I have spoken on this many times in the past. It is difficult (impossible?) to communicate the principle sometimes – either because the recipient’s mind is closed or because it is a difficult subject to communicate! We need to do more work on our communication too I suppose. It’s easy for us in so many cases – for example how our specialist knowledge can save or make a client tens of thousands of pounds simply ‘because’ but also how do we share how wonderful and unrivalled our staunch investment management systems are and what we can do with them? They allow us to acquire literally any quoted asset of any type or fund from any provider, without constraint.
For example, a week or so ago we sold a third of our holding in a secondary defence company. The quoted selling price at the time for our £0.25million shares for sale was £3.29 for the size but we managed to secure £3.335 because of how we dealt. Had we simply ‘pushed’ the stock out, guess what we’d have secured? The same day, we had an enquiry from a broker keen to source a line of stock in a shipping fund from which we have done very well so it’s good to top-slice and secure a profit to move into something else. Again, against a market price of $1.20, we secured $1.275 though we couldn’t satisfy all his need. To us, this is doing the job of managing and dealing the best we possibly can. It doesn’t show on clients’ valuation statements as they simply see the price they receive or pay for something – they don’t know how much better some transactions are nor how much extra their account is worth as a consequence. When we have client disposals to arrange (when funds are needed), we also try to batch clients together so that we make a meaningful deal size to be able to cross the stock for sale with new clients needing (and buying) them. The result is that both sellers and buyers secure the best ever terms as they enjoy a transaction at “the middle” and no-one else can beat that! So, of other select few sales, we managed to cross nine holdings. We don’t do any ‘better’ ourselves from all the extra work (the brokerage differential is minuscule) aside from knowing we are helping our clients eke-out the odd extra percentage point from the same assets, enough maybe to pay all our baseline management fees over a year and maybe some more on top is always good. So, if all you worry about is a headline ‘%’ and not the ‘value’ then you aren’t likely to understand that – or be our client I suppose!
Price of everything and value of nothing
