Helping retirees broaden horizons

Thailand's international fame as a tourism destination has also drawn a large number of foreign retirees whose special needs include managing their finances well.

Among the companies filling this niche is Global Investments (Far East) Limited, whose chief executive Neil Robbirt first came to Thailand in 1993 after being transferred here by the large brokerage in Hong Kong. The next year he decided to strike out on his own and form his investment company. Today most of the company's business involves retirees and surprisingly, this category starts around age 40.

''So although they're not eligible for retirement visas _ some of them because they're not 50 yet _ but because they have invested a certain amount of money in Thailand and some are Elite Card holders, they have certain benefits,'' Mr Robbirt explains.

''These people have a lot of money, they're no longer working and what they need from Global is for us to manage their money. They need income.''

While Global's retiree clients target an annual income of anywhere between 5% and 10% of their holdings, at the moment the company is achieving returns of around 12-14% net, he said.

''They don't want to take all their interest, they want to allow for inflation and other things. Others don't have the luxury of being able to do that, so for example if they have 500,000 and that is all the money they have, they want us to provide 50,000 a year in interest.''

Among the investment options the company offers is a multi-currency product that invests in Australian mortgage-backed securities secured by commercial property and hedged by an Australian bank. Its multi-currency nature means investments can be made in Thai baht and while Global does not deal with the local market it does have some Thai clients working overseas. With a minimum investment of US$50,000, the fixed rate of return is 8.32% for 12 months.

Some of the company's clients do invest in Thailand but through external funds such as Fidelity Thailand. ''So our clients can buy Thailand but they buy in US dollar funds, they are not buying direct from the SET because we are not local, we are not stockbrokers, we are advisers,'' says Mr Robbirt.

Global's clients, in Thailand or elsewhere, also have the option of investing through a general equities fund called Alliance Global Investors Thailand, which has been returning nearly 10% annualised in the last three months.

''It isn't bad, but if you take the last 12 months it's actually down 7.13%, because the Thai equities market has been quite turbulent,'' he said. ''But in the last three months it has done quite well, so if you invested in January this year you would be showing very positive gains but if you invested in June last year you wouldn't.''

Retirees' viewpoints vary with some wanting to invest in anything in the Asia Pacific region including Thailand, Taiwan, Korea and China, while others are keener on emerging European markets such as Hungary and the Czech Republic where property is very strong tight now.

''The beauty of what we have is that as we represent many different companies, we are not tied to one. If we have a client who wants to buy into a property fund in Poland, we can find that fund.''

However, westerners who live in Asia and understand its markets see opportunity for growth, which Mr Robbirt says can be very dynamic _ or very negative. ''They also see the incredible rise in property values, so we do get involved in some property funds that invest in property projects in Thailand.''

One such fund that Mr Robbirt offered to a client last year invested in a luxury development outside Pattaya called Ocean's Edge. It consists of 32 exclusive penthouse-style apartments with infinity pools developed by an Australian team. Prices start at 27 million baht.

Asked by the developers to suggest an investment method, Mr Robbirt suggested that shares be sold to investors and that is how it was carried out. ''They worked out that they would be willing to give a percentage of the project to private shareholders but one share was five million baht. I said I thought that was too much, so how about selling half a share for 2.5 million baht, which is what actually happened.''

Prices have jumped even though construction has yet to start, and Mr Robbirt sees investors looking at 100% returns.

However, he mostly advises his retired clients not to buy property in Thailand because rental rates are relatively low and they can use their capital elsewhere to generate up to 8% a year. This also makes it easier for them to move if they want to.

''If you can rent a small house in Hua Hin or Pattaya for 20,000 baht a month, why do you want to buy it when the only money you have is your small lump sum? You need to get interest to live.

''That doesn't mean to say my clients don't buy property, in fact a very high percentage do buy property in Thailand because they've decided they're going to live here long term, but they're not buying big properties, they're just buying somewhere to live.''

Among the companies Global represents is Zurich International which is based in the Isle of Man and offers a product called portfolio bond or ''international wealth account''. Under the Isle of Man Investor Protection Act, in the unlikely event of Zurich failing, 90% of the clients' money including growth will be paid back by the government.

As Global's reach is truly global and involves a wide range of currencies, Mr Robbirt has a good perspective of the foreign exchange market.

''I think the dollar has strengthened marginally and I think in the medium term the dollar will probably strengthen a little bit, not weaken anymore. But I can't see the Thai baht becoming stronger in the next six months. If anything the baht is likely to weaken internally because of the political and economic turmoil.''
Bangkok Post