First Names Group Blog

    Case study: PTC solution for a GCC family with international interests

    Posted by Peter Unwin on 17 December 2018

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    First Names Group was approached by a GCC family to establish a sophisticated and efficient operating platform to facilitate a range of international investments, both business and personal. Here I provide the details of our bespoke solution to meet the family’s complex and specific requirements.

    The family

    Several members of an ultra-high-net-worth merchant family, all of whom reside exclusively in the GCC region. The family already had considerable assets in the region as well as a number of international business and personal interests. They were looking to further diversify their investment portfolio internationally in order to continue growing their wealth and manage risk.

    The challenge

    The family wished to establish a flexible structure that would allow them to invest in various jurisdictions, such as Europe, UK and the USA, with a focus on private equity (PE) and real estate. The structure needed to own these new worldwide investments while also enabling the family’s existing international interests to be brought into the structure in future.

    In addition, the family was keen to retain a level of influence over the investment assets – a key point for entrepreneurial individuals used to being ‘hands on’. They also wished to include personal investments alongside business interests, but required autonomy for each family member over their respective personal assets, ensuring privacy and segregation between them.

    Our solution

    Working closely with carefully selected legal and tax advisers, we agreed that a private trust company (PTC) structure, held by a purpose trust, would be most appropriate for the family based on their specific needs and objectives.

    A PTC is a corporate vehicle set up to act as trustee of a trust, rather than having a professional trustee service provider assume the role as trustee. Taking this approach significantly increases the influence the family can exercise over the decision making process; for example, the PTC’s board of directors can include family members and trusted professionals who have a deep knowledge of the family’s business and financial affairs.

    In this case, the PTC board includes two of the family members alongside First Names Group and the family’s trusted adviser.

    Within the PTC structure there are separate trusts for each family member, which they settled for themselves and their preferred beneficiaries. Each trust contains two funds: a business fund, and a personal investment fund. The business funds will, to varying degrees, collectively invest in special purpose vehicles (SPVs) owning the underlying assets. The personal investment fund will be settlor directed.

    Ongoing activity

    Initial planning and the coordination of tax and legal advice has been completed and the structure is in the process of implementation. The purpose trust and PTC have been incorporated, the trust deeds have been executed by each settlor and we will shortly be incorporating Jersey SPVs to facilitate the ownership of two existing business investments in the USA.

    We will continue to work closely with the family and their advisers to bring their international business interests into the PTC structure, followed by each family member’s personal investments – which include investment portfolios, real estate and luxury assets such as classic cars, art and chattels, private aircraft and yachts.

    View or download case study PDF

    Peter Unwin is a client services director for First Names Group in Jersey. Peter specialises in delivering bespoke fiduciary services to ultra-high-net-worth individuals and families in the Middle East, in particular Saudi Arabia and Kuwait, and spends time in the region on a regular basis.

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    This article has been issued by First Names Management Limited on behalf of certain companies that form part of First Names Group. The article has been prepared for general circulation to clients and intermediaries, and does not have regard to the particular circumstances or needs of any specific person who may read it. Nothing in this article constitutes legal, accounting, tax or investment advice.

    The information contained in this article has been compiled by First Names Management Limited and/or its affiliates from sources believed to be reliable, but no representation or warranty, express or implied is made to its accuracy, completeness or correctness. All opinions and estimates contained in this report are judgements as of the date of publication, and are provided in good faith but without legal responsibility.

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