Financial Provider Set to Trigger Expansion - Holdun


Tribune Business Editor

A Bahamas-based multi-family office, which plans to double its workforce by launching a new business and investment fund, says this nation must avoid the “rogue country” label at all costs.

Brendan Dunn, chief executive of Holdun Family Office, told Tribune Business that The Bahamas can ill-afford to be “blacklisted” given that such status would ultimately result in the likes of the European Union (EU) and OECD “doing everything in their power to weaken” the financial services industry.

Backing the measures taken by the Government to escape the EU’s tax “blacklist”, Mr Dunn nevertheless cautioned that this nation needed to adopt rules and regulations “that make sense for The Bahamas” while still meeting international best practices so that it did not comply away its competitive advantages.

Voicing optimism over The Bahamas’ future prospects, Mr Dunn confirmed that the Albany Financial Centre-based business is gearing up for expansion that will double local staff numbers to around nine to ten within the next three-six months.

He revealed that the fifth generation multi-family office, which manages wealth for other families as well as his own, plans to launch a new Bahamas-based company named Holt Financial within the next month to two months.

A real estate fund focused on investments in US commercial real estate is also ready to be unveiled, with Mr Dunn also disclosing that Holdun Family Office is expanding further internationally with the imminent opening of a Miami office within the next ten to 30 days.

Speaking after Holdun Family Office received the BV Award for the best multi-family office in the Caribbean for the second consecutive year, Mr Dunn said the company was already examining how it could use recently-passed legislation to escape the EU “blacklist” to its and its clients’ advantage.

“There will be another four to five [staff ] in place in the next three to six months,” he told Tribune Business of The Bahamas’ operation, which serves as Holdun Family Office’s international headquarters.

“It’s just the business that we’re doing; creating more companies and investing more stuff, and more clients need more staff to support them. This is building the foundation for future growth. We have a lot going on so we need the staff to support that.”

Mr Dunn said the Albany office was “all Bahamian” with no work permits, although the addition of new ventures would require some highly-skilled expatriate labour who would be tasked with effecting knowledge transfer to local workers.

“Everything we do has a long-term focus,” he explained. “What’s new is we’re launching a real estate fund focused on US commercial real estate. We’ll be investing, and offering it to our clients. That will be unique, and we’re working on other stuff we’ll be able to disclose in the next 30 to 60 days.

“Holt Financial, a new company, will be based here. It’s a whole new business. It’s in stealth mode right now, but we should be ramping up in the next month or two. We’re the biggest investor, shareholder, and are offering it to clients to participate in this institution.”

Mr Dunn explained that his family sought to be the first, and largest, investor in any structure or product it created to give its other high net worth family clients confidence and comfort that the investment was sound.

Describing this as “the trust factor”, he said: “I think we have a good reputation. We’ve been doing this for five generations. We’re not here for a quick buck, and that creates comfort with the clients. We strive to be the biggest investor in everything we do, put our money where our mouth is and make sure it’s aligned with the interests of clients.

“We’ve had good returns, which is obviously important, and provide proprietary product offerings which have done very well and offer great diversification for clients that they can’t get anywhere else. You can’t be a standalone money manager nowadays; you have to provide added value.”

Family offices, which some see as a key component of the Bahamian financial services industry’s next evolution phase, are much closer to their clients than a traditional private bank or trust company. They provide an almost personalised service for a high net worth family or group of families, managing their financial and everyday needs.

As a result, they can be much more nimble and decisive in responding to changing market and client needs – something that is extremely important in a climate where international financial centres (IFCs) such as The Bahamas are under almost constant attack and pressure from international regulatory initiatives.

“We never want to be big enough so we don’t know who a client is, and they’re just a number,” Mr Dunn explained. “I know who every one of them is, their background and myself and my father visit them every few months.

“We want to have a personal touch that you do not get from a larger bank, and be service-oriented and put the client first, moving quicker than a bank.”

Mr Dunn agreed that The Bahamas’ financial services future lay in attracting high margin, value-added business to these shores – something that may be encouraged by the “physical presence” legislation recently passed to escape the EU’s “blacklist”.

He added that The Bahamas’ still possessed the tax neutral platform, lifestyle quality, professional wealth management base, US proximity, airline connectivity and New York timezone to attract investors and high net worth individuals to follow their assets here – provided the jurisdiction avoided any “blacklists”.

“I could be very negative and say it’s going to hell,” Mr Dunn told Tribune Business of financial services, “but I want to live here, be here and it’s in my best interests to support the jurisdiction.

“We cannot be seen as a ‘blacklisted’ jurisdiction, and have to make sure we adopt rules and standards that….. make sense for The Bahamas. We don’t need all the rules. We have to pick and choose what’s best for The Bahamas but still conform to international standards.

“If we do that, the jurisdiction will not be blacklisted, it will be seen in a favourable light and will grow and prosper. If we’re blacklisted, we will be seen as a rogue country that the EU and OECD will do everything in their power to weaken, the glass will be half empty and the sector will suffer.”

Mr Dunn warned against going after undeclared capital that was non-tax compliant as this would shift frequently from jurisdiction to jurisdiction in a race to the bottom that The Bahamas should not participate in.

“For us everything we do is compliant,” he said. “All of our clients are fully declared, and we have no issue with disclosures and tax declarations. Any legislation that creates a better quality reputation for The Bahamas is good for us.

“Non-compliant people will always be jumping from jurisdiction to jurisdiction to fight the tax person. That’s short-term money; it’s not something we want to be associated with. If we were top start being seen as a blacklisted jurisdiction there’s a hit on the jurisdiction as a whole.

“Some people may choose to go elsewhere as it’s hard to do banking from a blacklisted jurisdiction, it’s harder to wire money out, and it’s the reputation of the jurisdiction that impacts whether people relocate there or go somewhere else.”

Mr Dunn also revealed that Holdun Family Office is expanding to Miami with a five-strong office that should be set-up within the next 10-30 days, once all US regulatory approvals are received. The location will give it access to the “Latin American hub” and clients from that region.

He added that the company’s second BV Award “shows a good light on The Bahamas”, and pledged that Holdun Family Office would continue to promote the jurisdiction over its rivals.