1• Special Situations • Corporate Advisory • Real Estate • Trust & Fiduciary •• Property Services • Relocation • Education Advisory • Yachting Services •

Foreword As 2015 draws to a close, I wanted to take the opportunity to share with you some key highlights and to thank you for your continued support.

Across the Group we have been involved in some significant transactions, as well as forged strong, new relationships with partners and clients. Of note, was the launch of a new housing company, Funding Affordable Homes, which is based on a new private sector model that allows for investment into affordable housing schemes. Lord David Triesman discusses his view on how the company is addressing the UK’s housing crisis.

In January, OneOcean Port Vell, a leading superyacht marina in Barcelona relaunched following a $100m investment. It is one of our most significant direct investments, and Luc Khaldoun outlines his round-up of the past year’s developments in the global superyacht industry.

London continues to dominate international real estate capital and our advisory work in both commercial property and residential sales and management continues apace. Ian Griffiths and Craig Hallam provide their comment in the ‘In Focus’ section and the London Residential Property Market review.

As ever, the need for greater transparency and regulation, and significant tax changes continue to shape the Trust & Fiduciary industry and our team outlines what lies ahead for trustees in 2016 on p.4.

Given the changing global risk landscape, we took the decision that independence for our Risk subsidiary, S-RM was the right outcome for that business and in November we announced a management buyout with the support of XL Catlin as a minority investor. This now allows us to focus on our core strengths of advisory and investment, alongside our award-winning, international Trust & Fiduciary business and dedicated Private Office services.

I wish you a happy holiday season and we look forward to continuing our relationship with you in 2016.

Martin BellamyChairman and CEO

Private Office NewsletterEdition 4, December 2015

In Focus: Real Estate Advisory – Commercial Property, LondonRead article on page 3

Trust & Fiduciary – The Year AheadRead article on page 4

London Residential Property Market ReviewRead article on page 6

Salamanca Group Leads On Housing CrisisRead article on page 2

The Yacht Industry – A Growing Asset ClassRead article on page 5

2 3• Special Situations • Corporate Advisory • Real Estate • Trust & Fiduciary •• Property Services • Relocation • Education Advisory • Yachting Services •

• Special Situations • Corporate Advisory • Real Estate • Trust & Fiduciary • • Property Services • Relocation • Education Advisory • Yachting Services •

“London continues to dominate international real estate capital, and we apply our in-depth local knowledge of this market to assist investors from across the world to seek the right assets in a highly competitive environment,” says Ian Griffiths.

former chair of the National Housing Federation and Peabody, and has Debbie Ounsted on the board, the former chair of the Joseph Rowntree Housing Trust and now Master of the City of London’s Mercers Company. Andrew Dawber, Head of Corporate Advisory at Salamanca Group, formerly launched the first listed social infrastructure fund in the UK. I have the privilege of serving on the board and chaired the UK’s Inquiry into Housing Benefit. As a team we bring strong commercial discipline and a sense of what creates social change for the better.

A further round of Fund raising will be launched in 2016 which we believe will be attractive to professional investors. Additionally we are getting enquiries about whether we could export the model to other countries, a few of which have comparable difficulties.And that is where the future of social housing lies. Less wishful thinking by politicians and more rigour from people who know about real estate and social growth. Less taking postures; more delivery of valuable outcomes.

I am delighted to have received invitations to talk at impact investing conferences and seminars, sometimes organised by the philanthropic sector although our scheme is not philanthropy. It provides a chance to show some of the new thinking in FAH, thinking we anticipate providing for the social housing inquiry starting in the Economic Affair Standing Committee in the UK parliament’s House of Lords.

The worst kept secret in the UK is our chronic shortage of lower rent housing especially in London. Every political party has now said it will grasp the nettle but as ever the real question is: how? Not only do lower-income families need decent homes and security of tenure, but they also provide the workforce we all rely on in health, schools, policing and most public services. A modern society depends on a population mix able to sustain the whole body of people.Salamanca Group has emerged as a key actor in providing at least part of the solution.

First, what is the scale of the problem? Broadly, two million families are on the waiting list for homes – that is about four million people. In recent years, the UK has built about 40,000 affordable homes each year so, as night follows day, the problem is getting worse. The consequences are serious for homeless families. For example, in Tottenham in North London, primary schools start each school year with 30 children in each class.

Only ten of those kids are the same children at the end of the school year which tells a grim story about

their prospects or the stability of the school. The reason is not the quality of the schools which are usually well-regarded. It is the churn in the housing those children share with their families; they are always on the move from one dwelling to another. They move school, doctor and sometimes the family breaks up.So the problem is about the homes and a raft of social problems that are nurtured by instability.

Salamanca Group has launched a new housing company, Funding Affordable Homes (FAH), based on a new private sector model to boost provision which evidently cannot be met in the public sector. It has brought together equity funders from across the world, individuals and institutions, to invest in affordable housing schemes. We use data from a leading housing charity to prove social change is genuinely being achieved.

The key innovation is that FAH will own the properties by forward funding new development or sometimes buying built homes to realise capital for new homes. The tenants will still receive their services from the housing association or local authority and in both cases there is good evidence of good services. They, however, demonstrably cannot raise enough development capital themselves. The service providers though, on long-term contracts, will pass on to FAH as the property owner a proportion of the rents; and

the rents are mostly regulated. So there is no need for the PropCo to be the OpCo.

In brief, the injection of private sector know-how and a change in traditional patterns of ownership are game-changers. FAH will boost the numbers of homes built and the investment available against the security of owning the property and showing a line of returns to investors comparable with the best long-term annuity types of investment.

And it reflects a chance to make a difference which reflects huge public credit on investors. It enjoys the combination of sound investment and ‘corporate social responsibility’ and individual values.

The first investments have been made or are agreed. The schemes include specialised housing in Luton for young people who can now expect to hold down a job and community care projects in Essex. Several London projects are in focus. In each case, alongside providing good homes to people who are often in Bed and Breakfast and constantly on the move, we can track the route for them into stable employment or the quality of care which keeps older people active and healthy. It is among these kinds of group that central government support for rent payments makes great sense. It is expenditure which mitigates the need for higher expenditure on other social services.

One of the reasons we have experienced investor and housing association confidence lies in the quality of the leadership. FAH is chaired by Richard McCarthy,

Salamanca Group Leads On Housing Crisis

In Focus: Real Estate Advisory – Commercial Property, London

By Lord David Triesman, Director

By Ian Griffiths, Head of Real Estate

“Broadly, two million families are on the waiting list for homes – that is about four million people.“

“FAH will boost the numbers of homes built and the investment available against the security of owning the property and showing a line of returns to investors comparable with the best long-term annuity types of investment. “

Salamanca Group acted as the exclusive real estate and financing advisor to UK Span Property Ltd, a private South African investment company on the acquisition of 2 Park Street in the heart of London’s Mayfair for £74 million. 2 Park Street is a high specification, multi-let office building constructed in 2000 and totalling 50,300 sq.ft. The Real Estate team is retained as the strategic advisor providing the asset management capability for this investment.

4 5• Special Situations • Corporate Advisory • Real Estate • Trust & Fiduciary •• Property Services • Relocation • Education Advisory • Yachting Services •

• Special Situations • Corporate Advisory • Real Estate • Trust & Fiduciary • • Property Services • Relocation • Education Advisory • Yachting Services •

The Yacht Industry – A Growing Asset Class

By Luc Khaldoun, Head of Client Advisory, OneOcean Ventures

By Paul Douglas, Managing Director and Michael Giraud, Head of New Business Development, Trust & Fiduciary

The global superyacht fleet is growing in terms of number, average size and number of vessels over 90m. The total fleet was 4,988 as of end of 2014 and is expected to reach 6,044 by 2020 (according to Superyacht Intelligence).

The charter market has seen a buoyed recovery in recent years, benefiting from the increasing superyacht fleet and financial markets recovery. All charter yachts were fully booked from the beginning of the 2015 season, with prices becoming firmer.

The sales market has matured. We are now seeing a return to pre-2008 trends where new clients are entering the market on a larger scale, as well as a return to new build options. Whilst the upper end of the superyacht market is experiencing strong growth, with a record 23 yachts over 100m in build stage today, the majority of sales still occur in the 35m-50m segment of the market.

As access to and visibility within the superyacht market has improved, we have seen some evidence of increasing numbers of 75m+ clientele going direct to the shipyards with their orders, which in turn has ensured that the advisers’ role has changed and must be adding value to any purchase decision. It is a complex process that needs careful management from construction through to delivery and then ensuring technical efficiency and financial control once the yacht takes to the water. We believe the results of using a professional consultant are invaluable; applying our experience and in-depth knowledge of the market has resulted in us working with a number of clients incorporating all these aspects as an Owner Representative.For all your yachting projects, please do get in touch. We would be delighted to give you our expert advice, be it sales or charter related.

As trustees we are becoming increasingly busy and, on an annual basis, need to undertake various activities to ensure we not only comprehensively administer the structures for which we are responsible but also comply with the increasingly onerous burden of the ever changing global regulatory and tax environment.

Therefore, in addition to family meetings, administrative reviews, preparation of annual accounts, detailed bookkeeping, investment monitoring and general maintenance of the structure, what else lies ahead for trustees in 2016?

Every reader will have noticed the global trend for increased regulation across financial services and the significant recent tax changes which have been implemented across a wide number of jurisdictions. Particular changes that will need to be addressed during the year ahead include:

US FATCAThe implementation of FATCA has been a costly and time consuming exercise for all fiduciaries. With the first filings being completed in 2015 we now have ongoing reporting obligations under the Inter-governmental Agreements (IGAs) between the US and the

jurisdictions in which we have trust presences or investments.

Common Reporting Standard (CRS)The OECD CRS draws heavily upon US FATCA and is intended to be the global standard for the automatic exchange of information relating to financial accounts. It is a continuation in the global effort to stamp out tax evasion. All three of the jurisdictions where we have a trust presence have signed up for CRS with Jersey and Mauritius, as early adopters, intending to exchange information from September 2017 and Switzerland intending to exchange information a year later from September 2018. Systems and procedures are being implemented and substantial resources devoted to ensure that as a financial institution we are well positioned to comply with our reporting obligations.

UK FATCAThis is based on US FATCA and applies to the UK’s Crown

Dependencies and Overseas Territories. Reporting for 2014 and 2015 takes place in June 2016. UK reporting will be made within the CRS regime from 2017 onwards and the reporting when the Jersey-UK FACTA IGA will lapse. Register Of Beneficial InterestsIn recent years, the EU has been discussing the implementation of a register of beneficial ownership of trusts as part of the EU Fourth Anti-Money Laundering Directive. No clear consensus exists within the EU in this regard, but fiduciaries, and finance centres generally, are closely monitoring affairs to petition against aspects of the EU proposal. 2016 will see the introduction of a publicly accessible register of beneficial ownership for UK-incorporated companies and the UK Government has signalled an intention to establish a register for Trusts governed under UK law. A number of finance centres, such as Jersey, have had directories recording details of beneficial ownership for companies for a number of years. Law enforcement and tax authorities are also able to obtain information on the beneficial ownership of trusts for AML purposes, where appropriate. The key however to this approach is that only restricted information (excluding beneficial ownership details) is available to the public and that more detailed information is only available to the relevant authorities.

Tax And Other Reporting ChangesIn addition to the above we continue to monitor and react,

Trust & Fiduciary – The Year Ahead where appropriate, to legislative changes in instances where the new proposals may adversely affect the structures for which we are responsible. Our in-house legal team, along with our client directors, work hard to ensure that on an ongoing basis we are able to react in an informed and timely manner to such changes. Examples some of these recent changes include the introduction of the UK ATED charge on residential property in 2012, the recent French (2011) and Belgium changes (2013) concerning trust structures and, most recently, the recent UK summer budget from July 2015 which announced changes to the taxation of UK resident non domiciled persons and residential property.

In SummaryWe anticipate being very busy in the year ahead as we accommodate and, where possible, pre-empt potential legislative changes. We are continually looking to improve and adjust our offering to be in as robust and yet flexible as is possible so that we can continue to provide the high level of professional services we demand and clients expect on a daily basis. This is achieved by not only leveraging the experience and expertise we have in-house but also by working closely with the accountants, legal and tax advisors who well known to us and are trusted advisors to us as a fiduciary but also the families with which we work.

In parallel with the above tax and regulatory changes, a family’s rationale for establishing structures evolves from pure tax planning to the establishment of complex dynastic structures where wealth is settled to become a family legacy and protect assets from unforeseen events, matrimonial challenge, spurious claims and political and economic volatility.

“The implementation of FATCA has been a costly and time consuming exercise for all fiduciaries.“

“A number of finance centres, such as Jersey, have had directories recording details of beneficial ownership for companies for a number of years.“

6 7• Special Situations • Corporate Advisory • Real Estate • Trust & Fiduciary •• Property Services • Relocation • Education Advisory • Yachting Services •

• Special Situations • Corporate Advisory • Real Estate • Trust & Fiduciary • • Property Services • Relocation • Education Advisory • Yachting Services •

Shortly we will reach that time of year when the experts in the London property market produce an array of statistics on how the Capital has performed, and what they predict for the year ahead. Just how much faith can we put in these predictions though? Let’s look at what the experts thought this time last year, and it would be only fair to focus on Estate Agents who are at the coal face of the market, who not only record transactions but have their fingers on the pulse of sentiment and confidence.

— Knight Frank predicted an annual change of + 3.5%

— Hamptons predicted an annual change + 1.5%

— Savills predicted an annual change of 0%

So how have these forecasts fared?

Well clearly we have not reached the year end yet, but Land Registry House Price Index released in September this year is as a reliable guide as any to use. Their data showed that London property prices had a monthly increase in September of 1.8%, and 9.6% year on year. Nothing seismic has

London Residential Property Market Review

By Craig Hallam, Head of Property Services

been changed since September, so it would appear to only be fair to give the Estate Agents a pat on the back for the forecasts at the end of last year predicting more modest rises, especially after having two years of double digit increases. Let’s be honest, Estate Agents are often accused of talking the market up, and on the strength of this research at least, whilst they appear to have been conservative in their estimates they have been spot on in calling an end to those huge increases.

Digging behind these September Land Registry numbers do seem

to illustrate another picture. The Prime Markets appear to have cooled significantly and the more outlying regions of London are the strongest. For instance the top three growth Boroughs are Newham, Enfield and Bexley, with the lowest rises in Hammersmith and Fulham, Camden and Wandsworth.

Interestingly enough, two of those same Estate Agents produced 5 year forecasts from 2015 to 2019 indicating 10.4% increase (Savills) and 23.5% (Knight Frank), so it would not appear unwise to assume the London property market is in a stable growth position albeit with a change in emphasis from the prime areas to more suburban areas.So how is confidence in the market? One would assume that with this backdrop, and the General Election been and gone, and a raft of new taxation measures already implemented that there is a positive outlook. Well a number of experts and commentators appear to have a negative view, and UBS produced the widely reported Global Real Estate Bubble Index in October which stated that London was at risk of a substantial price correction should the fundamentals for real estate investment deteriorate. But to quote that same report, house prices have decoupled from local household earnings due to both local and global demand, and from a personal perspective, it may just be that we have moved away from the boom and bust years, and have a pattern of onwards and upwards.

Why could this be the case? Well to use the Office of National Statistics own research, they predict a rise in the population by 4.4m to 70m by 2027, and with London producing roughly 22% of the UK’s GDP, it would not be unrealistic to assume a great deal of those increasing numbers will be heading to the Capital. This alongside a stable political and economic environment, some of the greatest educational facilities in the world but finally and most importantly, demand outstripping supply, it is this author’s personal view at least that house prices will continue to rise in London for the foreseeable future, and that at least so far, the Estate Agents seem to be calling the market right.

DisclaimerSalamanca Group Private Client Services Limited (SGPCS) is a private limited company registered in England and Wales with company no. 8925367 with registered address 8th Floor, 50 Berkeley Street, London, W1J 8HA. SGPCS (FRN 621954) is an appointed representative of Salamanca Capital Partners LLP (“SCP LLP”) which is authorised and regulated by the UK Financial Conduct Authority (FRN 522491). This newsletter neither constitutes, nor should be understood as legal, tax, investment or other advice. The information contained in this document is for general information only and should not be relied upon in relation to any specific circumstances. SGPCS accepts no responsibility for any loss arising from action taken by persons relying upon the information herein. Unless indicated otherwise, all information and images are the property of Salamanca Group. The entire contents of this document is subject to copyright with all rights reserved.

Salamanca Group ® © Salamanca Group Holdings (UK) Ltd 2015

The Salamanca Group’s Trust and Fiduciary companies includes:

— Salamanca Group Trust (Jersey) Limited, regulated by the Jersey Financial Services Commission, registered number 58347, registered office One The Esplanade, St Helier, Jersey, JE2 3QA, Channel Islands;

— Salamanca Group Trust (Switzerland) SA, regulated by the Association Romande des Intermédiaires Financiers and a member of the Swiss Association of Trust Companies, registered office 1 Rue du Pre-de-la-Bichette, P.O. Box 1744, 1211 Geneva 1, Switzerland;

— Salamanca Group Trust (Mauritius) Limited, regulated by the Mauritius Financial Services Commission, registered address Level 8C, Cyber Tower II, Ebene Cyber City, Mauritius.

“Estate Agents are often accused of talking the market up, and on the strength of this research at least, whilst they appear to have been conservative in their estimates they have been spot in in calling an end to those huge increases. “

We welcome the opportunity to discuss any questions you may have in regards to the articles in this newsletter, and to discuss you and your family’s requirements. Simply contact:

+44 (0)20 7495 7070enquiries-privateoffice@salamanca-group.com

Salamanca Group8th Floor50 Berkeley StreetLondonW1J 8HA