Our Multi-Family Office

A family office is a private wealth management advisory firm that serves ultra-high-net-worth individuals (UHNWIs) and their families. Family offices provide a comprehensive range of services and solutions to manage, preserve, and grow the wealth of these families over multiple generations. The primary goal of a family office is to centralize and coordinate the management of the family's financial and non-financial affairs while also addressing their unique needs, preferences, and long-term objectives.

There are two main types of family offices:

1. Single-family office (SFO): An SFO is dedicated to serving the needs of a single wealthy family. It is typically established and funded by the family itself and is customized to address their specific requirements.
2. Multi-family office (MFO): An MFO serves multiple families, offering a shared platform for wealth management services. MFOs can be more cost-effective due to econoat mies of scale and shared resources while still providing personalized services.

The services provided by our family our office can be broadly categorized into the following areas:

1. Financial and investment management: Family offices manage the family's investment portfolios, which can include a diverse range of assets, such as stocks, bonds, mutual funds, real estate, private equity, and alternative investments. They develop and implement investment strategies based on the family's risk tolerance, financial goals, and time horizons.
2. Tax planning and advisory: Family offices help families optimize their tax strategies, minimize tax liabilities, and ensure compliance with tax regulations across different jurisdictions.
3. Estate and trust planning: This involves setting up and managing trusts, wills, and estate plans to facilitate the transfer and preservation of wealth according to the family's wishes, while addressing tax implications and potential legal issues.
4. Risk management and insurance: Family offices assess and manage various risks associated with the family's assets and provide advice on suitable insurance products to protect their wealth.
5. Philanthropy and impact investing: They assist families in developing and implementing philanthropic strategies, setting up charitable foundations or trusts, and identifying impact investment opportunities aligned with their values and objectives.
6. Family governance and education: Family offices play a role in advising on family governance structures, succession planning, and fostering financial literacy among family members, ensuring the continuity of wealth across generations.
7. Legal and regulatory compliance: They help families navigate complex legal and regulatory issues related to their wealth, including coordinating with external legal and tax advisors as needed.
8. Lifestyle and concierge services: We also provide non-financial services, such as managing properties, coordinating travel arrangements, security and overseeing household staff.

Single-Family Office (SFO): Costs and Fees

A Single-Family Office (SFO) represents the epitome of personalized wealth management and advisory services, tailored exclusively to the intricate needs of one affluent family. Establishing an SFO involves a comprehensive suite of services, including investment management, estate planning, tax advisory, philanthropy strategies, and lifestyle management, among others. The costs associated with running an SFO are substantial, reflecting the breadth and depth of bespoke services provided.

1. Initial Setup Costs: The initial setup of an SFO can vary significantly based on the complexity and scope of services desired. Initial costs can range from hundreds of thousands to several million dollars, encompassing legal fees, technology infrastructure, office space, and staffing.
2. Operational Expenses: Annual operating costs are equally variable, typically ranging from 1% to 2% of the assets under management (AUM). For SFOs managing significant assets, this can translate into millions of dollars annually. Operational expenses cover staff salaries, professional fees for legal and financial advice, technology maintenance, and office operations.

Multi-Family Office (MFO): Costs and Fees

Multi-Family Offices (MFOs) offer a collaborative approach to wealth management, serving the needs of multiple high-net-worth families. By pooling resources, MFOs achieve economies of scale, making it a more cost-effective solution for families seeking a comprehensive suite of services similar to those of an SFO but at a lower cost per family.

1. Initial Participation Costs: While there are no setup costs akin to establishing an SFO, families may incur initial fees when joining an MFO. These fees are for the integration of the family's portfolio into the MFO's platform and can range from tens of thousands to several hundred thousand dollars, depending on the complexity of the family's financial landscape.
2. Annual Fees: MFOs typically charge an annual fee based on a percentage of AUM, with rates ranging from 0.5% to 1.5%. This fee structure is generally more economical for individual families compared to the costs of running a dedicated SFO. Additionally, MFOs may charge for specific services on a case-by-case basis, further tailoring the cost to the services utilized.

Both SFOs and MFOs offer distinct advantages and cost structures tailored to the unique needs of wealthy families. The choice between an SFO and an MFO depends on the family’s size, complexity of needs, desire for exclusivity, and cost considerations. While SFOs offer unparalleled customization and privacy, MFOs provide a cost-effective solution with a broad range of services through shared resources. Prospective clients should carefully consider their long-term objectives, the scale of their financial and non-financial needs, and their budget for wealth management services before making a decision.

Our Family office is staffed by a team of in-house professionals or outsourced to external experts, depending on the family's preferences and requirements. The team includes investment managers, tax and legal advisors, risk management specialists, and other professionals with expertise in various aspects of wealth management and security.

A family office 

is an organisation that manages the wealth of a single family or several families, focusing on preserving and growing their assets across generations. Based on the provided text, a family office undertakes several vital functions: 

1. Wealth Structuring and Diversification: The family office structures the family’s wealth by distributing it across various asset classes, such as real estate, stocks, hedge funds, and unique assets like forests or lands. This diversification aims to secure the capital and reduce risks associated with market volatility. 
2. Conservative Investment Approach: Typically, family offices adopt a security-oriented investment strategy. Their primary goal is to preserve capital before seeking growth opportunities. This conservative approach ensures the family’s wealth remains intact for future generations. 
3. Emotional and Legacy Investments: Family offices may invest in assets that hold sentimental value for the family, such as forests. Owning forests can be an emotional or romantic endeavour for the wealthy, symbolising a legacy. Since forests in countries like Germany are often held within families for generations and may not offer high returns, some family offices look abroad—to places like Central America or Northern Europe—for such investments. 
4. Use of Advanced Investment Systems: Some family offices employ algorithm-driven investment models. These systems use indicators like a “traffic light” (green to invest, red to hold) to make emotionless, data-driven decisions based on global economic conditions. The aim is to maintain stability even during market crises. 
5. Critique of Over-Conservatism: Some argue that overly conservative investment strategies may hinder contributions to innovation and societal progress. While preserving wealth is essential, actively investing in new technologies, research, and development—such as cancer or vaccine development—can have significant positive social and return impacts. Some wealthy individuals, like the brothers Andreas and Thomas Strüngmann, exemplify this by investing in groundbreaking medical research. 

Essentially, a family office manages and protects a family’s wealth through careful structuring and conservative investments, sometimes incorporating emotional assets and advanced investment technologies. However, there’s an ongoing discussion about balancing wealth preservation with proactive investments that foster innovation and address global challenges, thus resulting in a higher return on investment possibilities.

Value Investing

Value investing is a strategy centered on identifying stocks trading below their intrinsic value. This approach, rooted in the teachings of Benjamin Graham, aims to exploit market inefficiencies, allowing investors to purchase undervalued stocks and hold them until the market corrects the price disparity. Intrinsic value is determined by evaluating a company's fundamentals, such as earnings, dividends, and growth potential, often through discounted cash flow (DCF) analysis or comparative metrics like price-to-earnings (P/E) ratios. 
 

Core Value Investing Approaches 

1. Dollar for Fifty Cents 

• Concept: Buy stocks significantly undervalued compared to their intrinsic value.
• Example: Buying a company with a book value of $100 per share for $50. 
• Pros: High margin of safety; potential for significant upside. 
• Cons: Requires precise valuation; undervaluation may persist. 

 
2. Cannibals 

• Concept: Invest in companies that are aggressively buying back their own shares. 
• Example: Apple, which has a substantial share buyback program. 
• Pros: Increases EPS; signals management confidence. 
• Cons: Buybacks may be poorly timed; limited growth if not complemented by business expansion. 

 
3. Spawners 

• Concept: Focus on businesses that continuously create and spin off new ventures.
• Example: Alphabet (Google), known for spawning diverse successful businesses like Waymo and Google Cloud. 
• Pros: Continuous innovation; potential for multiple revenue streams. 
• Cons: High risk of new ventures failing; management distraction. 

 
4. Multibaggers 

• Concept: Invest in companies with potential to grow stock price tenfold in ten years.
• Example: Amazon, which has seen exponential growth over decades.
• Pros: Significant long-term gains; benefits from compounding. 
• Cons: Requires patience; potential for overvaluation in the short term. 

 
5. Special Situation Investing 

• Concept: Target stocks undergoing extraordinary events like mergers or bankruptcies.
• Example: Investing in a company during a bankruptcy restructuring. 
• Pros: Opportunity for outsized returns; less competition. 
• Cons: High risk; complex analysis required. 

 
6. Merger Arbitrage 

• Concept: Buy stock of a company being acquired and short the acquirer’s stock.
• Example: Acquiring Time Warner shares during its acquisition by AT&T. 
• Pros: Predictable return if merger completes; hedged position. 
• Cons: Risk of merger failure; limited upside. 

 
7. Net-Net Investing 

• Concept: Buy stocks trading below their net current asset value (NCAV). 
• Example: A company with NCAV of $30 per share trading at $20. 
• Pros: Deeply undervalued; high margin of safety. 
• Cons: Limited to small-cap stocks; potentially poor business quality. 

Determining Intrinsic Value 

To determine a company's intrinsic value, investors often use methods like: 

• Discounted Cash Flow (DCF) Analysis: Projects future cash flows and discounts them back to present value using a discount rate. 
• Price-to-Earnings (P/E) Ratio: Compares a company's current share price to its per-share earnings. 
• Price-to-Book (P/B) Ratio: Compares a company's market value to its book value.
• Dividend Discount Model (DDM): Values a stock based on the net present value of its expected future dividends. 

  
 
Value investing remains a robust strategy for building wealth, provided one adheres to rigorous analysis and maintains disciplined execution. Whether adopting traditional approaches or focusing on multibaggers, the essence lies in buying quality assets below their true value and allowing compounding to work its magic over time. By understanding and applying these diverse strategies, investors can navigate market complexities and achieve substantial returns, embodying the timeless principles of value investing.