Globacor Articles

Shoreliner.com Magazine Issue 8 - 2002

JOHN BUJOUVES: BANKING ON BARBADOS

Shoreliner talks with John Perry Bujouves, the Principal and Founder of the Bayshore group of offshore wealth management companies.

Bayshore Capital Inc. is an investment holding corporation based In Ontario, Canada that focuses primarily on the financial services sector.

Shoreliner.com: Can you give me an overview of the companies operating under the Bayshore umbrella?

John P. Bujouves: The Bayshore group's focus is primarily in the financial services sector. Bayshore Capital has helped finance some of Canada's most significant e-commerce initiatives.In addition to our banks in Barbados and our Cayman Islands based asset management business, our group founded the i-money Limited joint venture between Bayshore and Barclays Bank UK in hopes to create Europe's leading personal finance portal under the imoney.com banner.The Bayshore group also controls RPM Technologies which is a world leader in end-to-end financial management and transaction processing software solutions. The RPM Open technology platform enables some of Canada's largest financial institutions to augment their existing legacy systems with a state-of-the-art portfolio administration, order processing and client servicing features.

Other successful Bayshore business initiatives include:

- 724 Solutions Inc., which develops infrastructure solutions that allow financial institutions to offer personalized and secure mobile banking investment and commerce services across a wide range of Internet-enabled wireless and consumer electronic devices.

- Priority Brokerage was a pioneer in the Canadian mid-tier on-line brokerage industry that was sold to The Charles Schwab Corporation in 1998.

- In 1995, Bayshore Trust became the first financial institution In North America to conduct on-line financial transactions - providing real-time credit scores and approvals in connection with on-line applications for mortgages, investment certificates and consumer loans. Bayshore Trust was sold to Trimark Financial Corporation, Canada's third largest mutual fund company in 1996.

Shoreliner.com: With regards to the Bayshore Bank and Trust Corporation, what were the reasons for establishing the corporation?

John P. Bujouves: Bayshore Bank & Trust (Barbados) Corporation offers a variety of financial services specifically designed for high net worth individuals and corporations. Simply put, our two main lines of business are;Firstly, Private Client wealth management relationships, private banking facilities, and trustee and company services in most offshore jurisdictions. Secondly, Institutional services including turn-key solutions for other financial institutions throughout the Caribbean.

Shoreliner.com: What are the advantages of operating offshore and, in Particular, Barbados?

John P. Bujouves: Until the early 1990s, Barbados was not particularly well known in the international financial services centre. However, in a relatively short period. Barbados has developed a strong and continually expanding offshore financial services sector on the foundation of a liberal low tax regime, attractive corporate system, sound infrastructure, cost efficient telecommunications and excellent human resource development.

Further, unique in the Caribbean, Barbados is a low tax jurisdiction with a treaty network which includes arrangements with the United States, Canada, the United Kingdom and some continental European countries. This combination, along with their long established and enviable reputation for political and economic stability and financial integrity, has attracted a wealth of major international companies, including ourselves, and investors who find that Barbados offers the best environment in which to conduct business.

Shoreliner.com: Is your commitment to personalized wealth management solutions what differentiates you from other similar organizations?

John P. Bujouves: Definitely. Bayshore Bank & Trust has the expertise to be able to provide unique planning and a personalized service. The senior management team consists of accredited experts in international tax, investment management and corporate services. We also take great pride in whom we do business with. Major professional firms and noted experts in international tax planning and investment management regularly demonstrate their confidence in us by introducing us to their most valued clients.

Shoreliner.com: What range of financial services do you offer to high net worth individuals and corporations?

John P. Bujouves: We firmly believe in the value of Independent, long-term advice based on a consistent and superior investment management track record. Through our close association with some of the world's leading asset managers, our clients have access to advisors that would be otherwise difficult for many Individual investors to reach.

Once we complete our proprietary Client Investment Profiler, we are in a position to recommend the portfolio structure and asset mix that best addresses our client's goals. Our database consists of over 1,200 independent money management firms, which are continuously analyzed to generate ratings and opinions on over 400 portfolio management processes. We use the support of The Consulting Group (a division of Salomon Smith Barney Inc.), which has a total support staff of 207 professionals including a 9 member Global Capital Markets/Asset Allocation Strategy Committee. The evaluation process is structured to consider each manager's history and potential. These are similar tools that we make available through Integris Institutional for other financial institutions and advisors to help manage their own client relationships.

In short, Bayshore differentiates itself by providing a comprehensive banking and investment relationship that is based on the ultimate flexibility of choice:

- Choice of banking, trust, corporate and other services;

- Choice of g1obal opportunities and asset classes;

- Choice of investment structures and domiciles;

- Choice of the degree of direct involvement an investor elects to exercise in the portfolio management process;

-Choice of complementary consulting, planning and strategy services.

Our clients can continue to expect nothing less.

Shoreliner.com: You offer investment in mutual funds through another company, Integris Funds. What were the origins of this company?

John P. Bujouves: With the advances of financial services technology over the past five years, extremely customized and personalized financial solutions can now be provided to "wealth builders." Where as in the past you needed to have a portfolio of at least $3 million to be able to access the latest asset allocation theory or hire the best-known institutional managers, now we can bring this to a much wider range of clients. This is exactly what Integris is all about. We can provide access to world-class investment managers and provide customized asset allocation services to clients through Integris. The proprietary software and hardware behind these services has developed to the point where we can take the customized portfolios that used to only be cost effective for multi-million dollar accounts and provide them to expatriates and other offshore Investors around the world.

To allow Investors a maximum amount of flexibility, Integris Funds offers two distinct classes of shares:

LIFESTYLE FUNDS These offer four separate classes of shares representing four distinct and diverse funds. In essence, these funds are designed to provide the "asset allocation" for the investor. The asset allocation/manager models that make up the four Lifestyle Funds were constructed by using mean variance optimization defined by risk in technical/statistical terms such as standard deviation, with the associated optimal asset allocation mixes. These models/mixes are a result of an 'efficient frontier' analysis combined with our own proprietary allocation strategies.

STRATEGIC ADVISORY FUNDS These funds offer eighteen separate classes of shares, which allow clients, with the assistance of their Financial Advisor to choose their own asset mix. The Integris universe of 18 strategic asset classes were analyzed by the risk/return optimization process of combining historical portfolio returns, standard deviations and correlations Into the most 'efficient' portfolio structure - the highest return for an identified risk (Std. Dev.).

The efficient portfolios can then be compared to the capital markets 'efficient frontier' (the capital market line that runs between the 90-day T-Bill and S&P 500 on the Risk/Return graphs). Efficient portfolios will be above the capital market line, indicating the 'value added' of the portfolios returns above the expected return for a given level of risk/Std. Dev.

Each class of share is a separate fund, with a different investment objective and style. If the markets or investors' financial needs change, they can exchange shares of one fund for shares of another fund within the offshore fund family with no cost.

Shoreliner.com: What advantages can you offer to your clients that set you apart from your competitors?

John P. Bujouves: Investors, particularly global Investors, who are looking to benefit from domiciling a portion of their assets offshore are usually confronted with a wealth of choice. In their offshore service providers, they are also confronted with a different kind of choice, between empathetic individuals who have a wealth of understanding about the best beaches or golf courses in the Caribbean, and professionals who have a deep understanding of wealth. Clearly, we are the advisor who have an understanding of wealth.

There was a time when clients could make do with a basic package of private banking services and sound, risk-averse – if second or third quartile-investment management performance. But today’s fast moving, high-tech business and capital market environment has changed all that. Now clients require timely communication, portfolio data and trade execution for a broad range of globally focused financial and investment services, preferably at the click of a mouse. With absolute security and confidentiality guaranteed. In today’s wired world, client service and technology have become the obverse and reverse of the same coin.

Our client service offering combines leading-edge technology, global financial and investment products, and a strong commitment to the human factor in helping investors realize our goals.

Our “best of the best” approach ensures that clients have access literally to a world of Investment choice, frequently to advisors who would otherwise be inaccessible to them In virtue of asset size or relationship strictures, or simply because they are not aware of their existence or areas of expertise.

Further, our technology ensures that via the Internet clients can access immediate information on their entire portfolios with a complete transaction history, 24 hours a day, 7 days a week. Initial portfolio construction can encompass virtually every major type of North American or International asset class benchmarked to a relevant performance yardstick and managed by some of the world’s leading managers.

Shoreliner.com: How do you ensure that client’s are offered the best professional investment managers?

John P. Bujouves: No Single investment manager can meet the needs of all investors or trusts. We make recommendations based on the research and evaluation of a wide variety of Investment management firms.

To identify and evaluate investment managers for our clients, our analysts will employ a multi-step screening process that narrows the large universe of available managers. Our analysts first make unbiased comparisons using multiple benchmarks to examine a manager’s absolute performance and risk adjusted returns over rolling periods. This, quantitative data, in addition to other compliance and qualitative information, serves as a starting point in the assessment of a manager’s overall quality.

The evaluation process is structured to consider each manager's history and potential. The same methodology and criteria are applied to each manager, resulting in the delivery of information to our clients in a form that facilitates the selection of managers best suited for each situation.

Shoreliner.com: Integris Institutional was recently established, what were the reasons behind this?

John P. Bujouves: Clearly our expertise is in financial services and technology. We specialize in the delivery of a wide range of offshore administrative services to financial institutions and financial planners around the world. We understand the competitive, global high net worth investors market and have designed a suite of services based on a technology platform that can assist financial intermediaries do a better job of managing the operational side of their businesses. We also ensure that our institutional clients, (we like to call them Partners), continue to control their primary client relationships while benefiting from the innovative use of technology to enforce 'best practice' service models. The key advantage for our Partners is continued control their client relationships, while Bayshore provides the systems support. In effect, we can help run the back office so our Partners can run their business!

Shoreliner.com: How do you intend to achieve these objectives?

John P. Bujouves: Integris Institutional, a division of Integris Funds Limited, was recently established to augment and solidify our relationships with our institutional Partners (tax or legal professionals, financial advisors, brokers or financial institutions). Since the release of the Integris family of funds, we have remained cognizant of the utmost importance of the relationships we share with our institutional Partners. We realize that Integris can only be truly be successful if we continue to offer our Partners and their clientele not only above average investment returns, but also investment expertise, support and competitive financial incentives. We are committed to making it easy to do business with us.

Shoreliner.com: What are the advantages?

John P. Bujouves: We have created proprietary secure partner extranet which provides sales and research tools that will;

-Enable our Partners to prepare detailed and professional investment proposals for investment products that carry their own corporate branding;

-Shorten their sales cycle and increase their responsiveness;

- Ensure their client's investment needs are accurately considered and documented; and

-Allow Partners to personalize investment recommendations for each Individual client.

Further, in a secure, personalized environment, our institutional Partners can

:

- Prepare professional investment proposals in an automated easy-to-use web environment

-View detailed records of a client's risk profile, history and investment performance;

-View detailed commission records on a per client basis or in the aggregate (includes complete financial details of each transaction, including all associated fees and commissions); and

-Amend the fee structure to include a front-load sales charge and/or annual administration fee.

Of course, the best way to learn about this new service IS to Visit our Site at Integrisfunds.com and request a demo password.

Clients should ask three crucial questions when evaluating the suitability of an institution, adds Bujouves:

  • Whether the bank can deliver on specific needs;
  • Provide a corporate style that is in keeping with the client's; and
  • Ensure that investment performance is risk-adjusted.

Further Bujouves adds, "using a bank such as Bayshore, that does not lend, encumber or leverage clients' assets whatsoever is also a key determinate when evaluating the safety of one's investments."

Many of the same principles apply in picking an appropriate trustee, experts say. However, there are a few key notable differences. First, it is important that investors make certain that their representative is a bona fide trustee– that means licensed, regulated and insured in the jurisdiction in which they reside. Above all, it's crucial that the trustee be properly insured and regulated because it is the trustee that is accountable for the preservation of assets and must act in the best interests of the trust's beneficiaries. The trustee is accountable for negligent acts and clearly has a fiduciary duty to its beneficiaries. "And it must still maintain flexibility to accommodate the evolutionary needs of a client," adds Bujouves.

Indeed, the scale of change sweeping the offshore banking market has thrust new decision-making demands and opportunities on both investors and wealth managers. For investors, the future will unfold with a plethora of choice; they will seek and receive an increasingly sophisticated level of service. For private offshore banks, it promises to be a brutally competitive and creative period as providers jockey for position in a shifting landscape. Many wealth providers will fall by the wayside. However, those that are most agile and willing to adapt to the new world order will not only survive, but also prosper.