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Family Office, December 2015
Family Office, December 2015
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FAMILY
OFFICE
Private Equity
Rankings
Venture Capital
Alternative
Investments
Crunching the
Numbers
2015 Outlook
Hedge Funds
Property
Traditional
Investments
Research
Investment Horizons
Wine
Philanthropy &
Impact Investing
Welcome to
Bloomberg Briefs
Special Report on
Family Offices
DARSHINI SHAH, BLOOMBERG BRIEF EDITOR
SUBSCRIBE TO
BLOOMBERG BRIEFS
BRIEF
Index |Previous|Next
INSIDE
Family Office Rankings
page 5
Traditional Investments
By the Numbers
page 9
page 10
page 11
page 11
page 12
page 13
2015 to Be a 'Rocky Road' for Fixed Income, Signa Wealth's Batra Says
page 14
page 15
Alternative Investments
Private Equity: Family Offices Join Forces to Make Direct Investments
page 17
Private Equity/Venture Capital: Worlds Rich Bullish on U.S. as Family Offices Open Outposts
page 19
page 21
Wine: Taylor Wessing's Gauterin Says Wine 'Attractive' From a Tax Point of View
page 22
Property: U.S. Commercial Real Estate Property Revival Gets Boost From Overseas Investors
page 23
page 24
page 25
page 27
Taylor Wessing's Hussain, Hine Discuss the Benefits and Challenges of Philanthropy
page 28
Impact Investing Forms Part of a Long-Term Investment Strategy, ClearlySo's Mompi Says
page 29
page 30
Jennifer Rossa
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Rankings
RANKINGS
Top 50 Family Offices
2014 FIRM NAME
RANK
1
2
3
4
5
Pictet
CTC | myCFO
(BMO Financial Group)
Abbot Downing
(Wells Fargo)
U.S. Trust Family Office
(Bank of America)
Hawthorn (PNC Financial)
Wilmington Trust
(M&T Bank)
8
9
10
11
12
NUMBER
OF MULTIGENERATIONAL
FAMILIES
AUA PER
MULTIGENERATIONAL
FAMILY ($M)
3%
334
$430
116.4
100.5
96.6
3%
8%
10%
4,340
NA
>2,200 3
81.2
8%
LOCATION
2013 YOY %
AUA CHANGE
($B) 1
Hong Kong
143.5
Chicago, U.S.
New York, U.S.
New York, U.S.
New York, U.S.
$27
NA
$44
PB
PB
MFO
Y
Y
Y
424
$192
$100
PB
Zurich, London,
Singapore, Hong Kong,
New York
Geneva, Switzerland
67.6
29% 4
NA
NA
No minimum
PB
55.0
-4%
>150
$360
$100
PB
Chicago, U.S.
40.4
11%
335
$120
$25
PB
Minneapolis, U.S.
37.4
9%
617
$61
$50
PB
36.2
9%
191
$190
$25
PB
Philadelphia, U.S.
28.2
13%
682
$41
$20
PB
Wilmington, U.S.
26.0
-7%
440
$59
$10
PB
MFO
$11
$72
PB
MFO
Y
Y
1,623
$10
$5
MFO
-13%
357
$38
$10
MFO
Philadelphia, U.S.
24.4
9%
240
$102
14
15
Atlanta, U.S.
New York, U.S.
23.6
18.5
16%
13%
2,121
258
16.5
13%
13.7
18
Veritable
INCLUDES
SFO AS
CLIENTS
(Y/N)
PB
Glenmede
17
MFO OR FAMILY
OFFICE WITHIN
PRIVATE BANK
No minimum,
$50 included
here 2
$20
$25 net worth
$10
13
16
MINIMUM
AUM OF NEW
CLIENT ($M)
Newtown Square,
Pennsylvania, U.S.
Indianapolis, U.S.
13.1
6%
206
$64
$20
MFO
13.0
25%
314
$41
$2
MFO
19
19
Silvercrest Asset
Management Group
13.0
21%
420
$31
$5
MFO
21
11.2
31%
94
$119
No minimum
PB
22
Whittier Trust
10.0
12%
314
$32
$10
MFO
23
Basel, Switzerland
8.4
5%
52
$162
No minimum
MFO
23
TAG Associates
8.4
19%
110
$76
$10
MFO
25
Tiedemann Wealth
Management
$71
$20 investable
assets
MFO
8.3
4%
116
26
Bedrock
Geneva, Switzerland
8.0
14%
82
$98
$10
MFO
27
Hamburg, Germany
7.9
19%
95
$83
$45
MFO
28
6.9
22%
60
$114
$15
MFO
29
6.4
24%
80
$80
PB
Index |Previous|Next
RANKINGS
continued from previous page
LOCATION
San Francisco, U.S.
2013 YOY %
AUA CHANGE
($B) 1
6.2
16%
NUMBER
OF MULTIGENERATIONAL
FAMILIES
AUA PER
MULTIGENERATIONAL
FAMILY ($M)
50
$123
$5
MINIMUM
AUM OF NEW
CLIENT ($M)
MFO OR FAMILY
OFFICE WITHIN
PRIVATE BANK
INCLUDES
SFO AS
CLIENTS
(Y/N)
MFO
31
FS Finance Suisse
Zurich, Switzerland
5.8
21%
11
$527
$50
MFO
32
1875 Finance
Geneva, Switzerland
5.5
6%
12
$458
$5
MFO
33
Bollard Group
Boston, U.S.
5.0
0%
$625
$100
MFO
33
Constellation Wealth
Advisors
5.0
9%
165
$31
$10
MFO
33
Seattle, U.S.
5.0
3%
431
$12
$1
MFO
36
Gresham Partners
Chicago, U.S.
4.6
18%
71
$64
$24
MFO
37
4.5
8%
44
$102
$10
MFO
38
4.4
7%
230
$19
$5
MFO
38
Presidio Group
4.4
13%
128
$34
$10
MFO
40
Lincoln, Massachusetts,
U.S.
4.3
0%
28
$153
$25
MFO
40
Boston, U.S.
4.3
9%
23
$185
$2
MFO
42
Aspiriant
4.2
13%
88
$47
$5
MFO
42
Dallas, U.S.
4.2
14%
133
$31
$10
MFO
44
4.1
18%
42
$97
$25
MFO
45
Antwerp, Belgium
4.0
7%
79
$50
$25
MFO
46
3.8
19%
35
$107
$50
MFO
47
Ballentine Partners
Waltham, Massachusetts,
U.S.
3.7
23%
74
$49
$20
MFO
48
CV Advisors
Miami, U.S.
3.5
40%
50
$70
$25
MFO
49
Signature.
3.3
14%
67
$49
$5
MFO
50
Zurich, Switzerland
3.2
-1%
44
$72
$20
MFO
Source: Bloomberg
1. Assets under advisement as of March 31 or most recent available. 2. Data provided by HSBC provided was only for clients with assets of $50 million or more
3. The majority of family relationships are multigenerational. 4. Includes transfers from within the bank. NA = not available.
Figures for assets under advisement include only assets managed by the family-office unit of the bank. For nonbank family offices,
AUA includes wealth directly managed by the offices and funds
outsourced to money-management firms.
Money managed for private foundations is included. Money managed for pension funds is excluded. Insurance policies and trusts
on which advice is provided are included. The ranked firms provide
both investment and noninvestment services. The latter may include
family meetings, financial education, art consulting, estate planning,
family governance, foundation management, business consulting,
property management, travel arrangement and shopping assistance.
Bloomberg Rankings
Index |Previous|Next
RANKINGS
Fastest-Growing Family Office in Miami Rides Rise in Ultra-Rich
BY ANTHONY EFFINGER
Theres a lot of good entrepreneurial spirit in the Midwest,
Elliot Dornbusch runs a family office in Miami for a select group
says David Krauss, the family offices managing director.
of clients and he wants to keep it small.
CVs Dornbusch says he beat the big firms by promising a perThats gotten harder in the past two years. Dornbusch is chief
sonal touch. Clients always talk to a principal: himself or one of
executive officer of CV Advisors LLC. CV beat the behemoth
his partners. The wealthy these days are almost always entreprefamily offices for a second year in a row to become the fastestneurs, or descended from one, and they like to do business with
growing firm in the Bloomberg Markets annual ranking of the
people who share the same spirit, he says.
richest family offices. The firm saw assets under advisement grow
I dont know how any family would go anywhere and not deal
40 percent in the year ended on March 31, to $3.5 billion. In the
with the owner, Dornbusch says.
prior year, its assets had doubled.
Once a real estate developer in Venezuela, Dornbusch has
Dornbusch says the firm does no marketing and gets all its
been managing money since 2002. He started CV Advisors CV
clients by word of mouth. This year, CV Advisors added nine
stands for Clear View in 2009. His clients are most interested
wealthy clans, for a total of 50.
in preserving capital, not making tons more of it. With that in mind,
Our families tend to recommend their friends, Dornbusch says.
CV aims to return 6 percent to 9 percent a year.
In terms of total assets, CV is No. 48
Lately, CV has been buying investin the Bloomberg Markets ranking, which
ment-grade bonds to get there, sticking
was compiled through a survey of more
with fixed income while other managers
than 1,000 firms worldwide. The No. 1
warn that inflation will return and destroy
firm, HSBC Private Wealth Solutions,
performance.
has $143.5 billion under advisement. It
CV is also winning clients because
grew 3 percent, as did No. 2 Northern
so many are concerned about computer
Trust Corp. The next three, Citigroup
security, Dornbusch says. JPMorgan
Inc.s Citi Private Bank, Bessemer Trust
Chase & Co. disclosed in October that
Thom Melcher, PNC Financial Services Group Inc.
Co. and Bank of New York Mellon Corp.s
hackers had gained access to the contact
BNY Mellon Wealth Management, each
information for 76 million households.
grew 8 percent or more, as the worlds
CV has built its own financial-reporting
rich got richer. They were helped by rising
software in-house, including an iPhone
financial markets in the 12 months ended on March 31.
application that shows stock and bond positions.
Worldwide, the number of people with $30 million or more to
At Chicago-based Northern Trust, many clients wont allow
invest the kind of folks who would hire a family office like CV or
money transfers without a multistep process, says David
HSBC rose 15.6 percent to 128,300 in 2013, according to an
Blowers, president of wealth management for the companys
annual report compiled by Capgemini and RBC Wealth Manageeastern region. For example, a client will send an e-mail or fax or
ment. Their fortunes accounted for 34.6 percent of assets held by
make a phone call requesting a transaction. Then Northern Trust
all millionaires, or $18.2 trillion.
must call back and run through a series of security questions
Many of CVs clients are from Latin America. Dornbusch was
before any money moves.
born in Colombia and raised in Venezuela, where he met coWith more and more families seeking the guidance of a family
founder Alex Mann. Partner Matthew Storm is from Connecticut.
office, attracting clients by catering to their every whim is a growth
Their firm topped the growth chart even though the region was
industry. Thom Melcher, head of No. 11 Hawthorn, part of Pittsa laggard in 2013. Fortunes held by the $30 million-or-more crowd
burgh-based PNC Financial Services Group Inc., has added 90
in Latin America rose just 1.7 percent. By comparison, assets
employees in three and a half years, for a total of 186.
held by the ultrarich in North America rose 19.4 percent.
The families are highly sophisticated and discerning, Melcher
CVs growth matches that trend. Its new families were mostly
says. Theres no margin for error.
from the U.S.
Dornbusch is hiring too. Yet he and his co-founders will always
The second-fastest-growing firm is in the U.S. heartland, a
handle direct communication with clients, he says, and that limits
region being rejuvenated by the shale energy boom and new
future growth. He has already had to turn some prospects away.
manufacturing. Commerce Family Office, a unit of Commerce
There are worse problems to have.
Trust Co. in St. Louis, saw assets jump 31 percent to $11.2 billion
With assistance from Margaret Collins and Judith Sjo-Gaber
for the year ended on March 31.
PE
<GO>
Index |Previous|Next
Traditional
Investments
BY THE NUMBERS
DEVELOPING
ECONOMIES
ASIA-PACIFIC
EUROPE
NORTH
AMERICA
GLOBAL
Hedge Funds
Co-investing
Cash or Equivalent
Alternative Asset Classes
Global
25
North America
30
Europe
23
14
Asia-Pacific
23
16
Developing Economies
18
14
14
10
17
12
16
6
5
11
11
7
10
14
15
3 7
10
10
12
13
100%
380
DEVELOPING
ECONOMIES
288
ASIA-PACIFIC
EUROPE
248
NORTH
AMERICA
GLOBAL
314
360
<3 Years
3-5 Years
6-10 Years
>10 Years
North America
21
Europe
27
Asia-Pacific
33
33
Developing Economies
34
25
27
21
25
31
26
22
23
26
11
15
100%
Index |Previous|Next
10
2015 OUTLOOK
Bessemer CIO Braces Families for Geopolitical to Fed Upheavals
BY MARGARET COLLINS
Index |Previous|Next
11
2015 OUTLOOK
Equities 'Attractive Enough to Warrant Optimism': Frank Investments' Sedgwick
Paul Sedgwick, chief investment officer of Frank
Investments, says that
equity valuations remain
attractive enough to warrant optimism when compared with both history
and other asset prices.
RESEARCH
Wealthy Families Move Toward Stock Investments, UBS Survey Shows
BY ELENA LOGUTENKOVA
12
2015 OUTLOOK
Smith & Williamson Bullish on U.S., European Equities
Charles Gowlland
Chris Bates
Index |Previous|Next
13
2015 OUTLOOK
B Capital's Baring Bullish on U.S. Equities, Bearish on Precious Metals, Commodities
Lorne Baring, managing director of B Capital,
outlines how concern
about a slowdown in
China and dollar strength
affects allocations in the
firm's 'balanced' model
portfolio.
B Capital is a multifamily office investment manager with a global macro mandate and an absolute return focus.
Index |Previous|Next
14
2015 OUTLOOK
2015 to Be a 'Rocky Road' for Fixed Income, Signia Wealth's Batra Says
Gautam Batra, investment
strategist at Signia Wealth,
says that while longer-term
rates will resume their
rise, they will be kept in
check by emerging market
turmoil, geopolitical turbulence and equity market
volatility. Treasuries will
also retain investor interest.
<GO>
BTCA
on trade and energy are yet to be fully realized. Were seeing a wait-and-see mentality
from corporations with respect to potential
disruptions to growth in Europe resulting
from the Russian standoff. In response to
deflation concerns, the ECB also seems
to have fired the last shot with monetary
policy, with sovereign quantitative easing
likely to require drastic deterioration. Japan
is facing the prospect of a consumption tax
hike at a time when consumer spending
remains sluggish.
All of these stimuli could cause people
to turn to treasuries as a safe haven and
a stable source of income in the face of
economic turbulence. In such an environment, fixed income treasury securities will
retain investor interest.
As the prospects for global economic
growth improve, fixed income markets will
also keep a keen eye on the outlook for
U.S. monetary policy following the recent
end of the Feds balance sheet expansion and any subsequent normalization
of policy. Investors know that while we are
unlikely to see rate rises for some months,
any additional QE will face a very high
hurdle to be restarted.
This is made all the more likely as various indicators suggest that benign inflation
may not be with us for much longer, which
will force policymakers out of easy money
policies and could hurt economic growth
prospects and risk assets. With global economic growth bumping along the bottom,
a 10 percent correction in equity markets
should not be seen as unlikely, as equity
market volatility increases around inflection
points in the Feds monetary policy.
Despite the risks, however, there is
some cause for optimism. The global economic recovery is showing signs of broadening, with global growth expected to reach
2.5 percent in 2014, and 2.9 percent in
2015. The BOJ governor Haruhiko Kuroda
has reiterated that stimulus plans remain
on track and that the central bank can
seek to counteract the impact of the sales
tax hike yet further if needed. The ECB has
committed to balance sheet expansion as
needed to avoid a deflationary outcome
15
INVESTMENT HORIZONS
How Family Offices Differ From Other Institutional Investors
Martin Graham, chairman of Oracle Capital
Group, speaks to
Bloomberg's Darshini
Shah about how family
offices tend to be more
flexible than institutional
investors when it comes
to investment horizons,
which can be helpful in
the pursuit of attractive returns.
50
6-10 years
40
3-5 years
30
<3 years
20
10
Europe
North America
Asia-Pacific
Developing
Economies
A: Many of our clients tend to be selfmade entrepreneurs and have made their
money in a particular sector or country.
So, they tend to want to diversify their
wealth globally. They are very cautious
about preserving the money theyve made.
Theyre also looking for absolute returns
rather than relative returns. For those who
are focused on capital growth the choice
is obvious the main asset classes providing long-term capital appreciation are
equity, real estate and high yield bonds.
Those asset classes performed well,
particularly in developed markets, until
recently. Family offices had to invest in
these areas if they were interested in positive real returns. Now the focus is shifting
ever more towards emerging markets.
So, what we see in most portfolios
would be 80 percent of assets in public
fixed income and equities, utilizing options
to manage some of the risk around that.
Theyre looking for fairly safe returns and
so the kind of equities we will invest in
will be those with established franchises,
good growth, strong balance sheets.
Families are also looking for things with
quite a high level of income to finance
their lives. So theyll use corporate bonds
for the income.
Index |Previous|Next
Alternative
Investments
17
PRIVATE EQUITY
Family Offices Join Forces to Make Direct Investments
BY MARGARET COLLINS
12
2011
10
8
6
4
2
0
Direct Investments
Real Estate
Private Equity
Hedge Funds
Index |Previous|Next
18
PRIVATE EQUITY
private equity
BRIEF
Index |Previous|Next
19
1,400
1,200
1,000
800
600
400
200
Global
Europe
North America
Asia-Pacific
Developing
Economies
Index |Previous|Next
20
The newsletters pull together the reporting, insight and analysis of over 45 senior editorial staff and dedicated
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21
HEDGE FUNDS
Marcuard Heritage to Maintain a 'High Allocation' to Credit Managers
Hansjoerg Borutta, group
executive committee
member of wealth manager Marcuard Heritage,
discusses why he has
a "strong" preference for
credit, globally-focused
long-short, and eventdriven managers.
BRIEF
Index |Previous|Next
22
WINE
Taylor Wessing's Gauterin Says Wine 'Attractive' From a Tax Point of View
Tom Gauterin, senior associate in the private client
practice at international
law firm Taylor Wessing,
says wine can represent
an investing opportunity
for those with a little knowledge and enthusiasm.
Index |Previous|Next
23
PROPERTY
U.S. Commercial Real Estate Property Revival Gets Boost from Overseas Investors
The rebirth in U.S. real
estate is being fueled by
overseas investors such
as pension funds, insurers and wealthy families
looking for an inflation
hedge and drawn by demographic trends that are
expected to stoke demand
for multifamily housing, says Tim Ng, managing director and head of research at Clearbrook
Global Advisors. Some of the deals are novel
transactions that involve leasing the land under
a building to insurers. Buyers of commercial
properties are looking beyond gateway cities,
Ng tells Bloombergs Aleksandrs Rozens.
24
PROPERTY
London's Hotels 'Ripe' for Investment by Family Offices
Elaine Dobson
Paul Lawrence
Elaine Dobson, head of residential property, and Paul Lawrence, partner in the real
estate team, at Taylor Wessing, speak to
Bloombergs Darshini Shah about why family
offices are still being drawn to Londons property market and how hotels are moving from
a purchase to an investment.
25
PROPERTY
Dubai a 'Growing Hub' for Global Property Investment Flows
million of assets excluding their main
residence) in Istanbul is to increase by 38
percent and Dubai by 25 percent.
Jerry Parks
Henry Faun
Philanthropy
& Impact
Investing
BY THE NUMBERS
27
No involvement
Planning within the next 18 months
Yes, but no clear strategy or focus
Yes, with a clear strategy or focus
Global
North America
Europe
Asia-Pacific
Developing Economies
PHILANTHROPIC ENDOWMENT,
AS A PROPORTION OF AUM
21
8 20
10 8 28
54
36
5 16
13 10 20
35
North America
37
Europe
27
Asia-Pacific
41
Developing Economies
42
43
57
7 13 20
60
<1%
1%
2%
3-8%
>9%
Global
51
100%
23
17
23
11
30
20
21
5
23
17
11
11
26
34
100%
61
30%
EUROPE
ASIAPACIFIC
13%
11%
NORTH
AMERICA
18
20%
GLOBAL
37
ASIAPACIFIC
EUROPE
NORTH
AMERICA
40
DEVELOPING
ECONOMIES
42
GLOBAL
29%
DEVELOPING
ECONOMIES
Index |Previous|Next
28
PHILANTHROPY
Taylor Wessing's Hussain, Hine Discuss the Benefits and Challenges of Philanthropy
Mustafa Hussain
Andrew Hine
Index |Previous|Next
29
IMPACT INVESTING
Impact Investing Forms Part of a Long-Term Investment Strategy: ClearlySo's Mompi
Mike Mompi, director of
ventures at ClearlySo,
speaks to Bloomberg's
Darshini Shah about why
family offices should consider impact investing and
the difficulties it presents.
ClearlySo connects businesses and enterprises
with potential investors and corporations looking to engage with impact investing.
Index |Previous|Next
30
IMPACT INVESTING
Case Backs Brain Device as Wealthy Push Do-Good Investing
BY MARGARET COLLINS
Index |Previous|Next
31
IMPACT INVESTING
Jean Case
BLOOMBERG
BRIEF GROUP
BRIEF SUBSCRIPTIONS
+1-212-617-9030
bbrief@bloomberg.net
Index |Previous