RE BU IL DI NG CHR IS TC HUR CH | CH IN AI NV OG UE | PRO PER TY INV ES TI NG | TH EA RT OF COL LE CT IN G JU NE 20 STRaIGHT 16 | ft TaLkING .c om /w ea eNtRePReNeuR sIRtom lt HuNteRoNPHIlaNtHRoPy, H scotlaNd aNdbIllclINtoN Issue BY HUGO GREENHALGH 39 FT WEALTH CONTENTS JUNE 2016 @hugo_greenhalgh CHRISTCHURCH 18 WINS ACCLAIM Five years ago, at 12.51pm on February 22,an earthquakemeasuring 6.3onthe Richter scale ripped through the heartofChristchurch, New Zealand’s then-second-largestcity. Thesleepy garden town on the eastcoastofthe country’s South Island was torn apart, with 185 deaths and its iconic cathedral left in ruins. Five years on, building continues apace. Thecathedralawaits repairs, but its cardboard replacement, literally built out of recycled tubes, has won plaudits. As have the country’sentrepreneurs, discovers Jamie Smyth, the Financial Times’s Australia correspondent. Moneyisnow flowing in for the reconstruction and the Ministryof Awesome, an entrepreneurs’ club thatmeets every Tuesday, is helping to ensure the city’sregeneration. Sir TomHunter knows afew things about regeneration —not leastwhenitcomes to his own fortunes. Hitbythe 2008-09 crash, Sir Tom FEATURES remains an active —and successful —investor,but 12 STRAIGHTTALKER is also channelling his energies into philanthropy in Sir TomHunter on how he his native Scotland and abroad. helps people help themselves Whattodowith vast wealth has taxed manya in Scotland and Africa billionaire and while Sir Tomhas announced he is 18 CHRISTCHURCHMOVES ON to give mostofhis fortune away,Christian Levett is Post-earthquake, this New determined to ensure thatthe public benefit from Zealand town is buzzing with IC KEZ his stunning collection of artand antiquities. entrepreneurs RA Dalya Albergewriteshow the British investment NA 22 THE ARTGIVERS VA manager built the Mougins Museum of Classical Art JO Collectors who find pleasure S; in the hills above Cannes to house and displayhis in sharing their collections 26 GE extensive collections of works. with the public MA YI TT 26 SECRETTREASURES GE Hugo Greenhalgh, Editor Chineseshoppers branchout S; [email protected] and are now looking formore thanjustalogo RICHARD VE DA YOUR NEXT FT WEALTH S: TO 09 SEPTEMBER2016 PHO 4 |FT.COM/WEALTH FT Wealth editor Hugo Greenhalgh Production editor Ruth Lewis-Coste Sub-editors Philip Parrish and Mark Dorman Artdirector KostyaPenkov Designer HarrietThorne Picture editor Michael Crabtree Graphics Russell Birkett Special reports editor Leyla Boulton 56 Global sales director Dominic Good Associate director,banking and finance Mariam Lolavar Publishing systems manager OPENINGS Andrea Frias-Andrade Advertising production 6INVESTMENT FOCUS Daniel Macklin India remains buoyant —and there are signs of change CONTRIBUTORS 8 THE RICH COLUMN DalyaAlberge is afreelancearts Is unregulated lending back writer on the agenda? HarrietAgnew is Citycorrespondent INSIGHT Claer Barrett is personal 10 MANAGE YOUR MANAGER finance editor It is time to talk about that 34 PROPERTY Daniel Ben-Ami is deputyeditorof seldom discussed ‘D’ word Living in the assetclass —why IPE Magazine London is agood long-term Emma Boyde is acommissioning property bet editor for Special Reports Judith Evans is property 36 EQUITIES correspondent Toomanyetiquetteconundrums Stephen Foley isUSinvestment for the uninvited hedgefund correspondent partypoopers AndrewHill is the management editor Sarah Murray is afreelancejournalist 38 INVESTMENT AndrewMacDowall is afreelance British boarding schools are seen journalistbased inBelgrade as the gold standard in terms of Naomi Rovnick is digital and education communities editor on FT Money Adam Samson is areporterfor fastFT 56 40 PHILANTHROPY in NewYork An iron-clad waytohelp Jamie Smyth is Australia reduce the problem of anaemia correspondent in Cambodia MatthewVincent is deputycompanies 42 editor 42 PHILANTHROPY Thedark side of wealth has aname 44 PHILANTHROPY Thedollars used to strengthen democracyinAmerica 46 PHILANTHROPY Families search for the sweetspot in medical research RE B UILD IN GC HR IS TC HUR C H | 50 CORRESPONDENT CHI NA IN VO WealthyRomanian families still GUE | PRO PE RT struggle to regain their roots YI NVE STI NG | TH EA RT OF C O 56 BOOK REVIEW LL ECT The Fractured Republic by Yuval ING JU NE 20 STRAIGHT 16 | Levin FT TALKING .C OM/ WE ENTREPRENEUR SIR TOMHUNTER AL TH ONPHILANTHROPY,SCOTLAND ANDBILLCLINTON ISSUE 58 AMBITIOUS WEALTH BY HUGO GREENHALGH 39 Whattoday’s billionaires might find when theyare woken from COVERPHOTOGRAPH their cryogenic sleep EUAN ANDERSON FT.COM/WEALTH|5 INVESTMENT FOCUS NAOMIROVNICK @naomi_rovnick CREDIBLE INDIA merging market stocks and currencies have been the “big short” for many professional investors for several years now.But for Eselective investors with some risk appetite, the assetclass is definitely worth alook. TheslowdowninChina’seconomy Forecast remains areality, but growth is only GDP growth settoslipfrom an annualised pace of 6.5 per cent this year to 6.3per cent in 2016 2.1 2017.Compared with more developed nations, China’soverall economic Country health remains intact. 2017 2.2 India remains buoyant. Economists 1.6 expectIndia’sGDP to increase by 7.5 per cent this year,and 7.7per cent in Tunisia 2017,making the countrythe world’s 2.2 fastest-growing largeeconomy. India is not overly dependent 2.1 on commodityproduction —oron China. With agrowing consumer Jamaica 2.5 economy, growth has been stymied by 2.2 Morocco bureaucracyand corruption. But there are signs of change. 4 Prime minister NarendraModi has -6.6 closed aloophole thatallowed wealthy Venezuela Indians and foreign investors in the countryfromrouting investments 2.4 -0.4 4.5 through Mauritius to escape taxation. Colombia Ghana Meanwhile, India’scentral bank has stabilised the rupee, brought inflation 3 6.3 to heel and begun tackling bad loans by banks. -3.7 India’smain stock market,the BSE 700% 3.5 Brazil Sensex, is valued at 20 times forward- 3.6 Predicted earnings, fair value for non-Chinese Peru 1 Nigeria Asian marketsand lower than the ASX levelof in Sydney, which trades at 25 times. Venezuelan 4 4.5 Investors seeking greater value should inflation this year look to India. Naomi Rovnick is digital and communities editor of FT Money 22% 17.6% Proportion of Brazilians who Proportion of income bought premium cosmetics people in Latin America in the first quarter,despite savedlast year GRAPHIC BY the country’srecession (IMF) RUSSELLBIRKETT (FT Confidential) 6 |FT.COM/WEALTH Stock market performance Year-to-date %change Shanghai Composite -16 BSESensex (India) -2 South KoreaKospi 3.1 67% 41.5% Micex (Russia) 19 increase in the Brent Proportion of income Bovespa (Brazil) 36 Crude oil price people in emerging Asia since the market hit savedlast year JSE (South Africa) 7 bottom in January (IMF) -1.5 Russia 1.2 1 in 30 Chinese people ownequities, so the effectsfromthe 1.5 6.5 Shanghai stock-market Saudi Arabia China slump arenot widespread (Capital Economics) 1 1.9 0.7 6.3 Ukraine Kazakhstan 2.2 2.4 1.5 3.1 Taiwan 7.5 Thailand 2.3 12 India 3.3 the number of consecutivequarters 3.6 7.7 6.4 that clientsofemerging Egypt 2.7 Vietnam markets-focused Aberdeen Asset Management have 4 UAE 5.9 6.5 pulled their moneyout 4.3 Philippines 2.8 Malaysia 4.5 5.9 6 Kenya 5.1 6.1 1.9 Indonesia 100% Singapore 5.4 Proportion of Turkey’s FX savings that its 2.2 gross external 0.6 financing requirement South Africa accountsfor 1.4 (Capital Economics) 16.5% Of the loans made by Chinese banksare not officially classed as loans FT.COM/WEALTH|7 theRIChColumn mAttheWVInCent @MPJVincent afaMilyaffair ne of Britain’s largest Griffiths-Hamilton has published a mortgageproviders has book called Build Your FamilyBank, been accused of granting and appears to mean it, literally.She £5bn worth of loans recommends that“all family members owithout anyformal checks are given clearly communicated on borrowers’ abilitytorepay—in guidelines regarding the family’s loan adisturbing echo of the subprime process, how family members qualify, mortgagescandal thattriggered the terms of repayment, interestcharged”. global financial crisis. John Maitland, head of UK private Research by Legal &General banking at SGPB Hambros insists on showed that300,000 of these high- “a legal document to provide certainty risk loans are due to be advanced this over how the funds would be repaid if year,financing aquarter of all UK the parents’ circumstances changed”. property purchases, despite many Indeed, with L&Gestimating that of the prospective buyers having a averagefamily loans in London work out historyofindebtedness, poor financial at 51 per cent of parents’ household net and laundrymanagement, and an wealth (excluding property), adviserssay impatient telephone manner when the risk exposure of mothers and fathers called about home computer problems. needs to be more closely monitored than In almostone in fivecases,borrowers Lehman Brothers. were deemed unlikely to be able to Then there are the tax implications, sustain their interestpayments, or,ina which no self-respecting global bank worrying sign of escalating delinquency can ignore… anymore. TomGauterin, rates, their interestinAunty Noreen’s chartered tax adviser at Irwin Mitchell hip replacement anecdotes when they mumand dadwerelooking PrivateWealth, says: “Be aware thatthe come over for Sundaylunch. to tiesebastian into a interestwill be subjecttoincome tax.” Richard Bertin, managing director After the L&Gresearch, spoof news of FF&P Wealth Planning, expressed flexi-rate deal for25years website TheDaily Mash reported the concern thatthe loans were being case of a29-year-old whoclaimed: “I targeted specifically at millennials, in Moreand moreyoung lender: the Bank of Mum&Dad. took out an £80k loan with the Bank much the same wayascraft beer and adultsare looking According to the L&Gresearch, of Mumand Dad… But todayI’vegot beard grooming equipment. “Isthere to their parents to the averagelump sum advanced by ashitty letter on headed paper saying help them climb the another mis-selling scandal looming?” property ladder British parents to adult children is thatmymum wants an extra£200 per he asked.