New Citadel CEO Neil Brown takes listeners through the ins and outs of wealth management.

Bruce Whitfield:
Citadel is a top end wealth manager and it has got a new chief executive, his name is Neil Brown and he is on the line to us from Cape Town this evening. And Neil, there have been quite a few management changes in recent years at Citadel. Your predecessor moving through the ranks at Peregrine, which owns you, the listed company of course that owns you as well. Where have you come from? Have you grown up through the Citadel ranks?

Neil Brown:
Absolutely, good evening Bruce, it is great to be with you. I have, I have indeed been at Citadel for almost 10 years now. I started off in the product administration side of the business, effectively coming across from Sanlam where I was before to establish that business and I have been involved with that for the last nine or so years.

Bruce Whitfield:
So you have been through the machine?

Neil Brown:
I have absolutely, yes and it has been a wonderful experience.

Bruce Whitfield:
But looking at Peregrine, the share price there, down about 25 to 30 percent from its highs and it does imply that the wealth management arena is a far tougher environment than it was six months ago.

Neil Brown:
Well, that might be the perception out there. We are in a closed period right now, so I cannot really talk about too much detail in terms of how it is going with us. But we have had a good year.

Bruce Whitfield: And without pushing too much on that particular point, the wealthy are still wealthy. The wealthy are still trying to make money and it is up to you to find mechanisms for to do that in increasingly uncertain markets.

Neil Brown:
Well, firstly that is true. But we focus more on maintaining lifestyle and preservation of lifestyle.

Bruce Whitfield:
Which is increasingly expensive and require greater amounts of capital year after year?

Neil Brown:
Potentially, but the important thing for us is to really understand each individual and the family and really have a deep look at what their needs are and what their goals are over the rest of their lifetime. So for each individual and family there is a different plan and it is a different combination of ensuring that their goals are obtained and that is a combination of lifestyle preservation of growth of assets and doing the appropriate thing for them.

Bruce Whitfield:
And as a group of Citadel, are you looking at this from a helicopter perspective and saying where on earth do we put money in order to preserve it at the moment? Just how nervous is Citadel of global equity markets? About the uncertainty that has been created out of the United States? The possibility of recession and the slow down in South Africa as well you have got to consider I suppose?

Neil Brown:
I don’t think we are nervous at all. We have a very solid and sound process that we follow. For a long time now we have been fully aware and concerned of exuberance and the over heating in certain sections of the market and we have also been aware of the opportunities that are around. So I think that the important thing for us is to have a good solid plan and process in place and to have a clear understanding of where we want to go to in the long term.

We are not short-termists. We don’t look over a year, we really look over the entire lifetime of the client which also enables you to take long terms position. So you try and buy value, you look for opportunities and you put the necessary protection in place. So yes in certain areas we do have protection in place. And we are also great diversifiers across not only different asset classes by different countries.

Bruce Whitfield:
When you look at the market reaction to the news today that CitiBank has lost another five-billion dollars in the first quarter of this year. Do you get a sense that we are closer to the end than we are to the beginning of the current discomfort in global markets?

Neil Brown:
I think the one thing that we have learnt over time is that the future will surprise and that as you were saying earlier in talking, we thought two or three months ago, many people though that was it as far as the bad news was concerned. But we think that it is important to take a long term value approach. And when you do that it is easier to wait and let the sort of shenanigans of the market work themselves out.

Bruce Whitfield:
Neil Brown, good to talk to you. Look forward to talking to you in the future, the chief executive of Citadel. He is the new guy who is running the wealth management business there which belongs to Peregrine.


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