Political risk forces individuals to protect what they have and love

Date: 10 Jun 2015

Citywealth

Michael Giraud of the Salamanca Group in Jersey, says if the London property market fell by 20%, this loss is significantly less than the loss many purchasers would suffer in their home jurisdiction.

Define political risk for the UHNW clients Middle Eastern?

Political risk in the Middle East, in its most simplistic form, is the risk of losing everything with a regime change. The prospect of this across any socio-economic group is enough to spur people into action to protect what they have and love. UHNWs have reacted in a number of ways and as a firm we have helped families completely relocate from their home jurisdictions.

Middle Eastern money has predominantly come to London looking for trophy assets. Recent property laws have curtailed some activity but the trend continues. Do they buy here to hedge political risk and instability in the region or just because they can and for lifestyle?

A London property expert once explained to me that even if the London property market fell by 20%, this loss is significantly less than the loss many purchasers would suffer in their home jurisdiction if things went wrong either economically or politically.

What trends do you see in the Middle Eastern market for UHNW’s that you could tell us about?

In our experience, for the larger families, succession planning is frequently on the agenda with family governance structures increasingly overlaying more traditional fiduciary structures. The complexity of these governance structure is very dependent on the family’s needs, size, culture and global footprint.