in the Private Client Portfolios investment process aims to identify quality companies, that are not in financial distress and that trade at attractive valuations. This is easier said than done, since businesses that exhibit these high-quality attributes (high ROIC, high FCF conversion, strong balance sheet, etc) and with strong earnings power typically trade at premium valuations.

The second step involves fundamental bottom-up and top-down quantitative and qualitative analysis to establish an investment case for the companies identified in our first step. We will only add a company to portfolios if it, from a risk-adjusted return potential and portfolio diversification basis, enhances the overall portfolio.

Multi-manager portfolios: We have managed our multi-manager portfolios since 2003. By using a combination of best-of-breed local and international unit trusts, we blend the different skills and investment styles of these managers. This approach has allowed us to reduce volatility while achieving growth higher than inflation through different investment cycles.

We combine the views of leading independent investment houses with that of our own in-house research to develop the Private Client Portfolio House View that feeds into our asset allocation outlook. This forms the foundation of our portfolio construction and manager selection decisions. The PCP team overlays this with tactical asset-allocation decision-making (using bottom-up processes). The investment process is one of collective decision-making.

Investment success is very much up to the individual IFAs. How do you monitor performance?

At Private Client Portfolios, which is part of the Private Client Holdings stable, we take pride in developing an in-depth knowledge of what is important to our clients and how they personally measure wealth. It is a journey that is based on trust, mutual respect, expert knowledge and a genuine interest in their well-being. Private Client Portfolios has an enviable track record in generating consistently strong performance outcomes for our clients across both our segregated and multi-manager solutions. As a result, we have managed to both retain and grow assets under management.