Our people reflect our deeply held beliefs. Sparrows Capital brings together a wealth of knowledge and expertise spanning the academic, technical and practical elements of evidence based investment management.
Yariv has over ten years of experience in strategic investments, risk management and asset allocation. Yariv is the key executive and investment manager at Sparrows Capital. He has worked with the Eliashar family for more than 20 years.
Yariv is a sought-after lecturer in wealth management and efficient investment strategies. He holds a BA in Economics and an Executive MBA from Tel-Aviv University, and is a trustee of the Wiener Library in London.Email
Until March 2012, Steven was managing partner of the London office of international law firm Dechert LLP, where he also served for many years as a board member. He was the senior partner at Titmuss Sainer before its merger in 2000.
He was Chair of Uropharma, a medical device company, until 2018 and a non-executive member of the board of international solicitors, King & Wood Mallesons, formerly SJ Berwin LLP until 2016. From 2008 to 2010 he was on the advisory board of surveyors CWM. He is currently on the board of the Family Office of the Landon Trusts.
As well as having served on the University of London’s Board of Trustees and currently advising on their estates strategy, Steven has also worked with a number of not-for-profit organisations, including the international wheelchair charity Motivation, the Freud Museum and the Hofesh Schechter Dance Company.Email
Professor Elroy Dimson
Consultant to the Board
Consultant to the Board
Elroy has chaired the Strategy Council for the Norwegian Government Pension Fund and the Policy Committee for the FTSE Group. He co-directs the Centre for Endowment Asset Management at Cambridge Judge Business School and is Emeritus Professor of Finance at London Business School. His publications include Triumph of the Optimists, Endowment Asset Management, and the Global Investment Returns Yearbook. He has been an Associate Editor of Journal of Finance, Review of Finance and other journals.
A co-designer of the FTSE 100 index, Elroy chairs FTSE’s advisory board and serves on the Council of Financial Analysts Journal. He is on the investment committees of Guy’s & St Thomas’ Charity and the Foundation for Social Entrepreneurs. He is past President of the European Finance Association, and Honorary Fellow of the CFA Society of the UK (FSIP) and of the Institute of Actuaries. He has received the CFA Institute’s James Vertin award, the Moskowitz prize, and the Bernstein Fabozzi/Jacobs Levy award. He holds a PhD from London Business School, an MCom from the University of Birmingham, and a BA Economics from the University of Newcastle.Email
Dr. Raymond Backreedy
With over a decade of professional experience within the financial marketplace, Raymond combines PhD level mathematical, statistical and engineering skills with honed logic and reasoning. His experience includes hands-on research, development and management of quantitative models and portfolios in both the traditional passive and alternative asset classes. He was a founding partner at Evolutionary Trading and Tekio Capital.
Most recently Raymond acted as consultant to the executive committee and board of trustees of a large Dutch pension fund, where he was involved in quantifying the impact of regulatory changes on their investment processes.
Raymond has a PhD and MEng from the University of Leeds in Fuel and Energy Engineering.Email
Mark is a seasoned practitioner in financial markets with wide ranging managerial and governance experience across credit, fixed income, equity and treasury markets. His knowledge spans multiple disciplines including marketing, trading, investment and the management of complex financial and regulatory risk.
Mark has previously worked for LBBW, Rabobank and Standard Chartered Bank, and chairs the UK Individual Shareholders Society (ShareSoc).
He holds a BA (Exeter), an MBA (Open) and the IMC.Email
Paul has over 30 years’ investment experience including 22 years with Schroders and GAM in London and Bermuda and more recently three years as a consultant to EFG Asset Management.
He specialises in working with fiduciaries, legal and tax advisers, investment consultants and family offices to provide specialist investment solutions for UK and international families’ private wealth and for charitable foundations.
A regular presenter at investment seminars for fiduciaries, Paul was invited by STEP to be a founding member of the Practitioners’ Group overseeing the Managed Portfolio Indices (MPI).
Paul holds a BSc in Banking and International Finance from Cass Business School, London.Email
John is a Chartered Fellow of the Chartered Institute for Securities and
He is a founding partner of Family Office Advisors LLP, a consulting
company which advises on Investment Strategy and Risk for UK and
multi jurisdictional Single Family Offices, families and trust companies.
In addition, he acts in a general advisory capacity, including Investment
Oversight and Reporting, to Single Family Offices, Trustees, family
operating companies, governance boards and family members.
John serves as Independent Non-Executive Director on the boards of
investment funds and companies and also advises on, establishes or
restructures investment and reporting solutions for regulated
investment & wealth managers.
Previously, John was Managing Director of Multi Manager Investment
Solutions for EMEA, within the Global Family Offices group at Northern
Trust in London, he established the Family Office Services business in
the UK for Mellon and also established the Investment Consulting
practice in the UK for EY.
Jesper Holm Nielsen
Jesper spent fifteen years with Privatbanken/Unibank (now Nordea) working with proprietary investments, retail products and structured finance. From 1999 he led, initially as CEO and later as Chairman, a start-up which became the dominant provider of corporate and trustee services in the Nordic region. In 2015 the company was sold to Intertrust. Since this exit Jesper focused on his own investment portfolio and in 2018 he joined Sparrows Capital as consultant.
Jesper holds a MSc (Econ) from Copenhagen University.Email
John has an established financial services career spanning 30 years in the City of London. He has a broad range of experience having advised HNW individuals as Managing Director of the financial advisory arm of a top 20 accountancy practice. He then spent 10 years at alternative investment house Man Investments as Head of UK Retail Distribution and subsequently at UBS, managing UK distribution for their alternative investments platform.
More recently he was partner at systematic index engineer QLAB Invest AG and also spent time in the Fintech sector before joining Sparrows Capital.Email
Sophie has a comprehensive knowledge of the industry, with over 10 years’ experience of working with financial advice firms, platforms and DFMs.
Prior to moving into Business Development she worked as a paraplanner for a number of years, providing a strong understanding of the needs of financial advisers and their clients.
More recently, Sophie worked in the FinTech sector where she was responsible for managing the launch of a range of risk-rated model portfolios.
Alistair has over 30 years’ experience in financial markets as a broker, trader and fund manager. His areas of knowledge span Fixed Income, Equities and Derivatives of all types, working both in the City of London and more recently, for two Local Authority Pension funds.
In the last 5 years, he has been focussed on evidence based Index investing, catering to the IFA market, providing detailed investment advice and commentary to help them navigate the increasingly complex world of financial markets.
Alistair was a CFA charter holder from 2004-2019 and passed the IMC exam in 2016.
He holds a BA in Politics from Liverpool University.Email
She is fab!Email
We believe that investment decisions should be based on empirical evidence backed by robust academic studies.
Our disciplined, objective approach combines lessons from over a hundred years of market data with the insights from Nobel prize winning research.
Risk is the primary driver of returns. Risk appetite dictates portfolio construction, which in turn drives expected investment returns. Targets and benchmarks must be consistent with a bespoke risk profile. Certain risks are historically better rewarded than others, and careful blending of risks can improve portfolio performance across the cycle.
We harvest strategic beta (the market return) in a highly cost efficient manner across the core liquid portion of our clients’ portfolios, leaving them free to identify and select complementary satellite investments.
The compound effect of management and transaction fees has the capacity to substantially erode portfolio performance over time. We use low cost, rule-based investment vehicles for maximum efficiency.
Loss aversion is a natural human behaviour, one which is often responsible for underperformance through ill-timed intervention and consequent lost opportunity. Our approach uses systematic rebalancing to maintain consistency of risk throughout the cycle.
At Sparrows Capital we provide full transparency to ensure consistency of understanding and to reduce client workload and stress. Our clients’ assets are held on their chosen platforms under their direct ownership. Reporting is clear, simple and intuitive.
Diversification acts to reduce overall portfolio risk without sacrificing long term expected return. We build in multi-layered diversification at asset class, geographic and underlying security level.
We invest primarily via ETFs and Index Funds. All our holdings benefit from full daily liquidity to ensure that access is unrestricted and that clients can retrieve their money at any time.
Our vision is to close the information gap, and to empower investors with the tools to make decisions on the basis of facts and empirical evidence.
We look to filter out the noise, and to make the process as simple, transparent, rational and cost efficient as possible.
In doing so, we aim to alleviate our clients’ concerns and anxieties over the short-term performance of their portfolios.
To the extent that material on this Site is issued in the United Kingdom (“UK”), it is issued for the purposes of the UK Financial Services and Markets Act 2000 by Sparrows Capital Limited (“Sparrows”) which is authorised and regulated in the UK by the Financial Conduct Authority.
Use of Information and Material. The information contained on this site (including any expression of opinion or forecast) has been obtained from, or is based on, sources believed by Sparrows and its associated companies to be reliable, but is not guaranteed as to its accuracy or completeness. This Site and the information herein is for general information purposes only. In addition, the information and materials contained in this Site and the terms and conditions of the access to and use of such information and materials are subject to change without notice. Not all advisory or management services are available in all geographic areas. Your eligibility for particular products and advisory or management services is subject to local law and regulation.
Risk Factors. Past performance is no indication of future performance, and nothing on this Site should be interpreted to state or imply otherwise. The value of investments may fall as well as rise and investors may not get back the full amount invested. Changes in rates of foreign exchange may cause the value of investments to go up or down. The levels and bases of and reliefs from taxation may change. Investors should consult their own tax adviser in order to understand any applicable tax consequences.
No Advice, Offers or Solicitations. The information and materials in this Site should not be construed as to provide tax, legal or investment advice. In addition, the information and materials herein shall not constitute an offer or solicitation, or an offer to sell, shares of any funds or any advisory or management service in any jurisdiction. The type of securities mentioned may not be suitable for everyone. USERS ARE URGED TO BASE THEIR INVESTMENT DECISIONS UPON A THOROUGH INVESTIGATION AND TO OBTAIN ALL NECESSARY PROFESSIONAL ADVICE.
Material Interests. Sparrows, its associated companies and its and their members and/or directors, officers and/or employees may have holdings in the investment funds referred to on this site and may otherwise be interested in transactions that you effect in those funds.
Data Protection. Sparrows is registered with the Information Commissioner’s Office as a data controller under the General Data Protection Regulation (GDPR). We may hold and process personal information for purposes of staff administration, advertising, marketing & public relations, accounts & records and provision of investment management and advice. We may transfer data outside the European Economic Area (EEA) where it may not be as securely protected as in the EEA.
United Kingdom’s Stewardship Code. The Stewardship Code (the “Code”) was developed from the Walker Review on Corporate Governance in the UK and aims to enhance the quality of engagement between investors (and investment managers) and UK listed companies.
Sparrows supports the principles enshrined in the Code. Although the Code is voluntary, the Financial Conduct Authority (the “FCA”) requires Sparrows to include on this website a disclosure about its commitment to the Code or, where it does not so commit, its alternative strategy. The FCA and the Financial Reporting Council have acknowledged that certain aspects of the Code are not directly relevant to all investment firms.
Sparrows invests almost exclusively in rule-based ETFs and index funds in order to capture market returns across all asset classes globally. Sparrows does not directly invest in shares or bonds issued by UK listed companies and therefore has no direct interaction with the management of such companies and does not enjoy voting rights in relation to such companies. For this reason, the Code is not directly relevant to Sparrows and it is not practical for Sparrows to implement a policy of direct engagement.
Sparrows’ due diligence prior to investment in an ETF or index fund does, however, take specific account of the fund manager’s own commitment to the Code (or equivalent depending on jurisdiction) and the nature of their engagement and voting policies with regard to companies in which their funds invest.
Given both Sparrows and the ETF or index funder provider’s index tracking requirements, there is very limited scope for stewardship through selective allocation or de-allocation decisions. For this reason Sparrows’ analysis focuses on stewardship through engagement and through the exercise of voting rights.
No Liability. The information on this site has been prepared, approved and issued by Sparrows. The information and opinions contained in this site have been compiled, or arrived at, in good faith and on the basis of publicly available information, internally developed data and sources believed to be reliable as at the date of publication. However, no representation, warranty or undertaking, express or implied, is made by Sparrows, its associated companies or any other person as to the reliability, accuracy or completeness of the information contained on this site and no liability is accepted by such persons for the reliability, accuracy or completeness of such information. In no event will Sparrows or any of its associated companies or any of their directors or other employees be liable to any person for any direct, indirect, special or consequential losses or damages of any kind arising out of any use of this site or any other hyper-linked site or in reliance on the information and opinions contained in it from time to time, including without limitation, any loss of profit, business interruption, loss of programs or data on your equipment or otherwise. This does not exclude or restrict any duty or liability that Sparrows has to its customers under the regulatory system in the United Kingdom.
You should be aware that the Internet is not a completely reliable transmission medium. Neither Sparrows nor any of its associated companies accepts any liability for any data transmission errors such as data loss or damage or alteration of any kind, including, but not limited to any direct, indirect or consequential damage, arising out of the use of the products or services referred to herein. In addition, neither Sparrows nor any of its associated companies accept any responsibility for the security or confidentiality of information transmitted across the Internet to or from Sparrows or any of its associated companies and any such transmission of information is entirely at your own risk. This does not exclude or restrict any duty or liability that Sparrows has to its customers under the regulatory system in the United Kingdom.
Copyright, Trademarks and Other Rights. Copyright, trademarks, database rights, patents and all similar rights in this site and the information contained in it are owned by Sparrows, its associated companies, their licensors or relevant third party content providers. You may use the information on this site and reproduce it in hard copy for your personal reference only. Such information may not otherwise be reproduced, distributed, stored in a data retrieval system or transmitted, in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the prior written permission of Sparrows. Nothing on this site should be considered as granting any licence or right under any trademark of Sparrows, its associated companies or any third party.
Governing Law. You agree that your use of this site and any dispute arising in relation to this site is subject to English law and you submit to the jurisdiction of the English courts in connection with any such dispute.
Conditions of Use. By using our website you agree on the full terms and conditions stated above.
Complaints. The services of the Financial Ombudsman Service in the UK may not be available to professional clients, unless they are, for example, consumers, small businesses or individuals acting outside of their trade, business, craft or profession. The Financial Ombudsman Service is a free and independent statutory dispute resolution scheme for financial services. Details of who are eligible complainants can be obtained from the Financial Ombudsman Service. The Financial Ombudsman Service’s website is at http://www.financial-ombudsman.org.uk
These are the Pillar 3 disclosures made by Sparrows Capital Limited (“Sparrows”) in accordance with the UK Financial Conduct Authority’s (“FCA”) Prudential Sourcebook for Banks, Building Societies and Investment Firms (“BIPRU”).
The European Union Capital Requirements Directive (“CRD”) created a regulatory capital framework consisting of three ‘pillars’ namely:
Pillar 1 – sets out the minimum capital requirements that firms are required to meet;
Pillar 2 – requires firms to take a view on whether additional capital should be held against capital risks not covered by Pillar 1; and
Pillar 3 – requires firms to publish certain details of its risks, capital and risk management process.
The rules in BIPRU 11 provide that Sparrows may omit one or more of the required disclosures if it believes that the information is immaterial. Materiality is based on the criteria that the omission or misstatement of material information would be likely to change or influence the assessment or decision of a user relying on that information for the purposes of making economic decisions. Where Sparrows considers a disclosure to be immaterial, this will be stated in the relevant section.
Sparrows is also permitted to omit one or more of the required disclosures where it believes that the information is regarded as proprietary or confidential. Proprietary information is that which, if it were shared, would undermine Sparrows’ competitive position. Information is considered to be confidential where there are obligations binding Sparrows to confidentiality with its clients and counterparties.
Where Sparrows has omitted information for any of the above reasons, a statement explaining this will be provided in the relevant section.
Unless stated as otherwise, all figures contained in this disclosure are based on Sparrows’ audited annual reports for the year ending 31 December 2018.
These Pillar 3 disclosures will be reviewed on an annual basis as a minimum. The disclosures will be published as soon as is practical following the finalisation of Sparrows’ Internal Capital Adequacy Assessment Process (“ICAAP”) and its annual accounts.
The information contained in these disclosures has not been audited by Sparrows’ external auditors and does not constitute any form of financial statement.
Sparrows’ Pillar 3 disclosures are published on its website.
Scope and application of CRD requirements
These disclosures are made in respect of Sparrows, a BIPRU firm authorised and regulated by the FCA, providing financial advice and discretionary investment management services.
Risk management objectives and policies
Sparrows’ risk management policy reflects the FCA requirement that it must manage a number of different categories of risk. These include: liquidity; credit; interest rate; market; and operational risks.
Sparrows manages all cash and borrowing requirements to maximise potential interest income whilst ensuring it has sufficient liquid resources to meet the continued operating needs of its business. This is supported by a robust budgeting and forecasting process which has the full involvement of the senior management team.
The main credit risk for Sparrows relates to income from fees, the risk being that a client does not pay amounts due for services provided by Sparrows. Quarterly management fees are charged to clients based on a percentage of the client’s assets under management. Concentration risk is defined as the risk of loss of income through external changes having a disproportionate impact on overall income due to a reliance on revenue from certain sectoral, geographic areas and/or businesses. Credit risk concentrations include significant exposure to an individual client or group of clients and credit exposures to clients in the same economic sector or geographic region.
A significant proportion of Sparrows’ income is received from clients that are part of the same group as Sparrows’ major shareholders. This ongoing interest in the activities of Sparrows by the group mitigates the risk of the group jeopardising Sparrows’ income flow.
Sparrows is exposed to country risk as a number of clients are based in a non-European Economic Area country. As these clients are all high net worth or ultra-high net worth long-term investors with spare capital invested in globally diversified liquid financial instruments, the risk of being unable to meet unforeseen financial needs and payment of Sparrows’ fees is low.
Based on the analysis of concentration risk, the risk of non-payment of fees has been assessed as minimal.
Sparrows has no exposure to interest rate risk.
The main market risk for Sparrows relates to falls in value of assets under management following a market downturn, which would lead to lower management fees. To mitigate its market risk, Sparrows regularly analyses various different economic scenarios to model the impact of economic downturns on its financial position.
Operational risk is defined as the potential risk of financial loss or impairment to reputation resulting from inadequate or failed internal processes and systems, from the actions of people or from external events.
Major sources of operational risk include: outsourcing of operations, IT security, internal and external fraud, implementation of strategic change and regulatory non-compliance.
Sparrows operates a robust risk management process which is regularly reviewed and updated by the Board. The Board formally reviews all significant risk issues annually as part of the ICAAP.
All senior members of staff bear responsibility for internal controls and the management of business risk as part of their accountability to the Board. All staff are responsible for identifying the risks surrounding their work, implementing controls over those risks and reporting areas of concern to their senior member of staff.
Sparrows operates a simple business model. Accordingly, many of the specific risks identified by the FCA do not apply.
Pillar 1 requirement
In accordance with the FCA rule GENPRU 2.1.45R (calculation of variable capital requirement for a BIPRU firm), Sparrows’ capital requirement has been determined as being its fixed overhead requirement and not the sum of its credit risk capital requirement and its market risk capital requirement.
The Pillar 1 capital requirement for Sparrows was £265,000 as at 31 December 2018.
Pillar 2 requirement
Sparrows’ overall approach to assessing the adequacy of its internal capital is set out in its ICAAP report. The ICAAP involves separate consideration of risks to Sparrows’ capital, combined with stress testing using scenario analysis. The level of capital required to cover risks is a function of impact and probability. Sparrows assesses impact by modelling the changes in its income and expenses caused by various potential risks over a 1-year time horizon. Probability is assessed subjectively. In addition, Sparrows has reviewed the outputs of its risk reviews to quantify any risks identified. This has identified a number of key business risks, which (having reviewed the guidance in BIPRU 2.2.61-65) Sparrows has classified against the risk categories outlined in FCA rule GENPRU 1.2.30R.
Sparrows Pillar 2 capital requirement, which is its own assessment of the minimum amount of capital that it believe is adequate against the risks identified, has been assessed as greater than its Pillar 1 requirement.
There is a considerable surplus of reserves above the capital resource requirement deemed necessary to cover the risks identified.
The main features of Sparrows’ capital resources for regulatory purposes, as at 31 December 2018 are as follows:
|Tier 1 capital (called up share capital, share premium account, profit and loss account, externally verified interim net profits)||613|
|Total of Tier 2 and Tier 3 capital (broadly long and short term subordinated loans)||–|
|Deductions from Tier 1 and Tier 2 capital||–|
|Total capital resources, net of deductions||613
Sparrows holds regulatory capital in accordance with the CRD. All such capital is classified as Tier 1 capital and is therefore of the highest quality.
Remuneration Code Disclosures
Sparrows is subject to the BIPRU Remuneration Code. This section provides further information on Sparrows’ remuneration policy.
BIPRU Remuneration Code Staff
Sparrows has identified, and maintains a record of, BIPRU Remuneration Code staff (“Code staff”), i.e. staff to whom the BIPRU Remuneration Code applies. This includes senior management and members of staff whose actions may have a material impact on Sparrows’ risk profile. All of Sparrows’ Code staff fall into the “senior management” category of Code staff (rather than the “risk taker” category) for the purposes of the BIPRU Remuneration Code.
Decision Making / Remuneration Committee
Sparrows does not have a Remuneration Committee. The Board is responsible for Sparrows’ remuneration policy including determining the framework and policy for remuneration and ensuring it does not encourage undue risk taking; agreeing any major changes in remuneration structures; reviewing the terms and conditions of any new incentive schemes and in particular, considering the appropriate targets for any performance related remuneration schemes; and considering and recommending the remuneration policy for senior staff taking into account the appropriate mix of salary, discretionary bonus and share based remuneration.
In determining remuneration arrangements, the Board will give due regard to best practice and any relevant legal or regulatory requirements including the BIPRU Remuneration Code.
Link between pay & performance
There is a discretionary variable pay element to the Sparrows’ remuneration package.
Quantitative information on remuneration
The FCA rules require certain firms to disclose aggregate information on remuneration in respect of its BIPRU Remuneration Code staff broken down by business area, senior management and other Code staff, including “risk takers”.
Sparrows has only one business area – investment management & advice.
Sparrows has 3 Directors but no “risk takers”. Director remuneration is agreed formally at Board meetings. The link between performance and pay is inevitable in a small firm, but Sparrows’ risk adverse strategy and robust risk management systems mitigate any risks.
We do update this Policy from time to time so please do review this Policy regularly.
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