Thu, 11/05/2015 - 12:30

Nikolay Vassilev, investment banker and former government minister on pros and cons of private banking in Bulgaria

Nikolay Vasilev.jpg

Expat Capital is the largest independent Bulgarian company for managing individual investment accounts. It manages three mutual funds and over 500 clients with their personal portfolios of financial instruments. Expat Capital is the brainchild of Nikolay Vassilev, who was minister in two governments in the 2000s. Vassilev, who had been an investment banker before he took up politics, has now made full circle.

I would describe Expat as the alternative to the traditional saving methods in the country. We operate by following the model of the large investment banks in Zurich and London, and we also provide an approved and secure manner of long-term personal savings and family wealth management through opportunities for greater security, profitability and control. Via their Expat accounts, the investors can control and manage the different investments as they always have full information and reporting.

What differentiates Expat Capital from ordinary Bulgarian banks?

In Bulgaria, deposit accounts are the widespread form of "investing" and saving. In Western Europe and North America, however, the average citizens amass their family wealth in personal investment accounts rather than in banks, thus participating in mutual or pension funds, or by holding individual investment portfolios managed by professional managers at investment companies.

The money in the deposit accounts of the commercial banks behaves in a completely different pattern than the money in the investment accounts under the licensed investment managers' control. The banks usually take deposits and then inject them back in the economy as credits. Under normal conditions, the well managed and well capitalised banks offer interest rates slightly above the inflation rate.

If an individual is seeking higher yields, maybe it is time for them to consider alternative means of investing. That is exactly what we offer. In our opinion, the long-term savings of the individuals should be in the financial markets where a large part of people's savings around the world are.

What is the difference between an individual investment account and a traditional savings account?

Most of the people who live abroad, regardless of their earnings, entrust their personal wealth to specialised firms which are far more prepared to react upon the changing economic and market conditions. In our country, there are very few asset management companies that offer quality level or scale of the service provided that is comparable to the Western models for long term active individual portfolio management. We compose an individual strategy for each client and we also seek to build a long-term relationship with them. Often whole families or a few generations of a single family are our clients.

We aim to offer our customers better diversification for their savings. Due to objective reasons, usually a Bulgarian client would have a strong concentration of Bulgarian political and economic risk: their business, family occupation, homes and, most probably, a large part of their assets are based in Bulgaria. That is why it is recommendable for the family savings not to be influenced by the domestic environment whatsoever. Thus, our strategy is to invest primarily in foreign instruments.

We are in partnership relations with numerous foreign brokers and banks so that we can trade and hold different asset classes from throughout the world for our clients. During a period of very low interest rates, the individual investment account may gain returns times above the annual deposit interest rates in euro offered by stable banks. The investor has full information and control of what is being invested in and also has immediate liquidity. All instruments in the portfolio can be immediately sold in the global financial markets.

What are Expat's major advantages?

Security, profitability, control. These are the three stepstones on which we build our client relationships.
When one has a problem with their heart or kidneys, they seek the best doctors they can possibly trust. When it comes to their money, however, one is utterly mistrustful and even prefers to hold the scalpel on their own. We all think that we know best about football, politics and investing. It is quite sensible to refer to asset management companies where professionals, equipped with technologies and software, perform serous analyses and compose their own monitoring and grading systems on a daily basis. We regularly observe hundreds of stocks and bonds from throughout the world and are capable of timely recognition and reaction upon the changing market conditions.


Who is Nikolay Vassilev?

Nikolay Vassilev has been Managing Partner at the investment company Expat Capital since 2009. Before joining the private sector, he took part in two consecutive governments (2001-2009) as Deputy Prime Minister and Minister of Economy, Deputy Prime Minister and Minister of Transport and Communications, and Minister of State Administration.

Before coming back to Bulgaria, Vassilev worked in the areas of equities and emerging markets as Senior Vice President at Lazard Capital Markets, London; Associate Director of UBS in their Tokyo, New York and London offices; Tax Consultant at Coopers & Lybrand, Budapest.

Nikolay Vassilev studied Economics and Finance in Hungary, the Unites States and Japan. He has the Chartered Financial Analyst qualification. He speaks English, Hungarian and Russian, and has basic knowledge of French, German and Japanese.

Issue 109

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