31 Mar 2021

Leadership insight: how to navigate change with Daniel Pinto

How do you navigate an international merger during a global pandemic? Daniel Pinto, founder of Stanhope Capital, did just that. Here, he tells Mark Pomroy of Investec – which financed the deal – about his motivations, the lessons he’s learned and what the future holds.

Daniel Pinto, founder of Stanhope Capital, spent the first decade of his career working as an investment banker in corporate finance in London, before yearning to do things differently.  

“I worked in M&A and Capital Markets and I was very happy to have learned my trade in a good firm, but I felt that there was a space for an entrepreneur in what I wanted to do. A couple of years later I decided to create Stanhope Capital,” Daniel explains.

His vision was to build a wealth management firm with an independent ethos and global expertise – a combination that has proved highly successful.

Stanhope Capital has grown internationally over the past 17 years, while expanding its offering into merchant banking, consultancy private equity and real estate. In November 2020, it announced a merger with FWM Holdings (spanning Forbes Family Trust, LGL Partners and Optima Fund Management), which will see the group operate as a single company with a presence in Europe and the USA.

“Today, we oversee about USD25 billion on behalf of wealthy families and institutions. We have 140 employees and about 40 of those employees are dedicated to investment research across the globe and across asset classes,” says Daniel. “We have a global reach but maintain the transparency and bespoke service of an independent business.”

Daniel Pinto, founder of Stanhope Capital
Daniel Pinto, founder of Stanhope Capital

There is no such thing as cruising, particularly in entrepreneurial businesses. You need to move with the times, reinvent yourself periodically and continuously be pedalling.

Motivations of a business leader

Daniel has always been motivated by a desire to grow and improve the business. “As an entrepreneur, you start with a vision and by understanding what the clients might want, you try to build something that responds to or anticipates that client expectation. That’s the greatest source of satisfaction for me,” he says.

The need to stay relevant keeps things interesting. “There is no such thing as cruising, particularly in entrepreneurial businesses. You need to move with the times, reinvent yourself periodically and continuously be pedalling.”

Managing a transatlantic merger during a pandemic

Although the merger between Stanhope Capital and FWM Holdings was finalised during the coronavirus pandemic, Daniel and his team had met FWM Holdings’ executives – including its CEO Keith Bloomfield – previously. There was a natural fit in their approach to clients and both sides shared a global ambition. When travelling was suspended, they took negotiations online.

“When the pandemic took hold, we had to completely recalibrate the way we progressed this merger. The challenge was to keep everything together. Everyone was committed and really made sure that the train was kept on its tracks.”

It was Investec – as sole lender – that provided the capital to buy out the private equity backing of FWM Holdings. The newly formed Stanhope Capital Group then became fully owner-managed with the leaders of both businesses having shares.

The financial climate meant it was even more important that the deal was structured sensitively. “The world of markets is very volatile so you have to make sure that you have enough leeway to handle it. The Investec team was aware of the dynamics of the industry and worked with us to find a way to accommodate that flexibility in the loan package.”

With the paperwork now done, Daniel’s focus is on successfully bringing together two teams: one European-centric, and the other focused on the US.

“I’m not underestimating the challenge of putting together a group of 140 people on two sides of the ocean,” he says. “Of course, that doesn’t mean that we’ll do exactly the same on both sides of the Atlantic, because there are specificities to the US market and specificities of European markets that need to be taken into account.”

New York skyline from Central Park
Daniel Pinto on the financial complexities of a merger and how Investec helped

The world of markets is very volatile so you have to make sure that you have enough leeway to handle it. The Investec team was aware of the dynamics of the industry and worked with us to find a way to accommodate that flexibility in the loan package.

Looking to the future

With some of the uncertainty caused by the pandemic subsiding, Daniel and Mark agree other trends will continue to shape the wealth management sector.

 

There is a growing focus on purpose, including ESG (environmental, social and corporate governance) investing. “A company that is more attuned to the needs of its community is likely to do better than a company that treats them as peripheral to its business. So you don’t need to choose between returns and doing good, you can have both.”

Expansion in Asia?

All being well, Daniel doesn’t rule out further expansion of Stanhope Capital Group in the future. “We don’t yet have a home market in Asia.” he says, “I think that anyone that is looking at the world in the next 10 or 20 years will know that you have to have a solid base in Asia. We will growing both organically and through acquisitions when it makes sense.”

Any future mergers with other independent businesses would aim to preserve an owner-managed structure. “It’s a recipe that’s very attractive to founders,” says Daniel. “It allows them to pursue their entrepreneurial journey, but as part of a larger platform.”

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