What if clients owned their bank? The idea has been floated before but not necessarily in private banking or wealth management. Is it even possible? A new firm thinks so and had decided to launch. Patrick Brusnahan writes
Wealthfusion, a multi-family office co-owned by the clients & the team launched in January 2021. It covers wealth
management, as well as a parallel property private office to cover the development needs of investment properties of clients. On day one, it will have combined assets under management (AuM) of over $450m on day one.
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The firm aims to be a proposition more “emotionally intelligent” than the norm. This is according to Udit Garg, managing
director at Wealthfusion. In the UK for twelve years, he set up an Indian family office and met a number of “amazing families” whose funds he managed.
Eventually, Garg and two colleagues from Sun Global decided to start their own venture. It wasn’t even their idea.
Speaking to PBI, Garg explains: “These families have pushed me into Wealthfusion by saying they will support us, they will be our equity holders, and our business, despite being a start-up, is a start-up in a different way.”
Clients and owners
Wealthfusion is owned by holding company Moneypenny Capital. In turn, Moneypenny Capital is two-thirds owned by clients. Garg says: “We decided to set up Wealthfusion, because we wanted to encourage similar families to come to us. The kind of families we work with.
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By GlobalData“Most of them are UK-based entrepreneurial families into their 60s and still working. They still have 10 -13 years of productive life left. Some of them are also professionals, working for large organisations. But we decided to start to offer a bit more than just wealth management, which is where we are a bit more different from the market.”
One of the products that makes the proposition different is Moneypenny Developments. This helps firms develop their projects, from council approval to architects and developers. In Garg’s words, you end up “actually paying yourself to do this work” and it becomes an “extremely attractive” idea.
Why take up this certain business model?
Garg says: “Because the togetherness has been there for so many years. We realised that this is a real business which can actually be better by being self-managed.
“In the end, any business which sets up or grows needs equity. We have the option of going to a private equity player or large organisation for them to be an institutional investor, but we chose not to because we don’t need them right now.
“If it was yesterday and there was a call from a large PE firm which works within the event management or M&A spaces and they said, “Listen, we know of commodities, we have to invest in your platform” then yes.
“Otherwise, we don’t need the money because we already have so much capital raised from our shareholders. The time will come for that in two or three years down the line, when we want to institutionalise our platform. The time will come when we will need one of these big boys to give us the direction, which will move us into the next stage. But I don’t believe that is right now.”
Future
As of launch on January 1 2021, the firm is directly authorised by the FCA and is a team of four. Garg guarantees that Wealthfusion will be “hiring more and more people” this year. But what else is the firm planning in its first year?
Garg concludes: “Our mission statement for the year 2021 is continuity. All I’m doing is moving from one platform to another, which is contrary to my other mission statement which is hypergrowth. We are looking to grow significantly in Kenya and Nigeria, because some of our shareholders are very well known families in Kenya and Nigeria.
“And the second focus area for us is a particular industry, it is a cash and carry operators.”
