Founded seven years ago to offer customised advisory services to wealthy residents, citizens and businesses of Monaco, Rosemont Int’l is expanding its range of offerings to accommodate the principality’s evolving clientele’s needs, while also expanding into such new markets as Mauritius and Andorra.
Peter Brigham, Rosemont’s founder and director, tells Helen Burggraf what’s driving these changes, and what lies ahead
When Peter Brigham, a British-educated accountant who at that time hadn’t been long out of university, took a job with the UK accountancy firm Moore Stephens’s Monaco office in 1987, he figured he’d stay for perhaps two years, then move on.
Thirty years later, he is still there, and doesn’t appear to be planning to leave anytime soon. Except, perhaps, on business, in connection with his role as chief executive of the Rosemont International Group, the holding company of various related businesses he founded in 2010 – which has been expanding globally, especially in recent months.
Expanding globally, Brigham says, because these days, if you have high-net-worth clients like Rosemont’s, you have no choice but to expand beyond your borders, as such clients’ needs for more specialised, cross-border advice and services have grown, and become infinitely more complex.
And also, he says, because there are HNWIs in such often-overlooked places as Andorra – another European microstate, located in the Pyrenees mountains not far from Barcelona – who have similar, growing needs to those of their counterparts in Monaco.
Rosemont’s announcement in May that it had opened an office in Andorra came less than two months after it unveiled a new outpost on the Indian Ocean island of Mauritius.
Rosemont also has offices in Hong Kong, Singapore and Vietnam – some of these added in 2011, when it acquired a Monaco-based corporate services provider and “super-yacht” specialist named Monoeci – and affiliates in the British Virgin Islands and Cayman Islands, known, respectively, as Rosebank and Genfin.
(Super-yachts, a Monaco speciality, remain a Rosemont specialism as well as a result of the Monoeci acquisition, as might be suggested in the photo above.)
“Thirty years ago, Monaco was a fairly staid place, and the financial services world that looked after them here was fairly staid as well,” Brigham explained recently.
“In the 1980s, Monaco was very popular with the Italians; the Brits who came down typically were retired, had just sold their businesses, and were only intending to stay for five years to avoid the capital gains tax before heading home. Some of them, though, inevitably stayed on.
‘Younger people coming to Monaco now’
“What has changed since then is that there are younger people coming to Monaco now, from the UK and elsewhere, and they’re bringing with them their families, and running their businesses from here.
“These are entrepreneurs who are still in the middle of their business lives, and they’re coming here for reasons of lifestyle, tax, safety and convenience.”
The other major recent change, he adds, has been a global move in the direction of automatic information exchange, known as the Common Reporting Standard, which is coming into force this year and next under the auspices of the OECD.
With more than 100 countries now signed up to the CRS, the world’s richest individuals can no longer simply stash their wealth in a bank somewhere to avoid tax, as many non-residents of Monaco are widely have thought to have done until recently.
Instead, now that they are having to declare their wealth (because their banks are), they are having to think for the first time whether leaving it where it is remains their best option – and if not, what might make more sense for them to do with it.
This, Brigham notes, has thrown up a need for highly-experienced wealth managers in jurisdictions like Monaco, even as many banks have pulled out of the Monégasque market altogether, or else have instructed their relationship managers not to give tax advice, for reasons of risk aversion, a concern that emerged in the wake of the 2008 financial crisis.
“The banks have improved their game a lot, they’ve become a lot more sophisticated and skilled, moving away from retail banking and into private banking,” he says.
“But at the same time, Monaco has signed up to all sorts of exchange of information treaties, including the Common Reporting Standard, and the BEPS Multilateral Instrument, and now the banks have to prove why it makes more sense for people to keep their money here rather than, say, in London or Geneva or Frankfurt.
“As the banks have become more sophisticated, they are now realising when their clients should be taking advice, and as they do, they are sending them to us.”
The same dynamic is at play in Andorra, Brigham says, where the microstate’s four existing banks have not historically needed to provide sophisticated banking services and advice – until now, again owing to the CRS.
Here, Brigham defends Andorra as being far from the Pyrenees tax haven for skiers some still think of it as.
“Why would anyone go there for anything other than skiing?” he asks, rhetorically.
“Well, because actually it’s quite a nice place; and now that there is an opening up of transparency on the assets held in its banks, they are ramping up their skills there as well.
“Within the last few years they’ve introduced a residence-for-investment programme, and they’ve also made it possible for non-Andorrans to invest in an Andorran company, which before they couldn’t do.
“So now there is a real business case for people to run businesses out of a place like that; you can have a chalet with a garden for a fifth of what you’d pay for a place in Monaco, and you can run your business there with staff who cost a lot less to employ than in Monaco, London or Paris.”
‘A more active place’
Returning to the subject of Monaco, Brigham cites various changes that have taken place over the last 12 to 18 months that support his argument that the place sometimes said to have been the subject of W Somerset Maugham’s 1941 observation about “a sunny place for shady people” (though Maugham was in fact referring to the Riviera, of which Monaco is a part) is, today, moving purposefully in the direction of serious and high-end wealth management. (See box at the end of this story.)
“Monaco is becoming more of an active place for individuals to live and manage active businesses, and to hold their assets, and there are various new initiatives that have been designed to make it more a more attractive place for ultra-high-net-worth individuals to base themselves.
“Meantime, as Monaco becomes more transparent, it becomes easier to operate from here, as you’re no longer handicapped by being on greylists.”
A visitor to Monaco today might sense that it’s in the middle of a transformation by the number of construction projects that are currently under way, but to long-time residents like Brigham, the transformation isn’t limited to a few new buildings, or even greater financial regulation.
As he describes it, the formerly sleepy, picturesque village has become a vibrant place that is actively engaging with the outside world, even if it remains beyond the reach of anyone who isn’t wealthy.
“When I first arrived, we had to go to Nice to find a supermarket for our weekly shopping, and there were only a couple of reasonably-priced restaurants in Monaco, so we used to go to Nice for our nights out,” he says.
Now it’s the other way around, with ordinary people coming into Monaco [from France], for the wide choice of restaurants, bars and nightclubs, the supermarkets and the shopping.
“The handful of original restaurants have actually survived, but now there are many more.
“Building works dominate the principality at the moment, as low rise blocks get knocked down and are replaced with underground parking and high rise modern apartments. Until [recently enacted] legislation there was little heritage protection, but the works have so far been managed so as to save the character buildings.
“And the Rock, where the palace is, remains fairly untouched.
“Recently they’ve started work on a new extension into the sea, with plans that call for relatively low-lying apartment blocks with lots of greenery, a bit Singapore-style.”
These days, Rosemont’s Monaco clients are, Brigham says, “entrepreneurs at start-up stage; working professionals; successful or retired businessmen/women; and inherited wealth investing their private assets”.
“They are people or businesses based anywhere in the world, with assets typically in more than one country – we have a large proportion of English, French and Russian-speaking clients, with many based in Monaco, Asia, Africa and the Eastern bloc.”
Rosemont specialises in helping such clients “structure and administer their personal and business assets” for maximum efficiency, he adds.
As for what single piece of advice he finds himself giving most at the moment, Brigham says it is “make sure you know precisely what you own, and how it is held, and what will happen if you die or become incapacitated”.
“By this I mean, know which country each asset is held in, is it moveable, such as shares in a real estate holding company, or a fund) or immovable (real estate); where is it incorporated, who are the custodians, and who ultimately owns it.”
Of the myriad issues now facing wealth managers and their clients which have to do with the growing global move towards greater transparency and regulation, Brigham says the one he struggles with the most, as a matter of principle as well as the personal safety of the individuals in question, is the push for public registers of beneficial ownership.
“There is no reason why governments shouldn’t be able to access information about individuals’ and companies’ ownership of real estate and companies, but there is absolutely no justification for making that information public, putting it out into Google Land for anybody and everybody to see,” he says.
“The wrong information is going to go to the wrong place, there are discrepancies in the definitions, too much information is going to go too many places…
“I could talk all day on this subject.”
Monaco’s changing financial landscape
For decades, low taxes and an accommodatingly secretive banking regime were about all that Monaco’s financial services industry needed to keep the principalities residents happy, its seafront heaving with yachts, and its residential property at the top of world league tables for prices paid per square foot.
But the recent, global moves towards tax transparency, coupled with other changes, have prompted the government to introduce regulatory measures that, in turn, seem to be aimed at attracting new types of enterprise.
In May, for example, it was announced that the principality would be home to a major new sovereign wealth fund, to be known as the Monaco Investment Corp, “supported” by Prince Albert II of Monaco, with input from, among others, ex-Barclays CEO Bob Diamond. Perhaps most intriguingly, the fund is to be managed by an existing investment syndicate and merchant bank called Scepter Partners that is currently headquartered in New York, but which is relocating its head office to Monaco. (It also has offices in Hong Kong and Bermuda.)
The SWF’s founders include Brunei financier Rayo Withanage and a number of Asian and Gulf-based ruling family members – including Brunei’s Prince Abdul Ali Yil Kabier.
Meanwhile, last year, in what was said at the time to be a sign of Monaco’s determination to renew its wealth management business model, the Monégasque parliament approved a new law that will establish a regulatory framework for overseeing the activity of multi-family offices in the jurisdiction, by creating two categories of MFOs.
As International Investment reported in November, a consideration of those who were behind the MFO law was the fact that only 10% of the assets of Monaco’s foreign residents are estimated to be deposited in banks established in the principality.
The law was approved following a consultation period during which the government had sought, unsuccessfully, to allow banks and asset managers to establish MFOs in Monaco, and to be able to manage portfolios. These were deemed by the Monaco lawmakers to potentially create a risk for conflicts of interest to exist.
Like such other jurisdictions as Singapore and Abu Dhabi, Monaco is also setting out its stall as a contender for fintech start-ups and related enterprises, which the government has called “MonacoTech”. The launch is set for later this year.
Another sign of the changing times in Monaco has been the departure of a number of prominent banks. HSBC was among them, announcing last year that it would hand over most of its private banking business in the principality to CFM Indosuez Wealth Management – which, just a few months later, in turn sold some of its Monaco client book to the Monaco-based private bank Compagnie Monegasque de Banque (CMB), a part of Milan stock exchange-listed Mediobanca Spa.
Also last year, Goldman Sachs announced it would close its private wealth management office in Monaco.
This article originally appeared in the July/August issue of International Investment, where it may be viewed by clicking here.