17 / 44
With the right focus, expertise and practices, the family office is also often able to help with alternative, collectable
investments, whether those might be classic cars, art, watches, wine, whisky, or perhaps specialist, rare diamonds,
jewellery and even historical artefacts.
By pooling all of the family wealth through one SFO vehicle, the family will often have access to larger and more
complex investments than had family members each invested alone. The same is true for the families that work
through MFOs, as the pooled investments of some of those families represented might also be of sufficient scale to
open doors to the world of private investments that require real scale, for example a single investment of USD30
million or often significantly more, in a private equity opportunity, or a hedge fund. Implementing direct or co-
investment deals can also significantly reduce costs be removing the need for fund structured access.
The Global Family Office Report 2018, released in late September 2018 by UBS, in partnership with Campden, reported
that alternative assets/investments now constitute nearly half of the average family office portfolio and that almost
two-fifths of family offices are now engaged in sustainable investing. Their data was based on a survey of principals
and executives in 311 family offices, with an average size of USD808 million assets under management and included
family offices in the Asia region.
There is also a well-documented trend towards family offices investing more in alternatives as well as sustainable and
Environmental, Social and Governance (ESG) investing, an initiative favoured by an increasing number of second-generation
UHNWs and firmly favoured by the Millennials.
This will manifest itself either through the public market investments of these families or perhaps in a very targeted
manner through their increasing exposure to selected private investments, including environmentally conscious and
socially friendly start-ups and early-stage ventures.
Bespoke solutions
Private label family funds is another trending strategy for wealth governance, and the family office environment is
helping boost growth in this area.
Consolidating family investments into a private label family fund can ensure there is independent governance of
family assets away from the business assets, with a professional investment manager and with family members as
the investors. In addition, the private label fund provides an ideal platform to consolidate different family member or
family member structures into a consolidated pool, whilst providing a mechanism to unitise their equitable stakes and
have independent valuations of the net asset value and hence unit value for each stakeholder. The private label fund
can also function as a succession planning tool while developing the skills and focus of the younger family members. It
can even help segregate mainstream from the impactful ESG-type family investments.
A private label fund also offers a considerable degree of privacy for the family, as well as asset protection. It is
relatively simple to establish and operate, with tax incentives as an additional benefit. The family can also select
a governing board of directors to provide independent management and oversight of the fund's assets
and activities.
17