Tips from the £16bn in­vestor

The Jewish Chronicle - - BUSINESS - BY CANDICE KRIEGER

IT HAS been an awk­ward time for the UK in­sur­ance in­dus­try. Last week, for­mer In­de­pen­dent In­sur­ance chief ex­ec­u­tive Michael Bright and his two co-de­fen­dants were jailed for con­spir­acy to de­fraud. So what does one of the in­dus­try’s most ac­com­plished fig­ures make of the dam­age that has been done?

“This was a rare ex­am­ple of a dis­hon­est per­son pulling the wool over the eyes of the pub­lic and in­deed the reg­u­la­tors,” ac­cord­ing to Sir Mark Wein­berg, who at 76 re­mains an in­flu­en­tial fig­ure in the fi­nan­cial-ser­vices sec­tor. Be­yond this spe­cific case, the pub­lic has lit­tle to worry about, he in­sists.

“The sound­ness of the over­whelm­ing pro­por­tion of the in­sur­ance in­dus­try, and in­deed of the bank­ing in­dus­try, is be­yond ques­tion,” he tells JC Busi­ness.

Sir Mark, the founder of Abbey Life As­sur­ance and Al­lied Dun­bar As­sur­ance, is cur­rently pres­i­dent of fi­nan­cial-ser­vices provider and con­sult­ing firm St James’s Place (for­merly J Roth­schild As­sur­ance), which he co-founded in 1991 with Ja­cob Roth­schild. It now man­ages some £16bn of funds.

He ac­knowl­edges that the in­dus­try faces a chal­leng­ing time as it moves from old-fash­ion in­sur­ance-sell­ing to “wealth man­age­ment”. “Man­ag­ing wealth sounds bet­ter than sell­ing life in­sur­ance,” he says. “The phrase it­self is very vogue and is re­plac­ing life in­sur­ance, putting heav­ier obli­ga­tions on you as a life-in­sur­ance com­pany.”

As more of us de­fine our­selves as “high net-worth in­di­vid­u­als”, de­mand is grow­ing for more com­plex in­sur­ance ad­vice, and ac­cess to in­vest­ment tools such as hedge funds. In­her­i­tance tax is a key con­cern for his clients, but he ad­vises: “One should never choose an in­vest­ment be­cause of the po­ten­tial tax ben­e­fits or sav­ings.”

He sees the re­cent credit crunch as proof that math­e­mat­i­cally based com­puter mod­els are dan­ger­ous tools for plan­ning in­vest­ments. “The sim­ple truth is that the real world doesn’t cor­re­spond to the as­sump­tions made in math­e­mat­i­cal mod­els, with the re­sult that sev­eral hedge funds run by large in­ter­na­tional banks have re­cently seen large falls in value be­cause of the oc­cur­rence of events that their mod­els pre­dict will only hap­pen once ev­ery 200 — or even 2,000 — years.”

Pressed for in­vest­ment tips, he cau­tions that “things hap­pen, which you can­not pre­dict. In­vest­ing is not based on science nor math­e­mat­ics, but com­mon sense.”

His “four sim­ple rules” are: “In­vest for the long-term; be­fore you start, make sure that you have enough liq­uid­ity set aside to live well for the next two years; spread and di­ver­sify across as­set classes as much as pos­si­ble; and, fi­nally, choose the best pos­si­ble in­vest­ment man­agers you can find.”

Sir Mark’s ca­reer in the in­dus­try spans more than 40 years, dur­ing which he says he has started again — twice. Born in South Africa, he is a qual­i­fied bar­ris­ter who moved to the UK in 1962, where he re­ceived a masters in law from the Lon­don School of Eco­nomics.

But “not hav­ing the stom­ach” to start prac­tis­ing law for a sec­ond time in the UK, he founded Abbey Life As­sur­ance.

“When I was prac­tis­ing law in South Africa, I was do­ing some le­gal work for Sir Don­ald Gor­don on his Lim­ited Life com­pany and re­alised I had a nat­u­ral in­ter­est for mar­ket­ing.”

On mov­ing to the UK, Sir Don­ald agreed to put up 25 per cent of the £50,000 start-up cap­i­tal for Abbey Life. Sir Mark re­flects that the same start-up to­day would re­quire around £5m.

Al­most 10 years later, Abbey Life was taken over by the ITT Cor­po­ra­tion and Sir Mark left the com­pany, start­ing up Ham­bro Life As­sur­ance, later Al­lied Dun­bar As­sur­ance. He was man­ag­ing di­rec­tor un­til the early 1980s, help­ing it grow into one of the largest life-as­sur­ance com­pa­nies in the UK.

His­tory then re­peated it­self as the cor­po­ra­tion was taken over by BAT In­dus­tries, lead­ing Sir Mark to leave to es­tab­lish J Roth­schild As­sur­ance in 1991. It was re­named St James’s Place in 2006.

With more time on his hands af­ter step­ping down as chair­man two years ago, Sir Mark be­gan to look for other projects to get in­volved in. But the latest ven­ture that has caught his at­ten­tion was one he “would never have pre­dicted”.

He was put in touch with skin-can­cer spe­cial­ist Dr Marko Lens, who was look­ing for in­vestors for the de­vel­op­ment of his “anti-age­ing” skin cream, Ze­lens Skin Science.

“The cos­met­ics in­dus­try is not some­thing I thought I would get in­volved in, but he asked me. I swal­lowed hard and backed him.” The com­pany, which ex­clu­sively sup­plies Space NK stores, is run by Chief Rabbi Sir Jonathan Sacks’s son-in-law El­liott Gold­stein, who had pre­vi­ously been work­ing as Sir Mark’s per­sonal as­sis­tant.

Sir Mark’s wife, de­signer and hote­lier Anouska Hem­pel, is also in­volved in the busi­ness, cre­at­ing the prod­uct pack­ag­ing. “We both be­came fas­ci­nated by it. It is nice work­ing with Anouska.

“She has a con­sid­er­able ca­reer of her own which I take a lot of in­ter­est in, al­though I think she would throw me out if I got too in­volved in her work.” The cou­ple have six chil­dren be­tween them and home is in Hol­land Park, West Lon­don.

And while he goes into St James’s Place’s May­fair of­fices ev­ery day, “I don’t get up in the morn­ing wor­ry­ing about yes­ter­day’s sales fig­ures”.

He is a trustee of the Clore Duffield Foun­da­tion.

Sir Mark Wein­berg: “In­vest­ing is not based on science nor math­e­mat­ics, but com­mon sense”

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