‘Constantly go for big returns and you will crash and burn’
While many economists struggle to predict what markets are going to do from one day to the next, Richard Leigh, managing director and co-founder of London & Capital (L&C), says that the firm has never struggled to navigate the macroeconomic minefield due to its long-standing philosophy of preserving its clients’ capital.
According to Mr Leigh, it is only when you introduce risk that things become more difficult. “The guys who want to achieve 12, 14 or 16 per cent [return on their investment] are the ones we steer clear of. We can’t help them because it involves taking too much risk, and the problem with that is it affects your name and reputation,” he says.
“If you’re constantly going for growth and massive returns, you will crash and burn at some point in time.”
This is the premise on which Mr Leigh and co-founder Daniel Freedman built L&C when they started the business in 1986. The partners, who have been friends since childhood and started their career at Hambro Life Assurance, broke free following the introduction of the Financial Services Act, as they wanted more freedom to deal with intermediaries.
I think had we not changed the company and continued to evolve, we would not have survived
“When the Financial Services Act came into play it meant we couldn’t trade just being at Hambro Life. The only way we could continue dealing with intermediaries [lawyers and accountants] was if we were independent. That’s what took us out in 1986.”
The duo launched the business with £100,000 and have spent the past 26 years expanding it globally.
“We always looked at things from a very big point of view and then brought it back to how can we actually get value out of it and add value for other people,” explains Mr Leigh.
Their first venture into foreign lands was to South Africa in 1987, where the company still generates 10 per cent of its overall revenues.
Mr Leigh explains that in 1997 South African citizens became subject to tax on the investment income from their foreign assets. In 2001, South Africa’s worldwide tax system became fully operational, meaning that individuals became fully subject to tax on a wider range of their foreign income sources. This created new opportunities for London & Capital.
“The government became increasingly aware that many individuals wished to repatriate illegal foreign assets, but were hesitant for fear of prosecution. Mindful of this, an amnesty was declared, encouraging maximum disclosure of foreign assets and facilitating repatriation of these assets to the Republic. We were among the vanguard, working closely with a number of trust companies to service this new market. Many clients remain with us to this day,” he adds.
Mr Leigh then took the firm into Canada because a lot of South Africans were emigrating there.
“Again, we dealt with accountants and lawyers in Canada, which took us into Israel and the Middle East and then into Australia and Hong Kong. At the same time Daniel [Freedman] started to work in America, growing the American business. We also grew our UK operation throughout, winning clients in Glasgow, Birmingham, Leeds and Manchester, and we built up a very big network of lawyers and accountants that gave us business throughout the world,” Mr Leigh says.