Afinishay Capital is a boutique investment firm based in the City of London. The company was founded by Tim Wilkinson in July 2016 and has to date raised $250 million of institutional capital for alternative investment strategies.
To leverage our extensive knowledge and network of established relationships, to provide institutional investors with real asset and other growth equity investment opportunities, specifically tailored to their stated investment objectives.
When people talk, listen completely. Most people never listen
– Ernest Hemingway
The principals of Afinishay have worked closely with pension funds and other Institutional investors for over twenty years and, throughout this time, we have listened carefully to their evolving needs and objectives.
Foremost among these is to invest in opportunities that have superior risk-adjusted return profiles and provide effective portfolio diversification.
Afinishay sources niche, and often difficult-to-access, investment strategies, with experienced management teams and compelling business models, that match each investor’s principal investment criteria.
As a matter of course, Afinishay only represents managers who offer investors:
- Better aligned compensation models that reward success
- Stronger governance with increased investor oversight
- Decision-making guided by ESG & SRI considerations
- Potential to make a positive economic and social impact
We advise managers on structuring and then make targeted introductions to institutional investors actively seeking to invest in such strategies. A two-step process that first makes a strategy investable and then provides the capital needed to transform a business.
To ensure that our interests are equally aligned with all parties, Afinishay is always compensated by the manager and primarily by compensation tied to the success of the strategy.
Capital isn’t scarce; Vision is.
– Sam Walton
H2 17 Outlook
Almost a decade of low nominal returns post the GFC has caused material asset price appreciation, which in turn has resulted in substantial yield compression across all asset classes. Liquid alternative asset strategies (hedge funds) have largely failed to deliver either effective returns or proper diversification. Less liquid (private equity) strategies have fared rather better, but have nonetheless disappointed in terms of value-for-money or accountability.
As a result, institutional investors are looking for real asset and growth equity opportunities that offer the potential for strong risk adjusted returns and provide inherent downside protection and capital preservation.
Investors are also seeking better terms and improved alignment, shunning high annual fees in favour of deferred performance-based remuneration. Investments are often made in the form of working capital in return for an equity stake or equivalent participation in the future profitability of a business.
The effect of not charging annual management fees is that investment returns tend to be higher and managers receive a higher percentage of the carry.
Investors are also increasingly required to incorporate ESG and SRI issues in their investment criteria, which they achieve by investing in strategies and businesses that make a positive economic and social impact, as well as delivering acceptable returns.
Banks continue to restructure, further downsize their balance sheets and reduce lending, particularly to small and medium-sized enterprises. This trend is likely to continue with the delayed application of MiFID II in January 2018 and the growth in blockchains, which has the potential to replace custody and depositary banks as the keepers of records and providers of digital ledgers for recording and listing financial transactions.
We expect to see institutional investors playing a bigger role in private debt markets, in parallel to their increasing involvement in private equity, as they step into another role traditionally performed by banks.
Finally, it is important not to underestimate the impact of Local Government Pension Schemes (LGPS) central pooling, which will result in 89 English and Welsh LGPSs consolidating into eight super funds, each with circa £25bn AUM, by 1 April 2018 (at least for long-only listed asset classes).
The aim is to improve investment returns, by reducing administration costs and management fees by £500m per annum. However, bigger pools will lead to larger minimum investment sizes and a more homogenised investment universe, resulting in a much narrower opportunity set.
In sum, it is hard to envisage a £25bn fund making sub £50m investments in niche opportunities. As these investments often deliver the best combination of outsized returns and real job creation, and tend to have the greatest economic and social impact, we believe there is a window of opportunity for LGPSs to provide patient capital to infrastructure, innovation and housing projects managed by experienced and ambitious management teams.
Tim founded Afinishay Capital in July 2016, having spent the last 20 years working closely with pension funds and other end investors. He was at Citi for 15 years from 1994, becoming Managing Director & Global Head of Transition Management in 2001, he joined Russell Investments as Managing Director of EMEA in 2010, before being appointed President of Sciens Capital, London, in 2012.
Mobile +44 7780 621 973
Charles joined Afinishay Capital in September 2016. He has over 25 years’ experience in financial services, specifically in alternative investments, FX and derivatives. Charles has co-founded two UK regulated companies, The ECU Group plc in 1988 and IFX Markets Ltd in 1995. He was previously a Director of Institutional Business at Saxo Capital Markets and an advisor to Maitland Group.
Mobile +44 7710 335 275
AFINISHAY CAPITAL LTD
7th Floor (North) | 11 Old Jewry | London EC2R 8DU | +44 (0) 20 7594 4972
Afinishay Capital Limited is an Appointed Representative of Laven Advisors LLP which is authorised and regulated by the UK Financial Conduct Authority.
Registered in England and Wales with number 10275250.