Wealth Manager: Stan Miranda of Partners Capital on the rise of the private investment office

When Stan Miranda and Paul Dimitruk established private investment office Partners Capital in 2001, their intention was to provide independent investment advice to 77 private equity professionals.

Nine years on, the firm has attracted the attentions of some of the world’s best known investment professionals, including Lord Rothschild, and has amassed over £4 billion in assets from £200 million in 2004.

‘The vast majority of wealth advised is by private banks and they are conflicted. This is obvious,’ he says. ‘A few years ago, with their clients growing weary of these conflicts, private banks began offering various forms of “open architecture” platforms populated at least in part with third-party funds.

‘But this proved uneconomical for private banks with their heavy cost structures. At this point in time, we are confident that no major private bank is ever going to move to simply offering the best independent asset manager line-up, as the economics just don’t stack up.’

Partners Capital has succeeded in bringing what it sees as the diversification benefits of the endowment investment model accompanied by a tactical overlay to the private client space. This, in turn, has enabled the business to grow at a rate of knots and diversify its client base in the process.

Although the business was initially designed and essentially acted as a ‘money manager to the money managers’, Partners’ investment approach has gained recognition across the industry.

While there is a clear opportunity surrounding the breakdown of the traditional monopoly that private banks have held in the private client space, Miranda says the potential opportunity to win institutional business, particularly from smaller foundations, is just as prominent.

Although the institutional space has traditionally been dominated by consultants, he says demand for a more attentive and ‘hands-on’ investment management appears to be growing.

‘There is a huge opportunity for people like Partners Capital in the area of independent multi-asset class or multi-manager platforms. Few serious investors today invest in just stocks and bonds. They know a broad range of asset classes with best-of-breed independent asset managers is the right way to invest. Nearly everyone knows that banks are conflicted, hence there is a huge growth opportunity in this area in Europe, but there are not many of us. There should be a lot more firms like Partners Capital than there are,’ he says.