Sally Tennant Motoring Along at Kleinwort Benson - Spear's Magazine

Sally Tennant Motoring Along at Kleinwort Benson

As a new CEO at Kleinwort Benson, Sally Tennant thought the bank was a little rusty, like an old-fashioned Jaguar. But as a sparkling British brand with foreign owners, it’s now… just like a Jaguar

As a new CEO at Kleinwort Benson, Sally Tennant thought the bank was a little rusty, like an old-fashioned Jaguar. But as a sparkling British brand with foreign owners, it’s now… just like a Jaguar
 
 
IT HAS A been an unsettled few years for Kleinwort Benson. Thanks to the financial crisis it changed hands more often than a dancer twirling down the line at a ceilidh and eventually ended up in the possession of RHJ International, a Belgian investment holding company. Speaking to Spear’s, Sally Tennant, appointed as CEO by RHJ two years ago from Lombard Odier, says KB was ‘a little bit unloved’.

But RHJ have gone about rebuilding the franchise, first hiring Tennant, who has in turn hired Stephen Rothwell from Schroders as head of Wealth Management and Paul Kearney – who also spoke to Spear’s – from a family office, Karrig Strategic Capital, as head of the Private Investment Office (PIO), as well as a new COO and CIO.

Tennant compares Kleinwort Benson when she took over to a Jaguar: ‘You could lift up the bonnet and there were a few rusty parts in the old days. Working practices on the shop floor were a bit out of date.’ But like Jaguar, goes the implication, under new owners KB has moved on to become that modern hybrid, a best of British brand with foreign owners.

Paul Kearney, who described joining KB as ’embracing the enemy’, elaborates on one piston in KB’s shiny new engine: its PIO division, which provides outsourced services for family offices. He favourably compares the US and UK/European family office models.

American FOs, Kearney says, are much keener on outsourcing and partnerships, which makes them leaner and cheaper. This is where KB comes in, working with FOs by offering to set up an independent investment committee, for example, to provide a cost saving and greater robustness.

Most family offices, he argues, are trying ‘to create the infrastructure that resides here in a bank’ with ‘much more robustness on much greater reliability’. Small firms cannot cover the waterfront with depth and family offices run by a patriarch often end up without a balanced portfolio but with ‘a constellation of esoteric investments’. Instead of recreating the wheel, why not go to Wheels ‘R’ Us?

Sally Tennant puts the same message came across loud and clear in the context of serving customers, gaining their confidence and securing your own long-term bottom line: ‘You have to be clear with your stockholders that – and we feel really strongly at Kleinwort Benson – we have no product to push.’ (This is, of course, exactly the same tune that small- and medium-sized wealth managers hum.)
 
 
TENNANT AND KEARNEY both talk of trust, being able to distinguish your adviser from a salesman, but also look to the wider context of trust in banks. Tennant thinks it’s hard for ‘much of the public to differentiate between a public, commercial and private bank’, meaning all get tarred and feathered the same.

Kearney directs his ire, on behalf of his clients, at the government and the Bank of England for playing with interest rates. ‘It’s a rigged market,’ he say, ‘when the government own a third of its own debt. The normal economic framework has been changed by the degree of political intervention and it is untested intervention, so no-one knows how that unwinds.’ It’s ‘an Alice-in-Wonderland’ situation.

He’s also not keen on the government or the Bank of England for failing to tackle enduringly high inflation, which harms families with inherited wealth. Paul Volcker, who sits on Kleinwort Benson’s board, came to lunch recently, Kearney says, and they talked about long-term inflation trends. Volcker, who was chairman of the Federal Reserve when inflation was in the teens, ‘will visibly wince when you mention that’.

If inflation is the greatest risk to old money, politicians’ current dancing around wealth taxes may be the big threat to new fortunes being created. Tennant is forceful but soft (indeed as she always is): ‘It’s not great for the economy if people feel there’s going to be a higher burden and less incentive for the entrepreneurial. Just look at the response in France: masses of people looking to leave the country.’ (Including, as of last weekend, Bernard Arnault, France’s richest man.) Taxes must be ‘balanced’, which is modern code for not too burdensome on the wealthy.

So the engine under Kleinwort Benson’s bonnet is now making all the right sounds. It just remains to be seen whether it will take its clients to their destination with a smooth ride.

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