Agenda | Issue 5 | March 2014 by Gallery Magazine

OFFSHORE BUSINESS

NEWS

EVENTS

COMMENTS

Issue 5

March 2014

MANX BUDGET IN NUMBERS UK TAX - SURELY NOT PRIVATE EQUITY - SINNERS OF SAINTS TECHNOLOGY - SURE INTERNATIONAL 4G NETWORK INVESTMENT - A UNIQUE BOUTIQUE PLUS - MOVERS & SHAKERS, APPS FOR UNFOCUSED MINDS & BUSINESS TRAVEL TIPS

Space to Flourish Planning • Design • Installation – Complete Solutions for Offices across the Isle of Man

On the Agenda... 84

KEY CONTACTS EDITORIAL & DESIGN Steve Redford DD : (+44) 7624 249249 steve@agenda.im

Sure International New 4G Network

In The News

ADVERTISING SALES Rachel Morris DD: (+44) 7624 209726 rachel@agenda.im

CONTENTS

CLIENT RELATIONS Laura Macgregor DD: (+44) 7624 249249 Laura@agenda.im Disclaimer: All rights reserved. Any form of reproduction of Agenda Isle of Man Magazine, in part or whole is strictly prohibited without the written consent of the publisher. Any views expressed by advertisers or contributors may not be those of the publisher. Unsolicitedartwork,manuscriptsandcopyareacceptedbyAgenda Magazine, but the publisher cannot be held responsible for any loss or damage. All material, copy and artwork supplied is assumed to be copyright free unless otherwise advised.

Manx Budget In Numbers

In The News .......................................... 84-90

A Unique Boutique .................................. 100

Sure International 4G Network ........ 92

A List Events ................................................. 102

Manx Budget in Numbers ................... . 94

Movers & Shakers ...................................... 104

UK Tax - Surely Not .................................. 96

Apps For Unfocused Minds .............. .. 108

Private Equity ............................................. ... 98

Business Travel Tips...............................110

100

A Unique Boutique

108

110

UK Tax - Surely Not

102

Apps For Unfocused Minds

A-List Events

Business Travel Tips by: Simon Pack RL360 3

IN THE NEWS

Business Agenda

IN THE NEWS

Sure Results Exceed Batelco’s Expectations

Sure exceeded expectations in 2013 in terms of both revenue and customer growth, according to its parent company, Batelco Group. In its financial results for 2013, Batelco said that increased roaming and improved handset sales had ensured that Sure’s revenues were 3% above forecast in the final quarter.

Isle of Man to host 2018 CSPOC plenary The Isle of Man is to host the 2018 Conference of Speakers and Presiding Officers of the Commonwealth (CSPOC), the Speaker of the House of Keys, the Steve Rodan SHK, has confirmed after returning from the 22nd CPSOC plenary in Wellington, New Zealand. More than 50 Commonwealth Speakers and presiding officers were among the 180 delegates who attended the conference at Wellington’s Parliament Buildings between January 21st and 24th hosted by the Speaker of the House of Representatives, the Rt Hon David Carter. Mr Rodan, who was accompanied by the Clerk of Tynwald Roger Phillips, said: ‘I am pleased that the conference accepted the offer extended by Madam President and me to hold the 2018 CSPOC plenary in the Isle of Man. ‘I am delighted that the conference has entrusted the Isle of Man to host this prestigious biennial event in 2018, the first time a nation as small as ours has been afforded the honour. Importantly, CSPOC 2018 presents a unique opportunity to showcase the Island and the Manx parliamentary system to the world. I look forward to joining with Madam President and Members of Tynwald in welcoming Speakers and Presiding Officers of the Commonwealth “family” to our shores to further the valuable discussions and deepen the lasting relationships the CSPOC plenary encourages.’ Mr Rodan also expressed his gratitude to the New Zealand Parliament for having arranged a stimulating and rewarding programme, which focused on reconnecting parliaments with the public and parliamentary privilege.

Furthermore, revenues on a ‘like for like’ basis saw 3% overall growth in mobile services, 11% growth on broadband & TV Services and 57% growth on wholesale revenues across the Isle of Man and the Channel Islands. The purchase of Sure and other companies has been welcomed as a great success by Batelco, with the report stating that “Batelco Group is very pleased with its purchase and as anticipated, the acquisition has had a very positive impact on the Group’s performance.” This impact has seen the group achieve 18% year-on-year growth and an increase in its subscriber base to 9 million. The report also confirmed that Batelco continues to invest in the Isle of Man and, this year, is looking forward to introducing 4G mobile services. “Among our plans in 2014 is the roll out of superfast 4G LTE for four of our new operations, including Sure in the Isle of Man,” said Batelco Chairman Shaikh Hamad Bin Abdulla Al Khalifa. “This is in line with our strategy to extend our expertise across our entire Group to deliver greater benefits for our customers wherever they may live.” Andy Bridson, Chief Executive of Sure in the Isle of Man has been pleased with the smooth transition to becoming part of Batelco Group. “2013 was a momentous year for Sure as we became part of Batelco Group. These financial results show that Sure continues to excel and deliver services that our customers enjoy and value highly. We are committed to leading the way for telecommunications services in the Isle of Man, and the introduction of 4G/LTE this year will see our customers enjoying some of the fastest mobile broadband speeds available. “I am grateful to my colleagues for working so hard to continually exceed our customers’ expectations and for ensuring that the transition to new ownership has been both smooth and very successful.”

IN THE NEWS

MM&C creates new brand identity for Isle of Man Chamber of Commerce Isle of Man Chamber of Commerce has launched a new brand identity to reflect its members diversity and agenda to modernise the organisation. The new image, created by Douglasbased marketing and communications firm MM&C (Mainstream Marketing & Communications), is designed to illustrate how Chamber members are working together to drive forward the economy across all key sectors. At the heart of the new brand identity is a distinctive logo which gives the Island’s traditional triskelion symbol a modern twist. Jane Dellar, Chief Executive of the Isle of Man Chamber of Commerce, said: “The new brand is strong, determined, contemporary and distinctive. I think it represents the many aspects of Chambers’ businesses working together. We are extremely grateful to Craig Wolstencroft and his team at MM&C for all their hard work which they provided completely free of charge.” Craig Wolstencroft, Managing Director of MM&C, said: “The Chamber has used the same branding for around 10 years and in that time the Island’s economy has undergone a dramatic transformation. As a Chamber member we felt that it needed a new brand identity to reflect the diversity and dynamism of the economy today, while also illustrating the Isle of Man’s traditional values of resilience and adaptability. We are proud to have created a new brand which fits the Chamber’s plans for the modernisation and growth or the organisation.”

Manx Radio Celebrates Golden Jubilee As“Heartbeat” Of The Isle of Man Manx Radio, the first commercial station to broadcast in Britain, is celebrating its Golden Jubilee after five decades of turbulence, challenge and controversy as the “heartbeat” of a nation living on an island in the middle of the Irish Sea. Its birth in a relatively momentous 1964 was the year which also saw the launch of BBC2 and the Beatles, the Kinks and the Rolling Stones become international icons. It was summer when Manx Radio made its first tentative broadcasts from a caravan parked in a field near Douglas, the Island’s capital and it was officially opened in November that year. Its first broadcast was on 91.2FM and was a test relay of the June TT race commentary. There were those who hoped it would develop into a highly profitable commercial station, broadcasting into the UK and Europe; those hopes were, however, rapidly dashed by the refusal of the UK to grant the necessary broadcasting licence. Ultimately, and reluctantly, it had to accept the role of being the Island’s national station, but running on an uncomfortable mixture of advertising revenue and subsidy from the Isle of Man Government which is still the case today. “When you look back over those 50 years it seems that Manx Radio faced a crossroads every decade with a series of reports on its future and the inevitable funding issue and little has changed,” says managing director Anthony Pugh, a former senior BBC executive who recently notched up 10 “stimulating and challenging years” as managing director of Manx Radio. “I think the people of the Isle of Man have taken Manx Radio to their hearts, there is immense loyalty from listeners and in a month one in seven of the population listens to the station at some stage and there is a very high percentage in times of crisis.” Middle-aged it may be, but Manx Radio shows no sign of settling down into a complacent broadcasting life and allow itself to wallow in nostalgia. It has kicked off its Golden Jubilee year by moving from the strapline of ‘The Sound of Your Life’ to ‘The Nation’s Station’.

41049_NPW_Dots_Agenda_190x137_Focus/Castles A TYPE DT 27/08/2013 11:37 Page 1

EITHER YOU SEE IT OR YOU DON’T O p p o r t u n i t y. I t ’ s n o t a l w a y s o b v i o u s , b u t w h e n y o u ’ r e a l w a y s l o o k i n g f o r i t , i t b e c o m e s p o s s i b l e t o f i n d . A t N e d b a n k P r i v a t e We a l t h w e v a l u e o p p o r t u n i t y a n d p u r s u e i t r e l e n t l e s s l y. I t ’ s h o w w e f i n d n e w a n d i n n o v a t i v e f i n a n c i a l s o l u t i o n s f o r y o u a n d y o u r m o n e y.

UNITED KINGDOM

ISLE OF MAN

JERSEY

U N I T E D A R A B E M I R AT E S

SOUTH AFRICA

Nedbank Private Wealth is a registered trade name of Nedbank Private Wealth Limited. Nedbank Private Wealth Limited is licensed by the Isle of Man Financial Supervision Commission. Registered office: St Mary’s Court 20 Hill Street Douglas Isle of Man.

www.nedbankprivatewealth.com

IN THE NEWS

Appleby advises Manx Telecom on AIM listing Appleby has acted for Manx Telecom PLC in connection with its recent flotation on the AIM market of the London Stock Exchange, raising £156m. Appleby corporate partner Simon Cain led the Isle of Man team, which included counsel Gill Crennell and associate Alexandra Watterson, and worked alongside Linklaters. The IPO, which was oversubscribed, provided a successful exit for Hg Capital and CPS Partners following their investment in 2010.

Equiom named in Private Client Practitioner’s Top 25 Most Admired UK Firms

Appleby banking partner and group head of corporate and commercial in the Isle of Man, Faye Moffett, led the team advising Manx Telecom on the refinancing of the group which was put in place for the transaction.

Equiom, the leading international trust and corporate services provider with offices in the Isle of Man, Jersey and Malta is delighted to announce that it has been named in Private Client Practitioner’s ‘Top 25 Most Admired UK Companies 2014’.

Simon Cain commented: “We are very pleased to have been involved in this flotation which marks a significant milestone in the continued growth of this well-established and essential Isle of Man business. Manx Telecom plays an important role in positioning the Isle of Man as a global centre of excellence for eBusiness and Appleby is pleased to have worked together with them to secure this future. The success of this substantial IPO is also a clear and timely demonstration of the faith placed in the underlying strength and the future prospects of the Manx economy by the City of London.”

Private Client Practitioner, a publication for leading private client professionals, introduced the rankings in order to celebrate the largest and most successful private client-centric advisory businesses. The list, which is published annually, includes leading law firms, accountancy practices, independent financial advisers and trust companies in the wealth management sector. Equiom’s Group Managing Director, Sheila Dean commented: “We are absolutely delighted to have once again been included in Private Client Practitioner’s ‘Top 25 Most Admired UK Companies 2014’.

Isle of Man has very successful ICE 2014 The e-Gaming team for the Department of Economic Development and representatives from the Isle of Man’s e-Gaming sector have reported an extremely high number of enquiries from potential new business showing serious interest following a highly successful ICE Totally Gaming event in London last week. Howard Quayle MHK, the Department’s Political Member with responsibility for e-Gaming, joined the Isle of Man delegation for part of the event. He commented: ‘Undoubtedly ICE 2014 has been a great success for the Isle of Man. From the hundreds of people who came to the stand and from experiencing first-hand the collaborative and partnership approach that Government and industry take, it is clear that the Island is a highly professional, respected key player in this industry. ‘It was also apparent from the visitors to the stand that I spoke with that many potential licensees were already favouring the Isle of Man over other jurisdictions and were looking at how to proceed to do business with us. ‘The broader e-Business sector, which includes e-Gaming, has grown very rapidly such that it now represents over 14% of the Isle of Man’s economy and directly employs over 1500 people. I am confident that the relationships developed at ICE 2014 will ultimately translate into new jobs and further economic benefit.

Peter Greenhill, CEO, e-Gaming, Department of Economic Development said: ‘The quality of the attendees at the Isle of Man stand surpassed all expectations. ‘At ICE we met senior representatives of diverse businesses seeking to relocate to the Island from all aspects of gaming ranging from potential licensees, software houses and software developers through to those with innovative, patented new ideas in standard sports book and casino models. ‘The Isle of Man already has 56 licensed e-gaming operators and my team is now working with around 15 businesses who are actively considering locating here. Our world class technology infrastructure, stable economy, internationally respected regulation and supportive Government were quoted as reasons why we were being chosen – and of course a cost effective operating base that welcomes new companies, their staff and their owners.’

FEATURE

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IN THE NEWS

Local firms helping Isle of Man students aim high Local firms from the Island’s aerospace and space sectors are helping to propel Manx students towards a future career in engineering by supporting their entry to a prestigious rocket-building competition. RLC Ronaldsway, Swagelok, SES, Cavendish Trust, Carrick Consulting and ManSat have each agreed to sponsor a team of secondary school students to participate in the UK Aerospace Youth Rocketry Challenge. This is the largest model rocket showcase in the UK and is run with the aim of inspiring students to enter the world of aerospace and science. Teams compete in regional heats with winners going through to a UK national competition.

Douglas Borough Council sets the 2014-2015 rate levy at 397p The new rate equates to a 0.5 per cent increase over the previous year; in real terms a rise of 4p per week for a typical three bedroom semi-detached house. At a special public meeting of the Council held on Wednesday January 29th Council leader Councillor David Christian presented a Budget he described as ‘affordable and confident’. Although the Island’s economic climate was less ‘sombre’ now Councillor Christian cautioned: ‘The Isle of Man is far from leaving its difficulties behind and the Council still faces much uncertainty over the future size and shape of its budgets, its services and its workforce.’ In his presentation he emphasised that over the past five years the Borough rate had been increased by just 12p in the pound, ‘At 3.1 per cent, well within Manx inflation of 21.5 per cent. In two of those years there was no increase at all,’ he added. The modest increase had been achieved, he said, ‘while government kept passing on increased costs estimated at more than £800,000 that, on its own, is a 30p in the pound increase which, if passed to the ratepayers, would have been a 7.8 per cent increase.’ And he reminded his fellow Members, of the Council’s ‘pattern of consistent capital investment over five years’ which, excluding housing, amounted to £10.2 million. Achieving savings was a central theme to Councillor Christian’s presentation. Through prudent financial management those savings had amounted to £2.9 million over the past five years, notably through efficiency measures limiting pay awards, not replacing some vacant posts and funding some capital investments through reserves.

The top prize in the Challenge is the opportunity to compete in an international fly-off at the world-famous Farnborough International Air Show against winning students from America and France, plus an all-expenses paid aerospace trip to Paris and Toulouse and a £1,000 cash prize for their school. The five Isle of Man teams – three from St Ninian’s High School and one each from Ballakermeen and Castle Rushen High Schools – are challenged to build a rocket that will safely launch and return to earth two raw hen’s eggs within strict height, time and weight conditions. The technical, teamwork and business demands of the task are designed to encourage the students to work together in the same way that aeronautical engineers and other space scientists are required to do.

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TELECOMS

Following the announcement that Sure has entered into an agreement with leading Chinese telecoms equipment supplier, Huawei Technologies, to build a new 4G network in the Isle of Man, island businesses can soon expect to use a mobile network that rivals landline technologies, says Andy Bridson, CEO at Sure Isle of Man.

One thing I am regularly asked is,

“What is 4G and what will it mean for my business?” To put it simply, 4G is the latest generation of mobile communications standards and follows on the heels of 3G, 2G and all the ‘bits’ in between such as 3.5G. The key development of 4G is a step change in performance of mobile data, both in a raw speed and the latency that customers will experience. LTE will give peak download speeds of over 100Mb/s, and for average speed should give a tenfold increase over what customers experience today. The 4G data experience will put mobile on a par with the very best landline networks and, as a result, will make mobile devices even more useful from a business perspective. These hugely increased data speeds make it possible to access all Internet services wherever you are. No longer will you have to find a Wi-Fi hotspot to watch a video whilst on the move. File-sharing will become much quicker, with data being transmitted in a blink of an eye, enabling businesses and individuals to keep in touch with each other in realtime. By making mobile an even more flexible and powerful tool, businesses are in an excellent position to further integrate

n y is ow a s ’ it

mobile technologies into their toolbox. This will only strengthen the Bring Your Own Device (BYOD) phenomenon, which is seeing companies move away from a centrally controlled hardware selection policy to a devolved system in which users make their own choices about which devices they want to use. There are likely to be users in most companies who already own 4G enabled devices but which currently can’t make use of their 4G capabilities. This will change later in the year when Sure launches its 4G network and, in the same way that Internet users are changing industries across the globe by demanding ever better Internet-enabled services, colleagues who own 4G devices will quickly want to see them used to their full potential on Sure’s 4G network.

Confidence to use 4G The real advantage for businesses using 4G services is not to be found in better quality video but in faster access to backend applications and data, all of which is protected by even greater security than is found on older technologies. This means you can allow 4G devices on your corporate network with confidence. When it comes to BYOD, having confidence in your network’s security is crucial. Traditionally, companies have sought to choose the types of devices allowed into their networks but BYOD has turned this way of working on its head. However, just because your colleagues are choosing the devices they wish to use, doesn’t mean that you have no control over them, the control has just changed in nature and is now about device and data management.

Sure has worked with the leaders in mobile device security and management to enable you to manage the influx of devices that you have to work with in the BYOD environment. A simple dashboardstyle console enables you to remote manage and if necessary wipe devices with any operating system, taking away the nervousness that many companies have when faced with BYOD for the first time. The advent of 4G is going to make business a truly mobile pursuit. Mobile data communications will be as fast, if not faster than landline technologies and most importantly for the Isle of Man, Sure is not only leading the way to 4G but is fully prepared to help the island’s businesses make the most of this transformative technology.

MANX BUDGET

MANX BUDGET in NUMBERS

The Isle of Man’s economy is the largest of the Crown Dependencies for the first time ever!

No.

4.3

A significant restructuring of government will save the Isle of Man £4.3m this year.

11,000 Total government spending in the Isle of Man equates to nearly £11,000 (£10,892) per person, according to Treasury figures.

8 14

The Isle of Man is quoted as being the 8th wealthiest nation on earth in terms of per capita GDP.

Personal allowances have been increased by 2% to £9,500 and £19,000 for jointly assessed couples.

350,000 Additional marketing fund of £350,000 for the ICT sector.

40.6 Infrastructure will see its budget for 2014-2015 cut by more than 10%, to £40.6m.

2020

Vision 2020 forecasts that the Isle of Man economy can grow from 3-4% each year up to 2020.

600

Since 2010, Treasury said 600 government posts had been cut - 8% of all staff.

3.9 Spending of Health and Social Care, with a £3.9m increase (2%), and the creation of a £2m fund to pay for any recommendations from the current review being carried out at Noble’s hospital.

Capital programme of £72m includes £50m for construction schemes, including £17m for local authority housing. Constuction spend up by £6m on last year.

111

Nursing Care Contribution payment increased from £110 to £111 per week.

5.6%

Economic Development £6.1m, (£6.4m in 2013 - down 5.6%)

In addition to the £1.5m of revenue savings announced last year a further £1m saving from general efficiencies.

Maximum income tax liability, the ‘tax cap’, remains at £120,000 but is changed to a five-year agreement with the taxpayer to update it.

Education and Children £96m, (£98.2m in 2013 - down 2.1%)

5.6%

Environment, Food and Agriculture - £14.7m, (£13.9m in 2013 - down 5.6%)

2.6%

Health and Social Care £190.8m, (£194.7m in 2013 - up 2%)

Home Affairs - £30m, (£29.2m in 2013 - down 2.6%)

10.9%

Means-testing of Child Benefit and a reduction of the Christmas bonus from £82.50 to £40 a year to control growing costs of universal benefits.

120,000

2.1%

1.2%

Infrastructure - £45.6m, (£40.6m in 2013 - down 10.9%)

Treasury £108m, (£106.7m in 2013 - down 1.2%)

TAXATION

UK Tax Surely not! The end of the 2013 / 14 tax year is fast approaching and thoughts will turn soon to tax return completion. But now might be a good time to review your tax affairs in their entirety. A point which is often missed by Isle of Man residents is the extent to which UK inheritance tax (‘IHT’) can impact, even if there is no connection with the UK, other than owning UK assets. Non-UK nationals are still exposed to IHT on UK situated assets which are held directly.

UK property and share portfolios are the most common examples of the types of asset that give rise to the exposure. Other assets may be exposed, depending upon their nature and whether any reliefs might be available. Avoiding the exposure is fairly straightforward, depending upon the type of asset. As a general rule, divesting of the assets or transferring them to an Isle of Man company eliminates the exposure. If divesting of the assets is not a realistic option, then transferring the assets to an Isle of Man company is standard advice if the assets are valuable. The IHT threshold is currently £325,000, and effectively £650,000 for a married couple if assets devolve to the surviving spouse on death. If the assets in question are more valuable, then there is a real exposure. A valuable share portfolio may not cause too many issues when it comes to a

transfer of ownership, but careful thought needs to be given in the case of UK real estate. First, the transfer to a company will attract Stamp Duty Land Tax (‘SDLT’). Planning to avoid this charge is ill-advised. The first question you might ask is whether the trade-off between the costs – the SDLT and initial and ongoing costs of company ownership – and the benefits warrants the transfer. The benefits need to be quantified. IHT exposure is the most obvious issue. The exposure is at 40% of the value in excess of £325,000, at current rates, or £650,000 for married couples if the assets pass to the surviving spouse on death. The other potential benefit is an income tax saving for investment properties. UK rents are subject to UK income tax at personal tax rates if property is held personally. If the rents are significant, this means the rates can be as high as 45%. Isle of Man companies, on the other hand, are taxed at a flat UK income tax rate of 20%. Even if the rents are not significant enough to attract the top rates of income tax, depending upon circumstances, it may be possible to reduce the tax liability through debt. Ultimately, this will depend upon the trade-off between UK and Manx tax liabilities if the transfer is selffinanced.

At Abacus, we offer a range of innovative ideas for effective tax planning and mitigation of tax liabilities for individuals, companies and trustees.

The Capital Gains Tax (‘CGT”) position has become slightly more complex in recent times. Commercial property causes no problems, but if the property is residential and not let to third parties, two changes introduced during 2013 may have an impact. These apply to property held by ‘non-natural persons’, the prime example of which is a company. The charges apply to property valued in excess of £2m: • An annual charge based upon the property value; and • A new capital gains tax charge, based upon the value at 5 April 2013. A new rate of SDLT (15%) on non-natural persons acquiring property valued in excess of £2m immediately preceded these changes. There is one further point to factor in. From 6 April 2015, the UK is introducing a new CGT charge on non-residents holding UK residential property. It is highly likely that it will apply to all non-residents, irrespective of the method of ownership – personal, company, partnership, trust, and so on – and that there will be an overlap with the 2013 provisions applicable to property valued in excess of £2m. Again, though, as for the changes in 2013, this charge will only apply to residential property. Commercial property escapes all of these new charges, including the punitive SDLT charge.

To discuss your individual tax requirements or to find out more information on how we can assist you, please contact: Andrew Cardwell, Tax Director Abacus Trust Company Limited 1st Floor, Sixty Circular Road, Douglas, Isle of Man, IM1 1AE, British Isles andrew.cardwell@abacusiom.com Tel: +44 1624 689614 Licensed by the Financial Supervision Commission of the Isle of Man

FEATURE - EQUITY

Private o Sinners

WORDS

MICHELLE P. TONNESEN

Few business have been more vilified over the last decade than the banking sector; but when a certain Mr Romney ran for US presidential candidate in 2012, the world’s scrutinising eyes were suddenly on the private equity industry. Now, what is the bone people have to pick with these guys – and what is it all about?

Here are the brief facts…Private equity is finance provided in return for an equity stake in potentially high growth companies. Instead of going to the stock market and selling shares to raise capital, private equity firms raise funds from institutional investors such as pension funds, insurance companies and high net worth individuals. Private equity firms generally take the shape of partnerships in which a group of managers use these funds, along with borrowed money and their own commercial acumen, to help build and invest in companies to nurture expansion, new product development, or restructuring of the company’s operations, management or ownership. The firms typically acquire companies and seek to increase their value over the course of several years in the hopes of realising a profit by selling them or through public stock offering. According to the British Private Equity & Venture Capital Association (BVCA), there are around 500 private equity funds managed in the UK. These currently back around 3,800 companies, employing approximately 1.2 million people across the world. The UK is the largest European centre for the management of private equity investments and funds.

Not only are a number of private equity funds located on the Isle of Man, as one would expect, but in fact a wide range of local companies are, or have at some point been, owned by private equity firms – from health and elderly care to transport and telecommunications businesses. Private equity is simply one method of corporate ownership alongside publicly traded companies. Now what’s wrong with that? In principle nothing – if you believe in capitalism, of course. Nevertheless, overall coverage of the industry has tended towards the extremes – either blasting the field for cutting jobs and killing workplace cultures, or defending it as vital to turning around ailing firms and boosting the economy in general. The bad reputation stems from the undeniable cases of aggressive, debtfuelled deals with the sole objective of turning around quick profits while spreading any losses to employees and other stakeholders in the companies they take over, thus generating high returns for its investors. Some critics argue that the nature of private equity nurtures a culture which normalises

Equity or Saints

value extraction and views companies as bundles of assets and liabilities to be traded, disregarding the inarguable fact that companies are made up of people too. But private equity funds do not all work like this. They can also buy companies and make real improvements to make them profitable and sustainable over the long run. Top private equity firms tend to have a performance culture in which everything possible is done to increase the value of the companies in which they invest. While horror stories exist, in some cases private equity takeovers can lead to healthy updates to management methods and practices. These can include improved alignment between business strategies and employee rewards, greater focus on key talent issues such as retention, and even a willingness to invest in hiring and higher pay. Thus, the growth of private equity can be seen to have made a big difference to not only the opportunities to sell a business, but also how to run a business. Like in all industries there are good guys and bad guys. The truth most likely lies somewhere in between these narratives. There are cases of private equity firms creating jobs – and

destroying jobs; of risky, high leverage deals – and low-geared ones too.

The general perception in the market seems to be that the field has moved past the time where slashing research budgets and skimping on customer service at acquired firms was the order of the day. That’s not to say that everything always runs smoothly these days with private equity deals. The future of private equity is one of the more intriguing questions for the corporate finance world. In the beginning, private equity returns were often exceptional. However, as the industry has matured and become more competitive, returns have settled down; indeed many private equity

groups have struggled during the recession. As these funds face a credit-constrained world, like every other company, they must adapt to thrive. Bain & Company’s Global Private Equity Report 2013 states that the industry faces an intensely competitive deal-making environment worldwide, and challenging fundraising conditions. Yet the prognosis isn’t entirely bleak. According to McKinsey, the sector’s strengths have come not from its use of leverage but from its ability to marshal resources, both human and financial; its strong incentives to adapt quickly; and its active ownership. The age of the megadeals may have vanished, but opportunities do exist. The winners will be firms which efficiently adjust to the harsher environment. At the end of the day, private equity is an investment strategy – not a political paradigm or regime. However, striking the right balance between value extraction and value creation in their investments will undoubtedly determine not only their future performance, but also the public’s opinion of the private equity funds.

BOUTIQUES

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a unique boutique R Sometimes it’s the little things in life that make the biggest difference

ecently named as one of the next generation of boutiques by Citywire’s Wealth Manager magazine, Creechurch Capital prides itself on remaining true to this philosophy’ taking a firm stand on capping its growth, so it is small, but perfectly formed. Creechurch Capital Limited is an awardwinning boutique DFM regulated by the Isle of Man Financial Supervision Commission. Since forming in 2010, it has opened associated offices in Manchester and London. The business is built around the needs of its clients as it uniquely blends investment expertise and personalised service to provide a luxury product to the standard its clients expect. The experienced team worked for large investment management companies but had the vision that a personalised, agile model would provide clients with what they need performance and service. This was fuelled by an unwavering passion to put clients’ interests ahead of the shareholder demands or constraints of a board that can come with larger organisations. From a standing start,

Creechurch Capital has experienced fast growth with a diversified client base across the globe. Creechurch Capital CEO, John Greenwood recognises the importance of a high-calibre team who share the business’ values; in a firm this size, each person’s contribution really matters. The team looked around the wealth management industry at how clients were being recognised and rewarded for their loyalty, and the experience they were receiving. Many clients were receiving bespoke rewards, but only in as far as they could choose how they wanted to be rewarded from a menu of options. The team felt that this still put clients into boxes and would never provide them with a service as individual as they are. Whether it’s a hotel, restaurant or clothes, the beauty of a boutique is that you can get something that little bit different and it is more personalised to you. In the same way, Creechurch Capital treats every client’s portfolio, starting with a blank piece of paper and the individual objectives, so the solution is a perfect fit.

Other beautiful boutiques… John Greenwood gives his pick of the best boutiques he’s come across on his travels…

The Left Shoe Company is a handcrafted bespoke shoe company.

Wild at Heart - at Liberty is a boutique and imaginative florist

The shop, which has outlets across the world, will make an individual pair of shoes using 3D scanning technology.

Beautiful flowers can completely transform any space, and since 1994 Wild at Heart has brought seasonal inspiration to offices, restaurants, hotels and private homes. The team works with great names from the fashion, media, business and hospitality industries, with a huge variety of styles and budgets.

The total appearance and character of a shoe can be personalised for you by selecting subtle details such as choice of calf, suede, grain leather, colour, width of instep and welt or thickness and material of sole. LSC London Store • 6 Princes Arcade • St James’s • London • SW1Y 6DS

www.leftshoecompany.com

From single arrangements to dramatic architectural displays, customers are assigned a dedicated florist to design, install and maintain flowers.

www.wildatheart.com

Standard Bank Kicks Off 2014 eGaming Social Calendar

AGENDA

A-LIST EVENTS

Over 75 guests joined Standard Bank on Thursday 23rd January to celebrate the first of the yearâ&#x20AC;&#x2122;s eClub parties. Held at Bar George in Douglas, the pre-ICE expo gathering featured South African wines provided by Standard Bank, with nibbles provided by event co-founders Continent 8 Technologies. To kick off the night, guests were also treated to a rousing and well-received live music session from local outfit The Chris Winchester Band. The eClub is a social meeting place for anyone involved in eGaming on the Isle of Man or those with an interest in the sector. As well as providing a social venue, the eClub party also gives colleagues and friends the opportunity to chat informally about ideas and issues within eGaming on the Island. For more information, follow us on www.facebook.com/IsleofManeClub or join the Isle of Man eClub Group on LinkedIn.

APPOINTMENTS

MANX TELECOM APPOINTS NEW SALES MANAGER Manx Telecom has appointed Anne Lemonofides as a Sales Manager for its Chameleon product portfolio. Chameleon is the brand name for the company’s suite of UK focussed smart SIM solutions aimed at M2M (Machine To Machine) and SSM (Strongest Signal Mobile) partners. Chameleon is already the mobile product of choice for a wide range of connection critical markets including providing protection for remote workers, remotely monitoring systems, or improving business efficiency. It offers the flexibility to roam on any network, but provides a more cost-effective option when compared to traditional roaming solutions. Choosing Chameleon also gives Manx Telecom’s partners access to an innovative management portal which allows greater control of their service than a traditional UK network operator would provide. Anne will be based in the UK and work alongside Paul Craig who is also a Chameleon Sales Manager. The Chameleon team is completed by Isle of Man-based Product Manager Sarah Creighton and Account Manager Suzanne Mealin. Prior to joining Manx Telecom Anne Lemonofides worked for Vodafone and she has more than 20 years’ experience working in the IT and telecoms industries. This includes several senior roles in account management, business development and sales, and she has worked for Vodafone, Orange, Mitel, and Dimension Data.

SKANCO APPOINTS DEE MCLOUGHLIN AS BUSINESS DEVELOPMENT MANAGER Professional IT services company Skanco Business Systems Ltd is seeking to expand its business in the Isle of Man with the appointment of Dee McLoughlin as business development manager. Over the last five years as a sales account manager at Skanco, Dee has managed and developed some of its top accounts, focussing on driving new projects through and introducing new products to the Island’s businesses. Managing director David Butterworth said “With the Island’s economy continuing to grow, we’re looking to increase business and we see Dee as a crucial part of this. During her time at Skanco, Dee has proven to be a key asset to the company and we’re delighted that she has taken on the challenge of this new role.” The position will see Dee build on her experience, proactively focusing on new business development within both Skanco’s existing customer base and new businesses on the Island. Dee said “I’m thrilled to be given the opportunity to develop new business for the company and am very excited to be working alongside such a strong and dedicated team.” Graduating from Sheffield Hallam University with a Sports Science degree, Dee began her career as a trainee recruitment consultant in Leeds, focusing on new business generation. Over the six years with the ATA Group PLC, she worked her way up to running the Manchester team.

LEON TAKES THE REINS IN LATIN AMERICA FOR RL360° RL360° has appointed a new key member of staff as the company forges ahead with plans to expand into the Latin American market. Leon Sears has taken on the role of Regional Sales Manager, Latin America and will get to work immediately on shaping RL360°’s future in the region. Leon has a solid foundation of contacts he can call upon, having worked on Latin American accounts for the major part of his career. “It’s a really exciting time for me personally and for the company,” said Leon. “I believe there’s a lot of potential in Latin America. It is still a young market compared with various others around the world but it’s a very profitable, fruitful market. “I think we are getting to the stage where the economies of the various countries are doing very well and outperforming developed markets. It’s time for people to stand up and take notice.” Born in Flint, North Wales, Leon moved to the Isle of Man when he was 11 and attended Park Road and St Ninian’s High School. After toying with a career in computer programming, a period of sales work during his gap year changed his mind. Leon began work in sales support at Friends Provident in 2003 and worked his way up to a field sales role. At the end of 2010 he took on full responsibility for field sales in Latin America and travelled regularly to the region.

PWC ISLE OF MAN STRENGTHENS ITS MANAGEMENT TEAM PwC Isle of Man has announced that three of their long standing professionals have been promoted due to growth within the firm. Wendy Jessup has been promoted to Senior Manager in the assurance department. Wendy joined PwC Isle of Man in 2003 and qualified in 2006. In 2008 she then undertook a secondment to PwC London’s technical team where she advised on complex financial reporting matters. She returned to the Isle of Man in 2011 and has further developed her technical role including speaking at a number of high profile local events. Johann Marais has been promoted to Senior Manager in the actuarial department. Johann heads up PwC’s Isle of Man actuarial team and his promotion will allow him to develop his extensive experience and knowledge of the Isle of Man insurance and pension industries. Tracy McAvoy has been promoted to manager in the assurance department. Tracy’s promotion will enable her to build on her wealth of knowledge across the financial sectors within the Island. Ian Clague, Senior Partner at PwC Isle of Man said: “We are proud to congratulate these outstanding professionals, who each demonstrate real-life examples of what it means to be a leader at PwC. They have already proven their ability to adapt to new challenges, to provide distinguished client service and to nurture the careers of those around them.”

APPLEBY APPOINTS NEW LOCAL GROUP HEAD IN THE ISLE OF MAN Appleby is pleased to announce that Partner, Faye Moffett, a leading banking and finance practitioner, has been appointed as Head of the Corporate and Commercial Practice Group in the Isle of Man. The appointment is effective 1 February 2014. Faye, who also leads the Banking & Asset Finance team in the Isle of Man, will be responsible for leading the largest corporate and commercial team on the island which comprises four partners and 16 associates. A qualified Isle of Man advocate, Faye joined Appleby in 2004 as an associate before becoming a partner in February 2006. She specialises in banking and finance transactions, including property finance, aircraft and ship finance matters. She has particular experience in providing opinions on Isle of Man companies and on cross-border security and insolvency issues and has been recognised as a ‘Leader in her Field’ by Chambers UK, The Legal 500 UK and PLC Which Lawyer. Sean Dowling, Managing Partner of Appleby (Isle of Man) LLC commented “Faye is taking over the responsibility of leading the Isle of Man Corporate and Commercial group from Nick Verardi. I would like to take the opportunity to thank Nick for his enormous contribution to the success and growth of Appleby to date. Whilst it is sad to see good friends leave, Nick does so with our warmest wishes.”

PWC ISLE OF MAN WELCOME NEW DIRECTOR TO THEIR ADVISORY TEAM Former Deloitte partner Steve Billinghurst has joined PwC’s advisory team. Steve has worked in the offshore environment for 13 years in Jersey and more recently since 2009 here in the Isle of Man. During that time, Steve’s audit and business advisory experience covered many industries, such as financial services - banking, fiduciary, funds (private equity and vanilla), egaming, property and commercial - retail, manufacture and distribution. Steve has also provided to his clients corporate finance transaction services including the preparation of information memoranda, working capital reports, financial assistance reports and pre acquisition due diligence reports. Steve’s broad range of industry knowledge acquired offshore and onshore will frame his role at PwC which will be to help develop the advisory practice with a particular focus on data and systems assurance for ‘data rich’ business, internal audit and transaction services. Commenting on Steve’s appointment, senior partner Ian Clague said: “I see Steve as a fantastic addition to our team. His broad range of experience complements Mike and Gordon’s insolvency and restructuring background and means we have a combined service proposition that is second to none.” Steve commented: “It is great to be back in the profession and I am looking forward in this new role to helping clients create added value through the provision of PwC’s advisory services.”

SOMETHING

(OR SOMEONE)

IS MISSING

WE ARE LOOKING FOR THE FOLLOWING ROLES TO JOIN OUR LITTLE TEAM

GRAPHIC DESIGNER PUBLICATIONS

SALES/CLIENT ACCOUNT MANAGER

We require a Graphic Designer to join us in creating all things Gallery. Ideally you have experience from a similar role. If youâ&#x20AC;&#x2122;re just starting out you will need to be proficient in Photoshop, Illustrator and InDesign. Most of all you will need to be creative, quick and not be afraid of deadlines. FULL TIME /FREELANCE

We are looking for an experienced media sales professional who thrives on developing and selling in marketing and media packages for clients and projects development. Ideally you will be a keen writer, The right person would feel comfortable as the face for Gallery at parties, events and functions. FULL TIME /PART TIME

JOBS@GALLERY.CO.IM

FEATURE FEATURE ARTICLE WORDS

LISA JONES

Apps for Unfocused Minds What do the men and women who govern us do all day? They sit in front of their screens and gawp at Twitter, Facebook, Gmail, YouTube, Amazon, eBay, Flickr and TripAdvisor. A list released last year of the websites most visited by British MPs reveals that what they get up to at work makes them no different to the rest of the population: they cyberloaf.

Even the young bankers who work such long hours that their employers have started banning them from coming to the office for the entire weekend seem to do more loafing than lending. At a recent conference I heard the heads of HR at two top investment banks complaining that data from these bankers’ computers show that less than half of their time in the office was spent on work. A study from Kansas State University backs this up: the average US worker spends 60-80 per cent of their time online at work doing things that are quite unrelated to their jobs. David Ryan Polgar, a US pundit and lawyer, has come up with a metaphor to describe our new affliction. He says we are getting mentally obese: we binge on junk information, with the result that our brains become so sluggish they are good for nothing except more bingeing. The obvious answer is to go on a crash diet, reducing the amount of junk information we consume. Having tried – and failed – over the past couple of years to resist the temptation of Twitter through mere willpower, I’m in search of something stronger. Various readers and colleagues have pointed me towards the hundreds of apps that are supposed to help with the addiction, but until now I have resisted on the grounds that the answer to technology overload surely cannot be still more technology. Now recognising myself as mentally obese, I have decided to give them a go. The target is simple: to maximise work done in the office and minimise time spent looking at pictures on Twitter of people carrying dogs in baby slings. I don’t want to go cold turkey on cyberloafing, as tests have shown that in small quantities it perks you up. I just want to learn moderation. To this end I started 2014 by downloading five apps: Workrave, Rescue Time, Nanny for Google Chrome, Focus Booster and Remember The Milk. The initial result was disappointing. The computer wouldn’t sync to my BlackBerry and I kept forgetting the login details for the different sites. Worse still, a whole new way of being unproductive opened up to me: I started obsessively checking my progress on the productivity apps.

Nanny for Google Chrome The first one I tried was Nanny for Google Chrome – which does for information what the Atkins or the Dukan diet did for food, by outlawing or restricting certain websites. My own Bermuda triangle of productivity is Twitter, email and eBay, and so I told the app to allow me respectively 15, 30 and five minutes on each. Alas such limits were broken almost at once, causing a

message to flash up that said in huge, shouty type: “Shouldn’t you be working? The site you are attempting to access has been blocked by Chrome Nanny.” My wrist thus slapped, I became at once a bolshie teenager. How dare my computer tell me what to do? After some searching, I found a button to disable it, which I clicked with glee. Twitter seemed more tempting than ever.

Workrave The next kind of information diet works by getting you off the screen altogether. Workrave is a bit like the 5:2 diet – which forces you to fast two days a week. It features a cute little lightbulb with a smiley face that warns: “Time for a micro-break”, followed by increasingly shrill and distracting warnings, culminating in the whole system freezing up so you have to take a break, like it or not. This is maddening, especially when it happens at the very moment you had finally stopped skiving and were getting down to some work.

Remember The Milk Having decided that apps which rely on stick were not my thing, I turned to those that use carrot. Remember The Milk is a glorified system of online lists, which invites you to write down everything you want to get done and set a deadline. When you have done them you tick them off, and send bragging tweets about how well you are doing. Remember The Milk is a relatively sound concept, though not as sound as writing a list on a piece of paper – which requires no password or logging on, and the action of crossing something off a list with a pencil is much more satisfying than clicking a box on the computer. A list has the even bigger advantage that you cannot automatically shower your followers with junk tweets that say: “I completed 2,401 tasks with @ rememberthemilk in 2013.”

Rescue Time More promising is Rescue Time, which is the Weight Watchers of information diets. It is a data-gathering system with targets, which monitors everything you do on the computer and displays the results on a pretty dashboard. A “productivity pulse” records how hard you work at different times during the day, and how well you are doing compared with your targets and with previous days’ performance. Thus I discover that I am unproductive in the early afternoon – which I knew anyway – and that today I did better than yesterday, which I also

knew already. The app encourages you to spend too long poring over the data, which is not terribly productive. Also, the data show if I am emailing, but do not know whether I am doing productive emailing or gossiping with a friend.

Focus Booster Having rejected four diets, I have at last found one that works for me. Focus Booster is beautifully simple and involves neither stick nor carrot. It is a little timer that sits at the top of the screen and runs for 25 minutes, after which you can take a five minute break. You press start, and a line slowly advances across the screen reminding you that during that time you should be focusing. Even I can concentrate for 25 minutes, and for some reason I cannot explain I have not cheated once. Strange though it seems, my cyber skiving problem appears to be miraculously solved.

…However, it is early days, and miracle diets tend not to work for long; in time I may slip backwards and start gaining mental flab again. Mr Polgar warns that curing mental obesity is tougher than physical obesity because you cannot tell how you are doing by looking in the mirror. Yet he says technology will soon make this easier. Various wearable products – including a headband called Melon – are about to come to market that measure brain waves and display the data on your screen, telling you when your brain has got so torpid from excessive YouTubing that action is needed. Possibly that will make a difference. Yet I suspect a better answer lies not with technology but with people. A highly efficient young acquaintance tells me that neither apps nor alarms on her phone are powerful enough to make her stop work at 6.30pm. The only thing that succeeds is a call from the woman she uses as her occasional personal assistant. It does not matter that she has paid the woman to phone her; it is the sound of a human voice that makes the difference. Equally, when I told a friend that Focus Booster was changing my life, she looked unmoved. With a boss who was forever looking over her shoulder, the need for an app to keep her mentally fit was zero.

TRAVELL IN G

A OM R F

TO B

s s e n i s s u p B l Ti e v a r T 1. Pack the night before to give yourself time to recheck that you have everything.

As International Sales Director for RL360°, Simon Pack is a seasoned traveller. Here, he offers his top 10 tips for making getting from A to B that little bit easier:

2. Go through a mental check list to make sure you have all of your work clothes if travelling at weekends – cuff links, ties etc. 3. Do you have the right adaptors for the countries you are visiting? South Africa is different than most others worldwide. 4. Ensure all electronic gadgets, phones etc. are fully charged before you leave home. 5. When booking hotels ensure they have free WiFi. 6. Leave early for the airport, the worst case scenario is you have to sit around for a few hours – travel stress free. 7. Know where the airport lounges are and, if you are a frequent traveller, buy a Priority Pass. 8. Set your watch to the time of the country you are travelling to before you depart. 9. Aim to sleep on the plane based on the time you are travelling to and not just when you are tired. 10. Ignore all health warnings and enjoy the wine – it’s free!

Business Travel Gadgets Whether you’re on a road trip or heading on a long-haul, transatlantic flight, you’ll need these essential gadgets to keep you connected, productive, organised, and entertained.

Grid-it (organisation system) World travelers often have an assortment of gadgets that can fling around by unruly airport baggage handlers, or simply filter through your clothes in your luggage -- but no longer. Grid-it is a simple organisation system made up of dozens of elastic bands that hold devices firmly to the inside case. It’s slim and features a rear zippered pocket for more storage.

Travelon luggage tags (organisation)

Kensington AbsolutePower (power accessory)

One of the many pet peeves to air travelers is finding luggage as it rolls along the pick-up belt. With a unique-looking travel tag, it’s far easier to see your bag as it rolls along the conveyer belt. These tags are bright and colorful, and will save valuable time when you’re heading out to your final destination.

Universal plug adapters (power accessory) If you’re traveling to a different country, you’ll need a number of plug adapters so that any power cords you bring with you so you can plug-and-play instantly. If you know the country you are going to, buy at least two so that your laptop and phone can receive simultaneous charging.

Innergie PocketCell (phone battery pack) With more power accessories, high-end smartphone users will know full and well that modern day devices, despite their glitz and feature-set, may not last the full day. This pocket-sized power accessory will keep your smartphone powered up all day, with fast charging capability and a “magic cable” for the three most common devices out on the market, including micro-USB, mini-USB, and the 30-pin iPhone connector.

Power is one of the key things that many forget when traveling long haul. This accessory keeps your devices, including laptops and USBpowered devices charged with up to 100 watts of power. It’s small, light, and comes in a range of detachable adapters that can power up a range of devices, including iPhones and other smartphones, and almost every kind of laptop on the market.

EatSmart Precision Voyager

(luggage scales)

Whether you’re popping across for a quick-trip or making a long-haul flight, most come back with a few gifts or additional items. Make sure you don’t bump your luggage weight limits with one of these compact, lightweight (crucially!) and accurate luggage scales to make sure you fall within airline guidelines.

Kensington KeyFolio Pro 2 (tablet keyboard accessory)

As many travelers are swapping their bulky, heavy laptops for tablets, one of the main disadvantages is access to a keyboard. Kensington’s KeyFolio is a universal removable keyboard for the most common 10inch devices, and compatible with most Android devices. Powered by Bluetooth, it includes a stand to secure your tablet at the perfect angle.

Brookstone HDMI pocket-sized projector (pocket projector) This pocket projector is perfect for presentation on the fly. It cranks out 1080p highdefinition video up to 60-inches diagonally, and connects all HDMI-based devices. It can run for up to two hours on a single charge, and includes dual built-in speakers. All this, and it fits in the palm of your hand, or even in your pocket. (And, if you want to crank it out to play games from your smartphone in your hotel room, we won’t tell anyone.) 31

Navigating complex networks? Let us do it for you. Contact our account managers at business@sure.com to talk about how we can help you improve your network performance, reduce costs and eliminate headaches.

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