Family Office approach to investing
28 January 2021 | Minutes to read: 3

Family Office approach to investing

By Adrian Frinsdorf

Every investor wants to build wealth in some form or another.

It’s the approach and process that distinguishes more established investors from the rest.

The successful individuals and families we assist through William Buck’s Family Office service range from entrepreneurial business founders to multi-generational patriarchs and matriarchs.

Regardless of age and risk appetite, what links these investors is the need for a more sophisticated approach to the investment process.

William Buck Family Office offers a fiduciary service that focuses on an investment policy and portfolio management approach. This incorporates target investment returns, asset allocation parameters, governance and decision-making frameworks, and risk management techniques.

The main purpose is to achieve holistic long-term objectives for all assets including investment portfolios, direct real estate, private investments and lifestyle assets.

Family Office investors

William Buck Family Office provides investment management services to a range of clients which include:

  • Private investors and Not-for-Profit organisations focusing on investments of greater than $10 million to build wealth for personal, family and ‘for-purpose’ objectives.
  • First generation creators of wealth, innovators and astute investors seeking to move money out of operating businesses and establish more formal structures to focus on select, concentrated risk exposures and direct investments.
  • Multi-generational families considering issues around succession and a need for next generation education. Wealth transition and capital protection are typical triggers for broader investment approaches within this group.

In all these cases, the key first step is to develop an investment strategy and policy which is a charter that establishes the investment rules of engagement and objectives. It sets the benchmark and purpose for which the portfolio is then created.

What makes Family Office investors different

The portfolio of an average mum and dad investor is often heavily skewed to equities and property utilising superannuation as a predominant asset accumulation vehicle.

The composition for many Family Office investors can be strikingly different.

There is usually a strong direct investment focus and greater acceptance of private markets among these individuals and families.

While the traditional asset classes are still popular, Family Office investors have greater access and capacity to include direct property, private equity, venture capital and other specialised assets such as rare collectibles, wine and racehorses.

As such, significant proportions of their portfolios can be less liquid and consist of investments with longer payback periods which require specific assessments and rigorous due diligence processes to assess risk and prospective returns.

How Family Offices typically invest

While the overall approach and personal involvement of the investor may vary, there is a greater level of professional assistance required given the complexities, sophistication and due diligence involved.

The more entrepreneurial high-net-worth investors often prefer to maintain higher levels of control rather than be passive investors. Investing directly through private equity and credit structures can be a popular investment approach among this group.

Taxation and consideration of broader family entities is often a key input into these types of strategies.

Others may look to outsource a little more, but still maintain strong oversight of their investment portfolios by adopting a “manage the manager” approach.

Either way, the rise of Family Office services in Australia highlights growing demand for an integrated approach to investment at the top end of the market.

A Family Office can also provide a more structured and disciplined approach to management and succession planning in wealth transitions.

This appeals to established multi-generational families as it allows for a more comprehensive overarching investment strategy and policy that considers broader family circumstances.

William Buck Family Office solutions are unique to each client. Our approach is a conflict free model based on strict diligence criteria, astute investment advice, and the ability to source multi-disciplinary skills, ensuring you have the most experienced and resourced professionals in your corner.

To find out more visit our Family Office service page or contact us.

Family Office approach to investing

Adrian Frinsdorf

Adrian is the national leader of William Buck's Wealth Advisory Services division and Chair of the William Buck Wealth Advisory Investment Review Committee. Adrian has over 25 years' experience in the financial services industry with expertise in stockbroking, direct share advice, funds management, accountancy and delivery of tailored advice to high net worth clients across banking, investment advice and structured financial planning.

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