Any investor looking for an investment that offers higher returns, less volatility, broader diversification, and a hedge against inflation would automatically get influenced towards mutual funds, equities, and Gold. However, these investment portfolios are 100% market correlated and heavily driven by market sentiment. The prospects of an alternative fixed-income investment seem even more enticing in these times of economic downturn.
Based in Dubai and London, Capital 3PM provide an alternative short term investment opportunity through a suite of non-market correlated UK fixed-income products. The investments are designed for high net-worth and sophisticated clients who are looking to diversify their portfolio and secure absolute of returns of between 8 & 12%. Capital 3PM are now in their 10th year with a 100% track record of delivering their clients expected returns. They have an ‘excellent’ rating on Trustpilot and more recently received ‘Best Ethical Fixed Income Investment UAE 2022’ award at International Business Magazine Awards 2022 in Dubai.
In an exclusive interview, we talked to Juli Fairclough-Davis, Strategic Development Partner at Capital 3PM. With over 20 years of Financial Services and wealth management experience, Juli started her career in London with Lloyds Banking Group. After 9 years, she set up her own business consultancy working with Merrill Lynch, Bank Of America and Nomura. She was instrumental in the Julius Baer and Merrill Lynch Wealth Management merger based in Zurich, then moving to Abu Dhabi to take up a senior management role with the Abu Dhabi Investment Authority. Juli joined Capital 3PM in 2020 to expand their international client base and fixed-income product offering.
Tell us about your experience at International Business Magazine Awards 2022.
It was an event that was very well organised, Atlantis, The Palm was a fantastic venue for everyone. It was put together extremely well and the award ceremony itself was fantastic. It was a very well-run event and we felt very privileged to be there.
What are the current market conditions that are making your investment products so attractive?
Capital 3PM specialise in one asset class which is fixed-income. When the markets are doing extremely well, you could be enjoying returns of 25 to 30% or sometimes even more, in these times a 10-12% return might not excite you. However, our USP is the fact we provide the same 10-12% returns during the bad times as well. As we perform well during the good and the bad times, people are coming out of the more volatile asset classes to enjoy the 12 % per annum returns. We are completely uncorrelated to the market and people find us as a safe haven right now. In these times of economic unrest, when the rate of inflation is the highest it has been for the last 50 years, money in the bank is actually a bad call. Money in the bank is actually a risk as the values keep decreasing year on year due to inflation.
Our fixed-income investments are asset-backed, insured and provide a safe haven even for a short period of time. Our lock-in period of 1 to 2 years is extremely attractive for many investors in the international space who want to diversify their portfolio. This is proving to be the best proposition considering the current state of the stock markets.
Tell us about some of the unique solutions provided by Capital 3PM.
Capital 3PM was founded by Adam Davis over 10 years ago. He spent his entire life in the UK property market and Capital raising space, my background lies in wealth management, so, between us, we have got a lot of experience across many financial sectors. Essentially, what Capital 3PM does is work with financial advisors, family offices, and institutions and raise capital in the international space. We currently have networks in around 45 countries around the world. We work with 3 UK providers that are looking to raise capital in the international space. Capital 3PM raise capital on their behalf. They are doing what they do in the UK and we bring them international money through our capital-raising arm. Our financial advisors and financial advisor networks have access to investors that are looking for fixed income. They are looking for solid investment proposals to invest money for 1 or 2 years.
What are the key factors that differentiate between the private investors and the institutional clients at Capital 3PM? How do you manage to cope with their varying needs?
A couple of weeks ago I was in Geneva, meeting a number of family offices and their representatives. These family offices have considerable wealth, and they have significant sizes of investments that they want to make. Most of our private clients come through our introducer network and financial advisor networks. Today, we have strong relationships with financial advisors. When we are dealing with retail clients or high net worth and sophisticated investors, they are mostly coming to us through our financial advisor networks. Its more hands-on with the institutional and family offices and we spend a lot more time with them. They have quite a larger amount of money to invest, so quite often those deals will take a lot longer. Some of our private investors, on the other hand, could get onboarded and be invested in less than 24 to 48 hrs from the time they have completed their application form. So, it is quite a quick process for the private clients that come through our financial advisor networks.
What is the investment approach that Capital 3PM is adopting for 2023 and for the coming 5 years?
Our diligence is very rigorous, and we only work with providers with a minimum of 10-year track record. They must have a significant amount of assets under their control and they have UK onshore banking presence. Security is important for us. There is either an FCA-regulated security trustee in place or an A-rated insurance policy in place. We do our due diligence very strongly and thoroughly. Over the 10 years, we only had four fixed-income products that we have ever taken to market. We get to appraise around 3-4 every week in the last 10 years. We have looked at thousands of proposals and hardly any of them pass through our rigorous due diligence. Once we have done our due diligence, we personally invest in them ourselves. Capital 3PM observes that once the investment goes through the full cycle, only then do we feel confident enough to take that out into the international space. This is for every investment product that goes out into the international space through our advisor network or through our family offices and these are solid investments that have had a proven longevity and have been operating for many years. All our products have a 100 % track record on coupons and capital repayments.
We recognize that in these times our clients are looking for a safe haven and want to sleep well at night and what you get through our products is a fixed return, over a fixed term. There are no surprises. You don’t need to open the newspapers every day and fret about where Tesla is, where Amazon is, where Microsoft is. Our clients are signing a contract that says ‘I am giving you my money for 1 or 2 years, you are going to pay me a fixed return over the 1 or 2 years and my maturity date is at the end of that duration.’ Everybody knows exactly what they are going to get from the very beginning. We really like to call it a ‘sleep well at night’ investment product. You know exactly what you are going to get and perhaps you could be more adventurous, if you so wish, with the stock market or in crypto or whatever takes your fancy in that perspective. In Britain, we say, ‘it does what it says on the tin’. Capital 3PM does exactly what it promises, there are no surprises.
As a seasoned investor, what is the one key forecast that you have for 2023?
We look for counter-cyclical investments that are not correlated to the market? Our three UK providers are long-standing industries and are actually doing better in a recession. Two of our providers are property developers in the UK and they develop properties for the BTR (Built to Rent), roadside retail and discount supermarket sectors. When we look at the recession or the economic downturn, especially in the UK, we are looking at people who are not going to be able to buy but could afford to rent. The UK has a deficit of affordable housing of around 400,000 beds. So, our two property developers are developing something that is completely counter-cyclical and recession-proof. They are developing build-to-rent complexes that institutions will take and buy, rent back to the general public or housing associations and this really provides a fantastic investment opportunity. These two property developers have got a 20-year track record. They have been through the 2008-09 financial crisis, the global pandemic and most recent economic challenges. Both companies are run by a board of directors with a combined experience of more than a hundred years. We have been working with both of these developers for many years.
Describe a typical day at Capital 3PM.
I came from a very corporate background in banking, and wealth management and I have worked for the Abu Dhabi Investment Authority. So, every day was pretty structured, it was pretty much planned, the meetings were planned and weeks scheduled. I was introduced to Capital 3PM through my financial advisor and I chose to invest into one of their providers. I had a great experience during the onboarding process. I was about to go back to Zurich because my time in Abu Dhabi had come up. Adam asked me, ‘How do you feel about capital raising and being a strategic development partner.’ He said he wanted to expand, he wanted to grow but could not do it his own. It was a great opportunity to get onboard and become a little bit more of an entrepreneur. There is no one day that is the same at Capital 3PM. We have investors in across 45 different countries across the globe. That means we have advisors in all those different time zones, by the time I am waking up in Dubai, the Asia group have already woken up and are mailing to us and by the time I am closing the book for the day here in Dubai, there is still Europe, the UK, and other regions where the operations are still going on. There is no typical day at Capital 3PM.
We have a brilliant administrative team here in Dubai who are invaluable to what they do for us. They are the engine room! These ladies here keep it running for us and they are processing all the applications that are coming from across the world. Adam and I are looking at flying around everywhere, bringing in new networks, meeting new advisors, promoting our products and delivering what we do best. Adam is in the UK, I am in Dubai. I will be going back to the UK for an event early before Christmas. In January, we will be both back out in Asia to meet new advisors and new networks as we promote our business. I have gone from a very corporate, structured planned day to a very unplanned day and what comes with that is a lot of excitement, and a lot of difference and it is certainly a breath of fresh air. As I said, no two days are the same and we just continue to really enjoy and delight our clients. I think our investments are the safe haven at the moment after seeing that everything else is going a bit crazy in the financial sector. What we do may not be smashing the lights out but you are certainly going to get returns that you expected and signed up to.
We are looking forward to 2023 and again no one could have predicted what was going to happen in 2022. We certainly wouldn’t have seen the stock market crashes, we would not have predicted the crypto nonsense and everything else that’s playing out. So, 2023, again, could be a year of surprises. There will be surprises elsewhere but we feel confident that our products will give you that fixed income and the sort of stable allocation for your portfolio. You can, by all means, take your chances in the stock markets but if you want to have something that lets you sleep well at night, then we are a good bet!
Excerpts of the Exclusive Interaction with Ujal Nair
