Feeding on Fatca: London & Capital US family office AUM surges 226%

London & Capital’s US family office has seen its assets under management (AUM) surge by 226% to £750 million and managing director Daniel Freedman sees no signs of this growth slowing.

The company has been a clear winner in this specialist field after many wealth managers and banks withdrew their services to American clients in the face of challenging regulation.

London & Capital launched its US family office back in 1989, becoming Securities and Exchange Commission (SEC) registered in 2004. As recently as 2009, it only had £80 million in AUM and four staff.

This was prior to the introduction of the Hire Act the same year and the subsequent Foreign Account Tax Compliance Act (Fatca).

But Freedman (pictured), who heads the now 14-strong team, said it was the US Court of Appeal’s ruling against a former UBS client in 2011 that gave growth a real kick-start. The court found in favour of the US authorities’ right to access Americans’ bank records anywhere, prompting a further wave of financial institutions jettisoning US clients.

‘The ruling worried a lot of firms that they would get into trouble if they were not fully compliant and the ball really started rolling,’ said Freedman.

‘The Hire Act and Fatca increased the amount of compliance and unless you are set up for this, you really shouldn’t be dealing with US clients. We are seeing more complicated cases coming over from competitors who don’t have the in-house expertise and there is no sign of this growth slowing.’

He believes London & Capital’s advantage in this field is that it offers a full suite of services: strategic financial planning, investment management and providing clients with compliant reporting.

It also works with several law firms and accountants that specialise in US tax and reporting requirements, including Withers and PwC.

The company has established ties with leading universities with a presence in the UK, including Princeton, Harvard, Yale and Brown University, where its advisers deliver educational seminars to alumni both past and present.

Freedman describes the US community in London as ‘tight-knit and organised’. It runs many societies and clubs the firm can present to, enhancing the number of word-of-mouth referrals.

The company has also taken on a growing number of US clients based in Paris, where Freedman said there is a large ex-pat community of around 60,000.

‘There are a lot of American citizens living there but there are only about eight to 10 accountants dealing with them,’ he added.