Giving investors a clear line of sight
David Bulteel, Rensburg Sheppards
David Bulteel tells Yuri Bender about his strategies for sourcing and allocating capital in a climate where wealth preservation is paramount
The path of David Bulteel, head of international portfolio management at Rensburg Sheppards, which supervises client assets of £12.5bn (€14.1bn), has come exactly full circle since he started in the City of London exactly 30 years ago. He was recruited as a trainee at stockbroker Quilter Goodison, just a block away from his current HQ in Gresham Street, close to St Paul’s.
The stuffy Anglo-Saxon City, with its heavily male dominated, pinstripe-suited, old-boy network is certainly a thing of the past. But like Mr Bulteel used to do back in 1979, he still nips across the street to the Piccolo sandwich bar for his lunch. “You needed the old school tie to get access to the money from families who were your clients,” recalls Mr Bulteel. “Anybody from outside that background stood virtually no chance. When I came into the business, I was not going anywhere, even as a graduate.” But two things changed his career path and rapidly accelerated it. The first was the Big Bang of 1986, which deregulated the City and changed it into an American-style meritocracy and international financial centre.
The second was his keenness to find out about the fast-growing, oil-led economies of the Arab Gulf, following his transfer to rival brokerage and fund house Capel-Cure Myers. Regular trips to Dubai, Kuwait, Saudi Arabia, Bahrain, Qatar and Oman saw him building up strong links both with Arab families and expatriate workers, and bringing in sums of up to £5m for supervision in highly diversified, stock and fund based portfolios. In the early 1990s, these well-engineered, risk-graded accounts, ultimately referenced to a key base currency, made a refreshing change to the oversold, commission led insurance bonds peddled by many competitors.
But for Rensburg Sheppards, Africa is the big growth market today, as the Middle East was 20 years ago. “We still have a chunky Middle East business at Rensburg, but our biggest area of growth is Africa,” says Mr Bulteel, with Kenya and South Africa particularly strong sources of business. Its African ambitions have been helped by South African bank Investec, which owns 47 per cent of Rensburg and has an excellent distribution network. “Our strategy is to look at those areas where wealth is being created quickly, yet there is no local capacity to look after it,” reveals Mr Bulteel.
“That is the secret of international wealth management.” But sourcing the investments is just half of the battle. Allocating them to the correct funds and financial instruments is the main reason clients come to a wealth manager. While £1.5bn of clients’ assets are in mutual funds, managed in-house, Rensburg has £3bn in portfolios constructed from external funds on an open architecture basis, with the remainder in stock and bond portfolios for very high net worth individuals. “What people want is transparency and a clear line of sight. Madoff really rammed that home in a big way,” says Mr Bulteel.
“The big theme now has become the return of capital, rather than return on capital.” Investors are redefining what they mean by risk through demanding to know exactly what their benchmark consists of, to be sure they will not lose money. Mr Bulteeel’s clients are pulling out of real estate and infrastructure funds in favour of traditional equity and fixed income investments, going back to much simpler portfolio compositions of 20 years ago, although he believes there are “fantastic opportunities” in funds of hedge funds, which are trading on “enormous discounts.” The volume of assets controlled by a wealth manager such as Rensburg gives preferential access to third party managers.
“Gartmore and Fidelity treat us like an institution and we can get into their funds very cheaply,” says Mr Bulteel. “We can speak direct to a fund manager, not just their sales people, so we can make a much better assessment.” The key element to wealth management, believes Mr Bulteel is selling a service and structuring a portfolio independently, rather than selling a product. “You should never start from the basis of selling products,” he says.
