Rothschild Blackpoint

Best High Net Worth/Private Client Fund of Hedge Funds Provider: Winner

Rothschild launched Blackpoint as a dedicated platform for alternative investments in 1993. Part of the Rothschild Group, one of the world's leading independent merchant banking and asset management organisations with over 2000 employees and more than 30 offices around the world including London, Paris, New York, Zurich, Tokyo and Singapore, the Blackpoint funds were originally established to run Rothschild friends and family investments.

Around a third of investments in the Blackpoint funds remain Rothschild money and today the group runs over $1 billion directly in funds of hedge funds strategies, with additional sums in dedicated mandates.

One of the key differentiators for the group as a high net worth and private client provider, points out Rothschild Blackpoint global client manager Carol Paterson Smith, is that clients can have the confidence of knowing that the Rothschild family has its own money invested in the funds. She also emphasises that managers and staff are invested in the funds too.

"The managers of the funds eat their own cooking," points out Paterson Smith. This is a very important ethos of the company. "When managers are running funds it is not just a question of the NAV going up or down, they are running money for themselves, their families and friends. If the fund is going down it is their money going down. This gives them a far different view of things and very much aligns their own interests with that of our investors."

The group also fosters a unity of process and communication between managers and marketing, another obvious alignment but one that is not always present in the market.

"Our sales and marketing team has full access to the information around the funds," says Paterson Smith. "What that means is we are able to meet with clients and give them the full picture about how investments are performing and why."

Doing so in plain English is also fundamental to the group's client service, she adds. "Our clients have to understand what the investments are about and we are honest and open in the information we give them to ensure that they do."

Another decisive factor in differentiating Rothschild from the market, is its ethos that "all clients should be treated properly no matter how much money they have invested in the funds," adds Paterson Smith.

Significantly, the investments of the Rothschild family do not receive preferential treatment within the funds - all money is invested on the same terms. Where some private funds running family money alongside that of external investors will see the family investments exempt from paying fees and receive preferential treatment at times of redemptions, this is not the case with the Blackpoint funds, emphasises Paterson Smith. The Rothschild family is subject to the same fees and annual charges and join the queue alongside other investors when it comes to redemptions, she says.

Perhaps the most decisive factor, however, is that Blackpoint is in the market for the long term. Paterson Smith points to the plethora of hedge funds of funds that sprang up between 2003 and 2008, when numerous banks jumped on the bandwagon because it was, in effect, easy money. Many of those have since closed and that flags the all important difference between funds run purely as a business interest and those run where the managers' interests are fully aligned with that of investors, argues Paterson Smith.

"The Rothschild family think that Blackpoint is a good place to invest and since 1994 the performance of the funds has seen them triple their money," she concludes.