60-second interview: Daniel Pinto, CEO and co-founder, Stanhope Capital
What led you to found Stanhope Capital?
I saw a gap in the market. On the one hand, private banks can be conflicted so expectations may not be met for clients, and, on the other hand, family offices often can’t offer investment expertise in all asset classes. Between these two extremes, there is a huge gap and Stanhope is able to fill it because we have the independence that you would find in a family office, but we also have the scale and reach of a big institution.
Tell me about your role at Stanhope.
As CEO, my role is a mixture of managing the company, advising clients and focusing on the strategic development of our business.
Very few people have managed to achieve what you have. What’s the secret to scaling up?
Run it like a business, not like a club of wealthy investors. Most of our competitors in the private investment or previously in the multi-family office world, run their companies like clubs for investors which is not the same thing as running the company like a business. You want to attract the best talent and have a solid business model, which includes making sure employees have the right incentives. Stanhope isn’t a family office any more, we may have started in that world but today we manage a hundred and forty families and forty institutional clients so we are better categorised as a private investment office.
What value do people like Sir Martin Sorrell bring to your advisory board?
A reality check. In the world of finance, a lot of people just follow the crowd and group thinking is prevalent. People think the same things at the same time. Individuals like Sir Martin Sorrell or Lord Browne are CEOs of large corporations, they are in touch with the real economy and they bring a perspective which might be different from the perspective of the City. To be a good investor, you need to think outside the box and that’s what they help us achieve.
What opportunities do you see in Brexit?
I’m not happy about Brexit. I think it’s a mistake for the UK and for London. But now that Brexit is a reality, it can become an opportunity for the UK if it transforms itself into a business-friendly market in Europe with lower taxes and a sensible regulatory environment. The UK has to make the best of being outside of Europe and to do that, the country needs to keep the pound rather weak to promote export. The UK also needs to protect its service industries which are probably the largest part of the UK economy and the only way to protect them is to retain talent here.
Are people still down on banks?
Banks have come a long way since 2008 and it’s also true that bank-bashing is a favourite sport in many places. It’s a fact that some banks have misbehaved and a conflict of interest still exists in my view but it’s also fair to say that banks have tried to improve and many did.
Any 2017 predictions?
Private clients will become more demanding, seeking higher returns wherever they can find them. Although equities are a much better asset class than bonds, returns coming from the public markets are likely to be lower in the next one or two years than they have been in the past three or four years. Clients looking for high returns will need to invest more in illiquid assets which include private equity, real estate and private credit.
What do you do to unwind?
I write or I read, both are very important to me. I published a book entitled Capital Wars a couple of years ago. I also run.
What’s your motto?
Never give up.