Financial Advisory and Wealth Management services to Ultra High Net Worth Individuals and family offices
Comprehensive and Practical Investment Policy Statements
Strategic Asset Allocation
Institutional Agreements with top Private Banks and Custodians in USA, Switzerland and Spain
Portfolio Management – Advisory and Discretionary Mandates
Investment Managers and Security Selection
Aggregation, Monitoring and Financial Reporting
Business family from Mexico with interests in several sectors and a large concentrated position in a single listed stock. After a preliminary analysis we concluded that there was a large concentration risk in a specific sector, country and currency. The family asked us to help them to establish a divestment strategy to reduce their concentrated position. On top of that, the holdings have been donated at a low tax cost raising significant capital gains.
We offered different formulas for the concentrated position, coordinating with several international investment banking teams and a leading tax advisory firm.
The solution included a combination of block trades, derivative structures to hedge the evolution of the concentrated stock and currency hedges and second way out financing.
Additionally, we coordinated a reversal donation and a subsequent demerge with the tax advisors to mitigate the tax effect on the capital gains.
With the proposed solution the family initiated a conversation with other family branches who agreed to jointly reverse the donations to reduce the tax bill and prepare the shares for a block sale in an ordered manner.
Family office aiming to acquire a significant stake in a family business listed company. They wanted us to approach the seller as their representatives to avoid any mispricing in the offer and protect their identity.
We carried out a valuation of the company and make an estimate of the bid price range. Negotiate the terms of the deal and coordinate the acquisition, payment and communication of significant acquisition to the regulator authorities.
The family office avoided the emotional implication in the valuation and negotiation process at the same time than protected its identity on the preliminary contacts and meetings avoiding a higher price due to their high acquisition power.
A group of former top executives from some of the most relevant Retail and Branding companies worldwide ask us to help them meet family offices and operators in Mexico to find partners and co-investors in the Round A for the development of an international and disruptive retail operation.
In a first roadshow to Mexico the entrepreneurs had the opportunity to have one-to-one meetings with the main and most important retail operators in the country and informative breakfasts and lunches with other potential investors and family-offices.
As a result of this work, the entrepreneurs were able to introduce the co-investment opportunity to more than fifty potential investors and conclude in the best terms with some of them co-investing in the Round A.
A second generation family business, where the next generation is fully committed with their respective successful and international careers outside the family business. The patriarchs are worried about the business succession due to the lack of clear rules and the mis appealing that the available jobs of the company have on the next generation of the family business.
We analyze the organigram of the company, salaries and promotions in the business. We identified different career paths for entry positions for graduates and post graduates family members. The leaders of the family committed to explore initiatives and to entrepreneur in new projects that could be leaded by the most prominent family members that would take the seven years family business career path. We call it the PANTERA® program.
A nomination and compensation committee, with independent counselors, took responsibility of the assessment of new entries and the mentoring of the PANTERAS.
A few family members become interested in to apply for the PANTERA career path and even coming back to home. All the family feel comfortable with the program as they recognize the meritocracy of the program, avoiding any undesired outcome of leadership succession.
Family business that is going through a board deadlock, with a conflict between brothers who are also partners. The brothers are also the heads of different areas of the business and bring management issues to the meetings of the board, pushing strategic issues to the back burner. In addition, internal conflicts between the brothers are paralyzing different operational issues. The president asks us for our help in both resolving the blockage and enable them to make decisions.
We started a series of individual and group interviews with the siblings/partners, directors and managers of the company. After identifying some conflicts from past situations, we encouraged the family to express their concerns in a safe and constructive way. At the same time, we also identified structural situations within the company that give rise to conflicts of interest that generated distortion and a lack of alignment when it comes to decision making. We showed the family the urgency of reaching agreements to save the company and negotiate changes in the management and in the Board of Directors.
As a consequence of our action, a reorganization of the board is carried out with the resignation of an independent director and changes in the ownership structure of the companies and departures from key positions are arranged over time in order to professionalize the company.
The brothers signed a commitment through a shareholder's agreement that included the change of ownership, new compensation schemes, the departure of some family executives and the appointment of an Executive President with full powers to take control of the operation. The family continued to be resentful for a while, but everyone accepted that the changes had saved the company and the family.
Family business between the second and third generation as the latter starts taking over the business. They identified some problems such as the lack of clear rules, the lack of experience of some owners to hold board positions, the lack of accountability and the need to design a succession plan to identify potential leaders.
We carried out a SWOT assessment through the four pillars that define SUCCESS | ON (Alignment, Rules, Communication and (H)abilities), and we detected paths for improvement, which we addressed in governance workshops with the family.
As a conclusion of these, the Family signed a Family Constitution and a Family-Owners Agreement and defined a decision-making process for each of the four different governance rooms (family, owners, directors and managers). A family Office was set up to assist the family in achieving all these goals.
The family is much more aligned and has clear expectations about access to career opportunities. In addition, as they feel more comfortable with the decisions made at each room, they identify an improvement in the relationship between cousins and siblings. Finally, The Family Office is making things happen while improving the Financial Education of the whole family.
A business family that expects a liquidity event and wants to preserve the family cohesion, meanwhile taking advantage of scale economies in the management of their assets, besides having an office that coordinates services for the family and ensures the family's lifestyle. They identify a family office as the solution but have no experience and don’t know how to start.
We conducted an Assessment of ARCH® - Alignment, Rules, Communication and (H)abilities of the Family. Thanks to this analysis, we realized that the family needed first a Family constitution to align the interest of the family members on something else than the business. Second, they aimed clear rules to fix their expectations in all decision rooms. Third, we helped the family to choose other services required by the family and to decide whether to do it inhouse or oursourced.
The Family Office was born with the priority to attend the family governance while nurturing the financial education and unity thorough the Investment committee and the Philanthropy. Two family members who couldn’t participate in the operating company are now fully engaged in the family office governance providing a huge service to the whole family.
A Mexican family office willing to donate their financial portfolio from the first to the second generation while achieving wealth protection and tax optimization (i.e., deferring capital gains, protection against seizures, confidentiality, flexibility with back-to-back leverage to finance investments in the family operating companies.
We analyzed all the jurisdictions and the most appropriate investment vehicles meeting family's requirements and coordinated proposals ranging from financial institutions to independent structuring entities. After an elevated amount of meetings with all of them, accompanied with the family tax lawyers, we were finally ready to propose the most suitable vehicle with the best-in-class provider.
With all the information the family was able to achieve its goals by donating the portfolio through the set of an offshore tax efficient vehicle, maintaining control of the investment policy with a top tier custodian, at a low cost and preserving the leverage capacity.
A Family Office that has approved an Investment Policy Statement and needs its Investment Committee (IC) to implement it, as well as supervise and monitor the different advisors, including being accountable to the Board of Directors. The IC manages the relationship with up to three advisors. The information it receives is segregated, with different terminology and not comparable in terms of valuation and measurement metrics.
It is almost impossible for them to understand whether they are complying in aggregate with the objectives and constraints defined in the Investment Policy.
We reviewed the aggregate Investment Policy in addition to evaluating the return and risk objectives, to understand if these were in line with the Board of Directors' mandate.
We conducted an aggregate reporting system using comparable metrics of the performance of the different managers and advisors.
We defined the Investment Committee rules and we lead the meetings taking the roles of external coordinators, writing the minutes of the committee sessions and following up on to the tasks.
The Board of Directors gained confidence in the role of the Investment Committed and the family members of the Committee were acquintant with the role they were commanded to play. As a whole it improved the level of accountability of the family office and its members.
Client with three entities and several mandates. Receives separated Financial Statements that define the assets with a different criteria making it complicated to understand the aggregated return. Furthermore, they couldn’t compare it with an appropriate benchmark. There is some investments in Private Equity funds, but the statements are complex and incomplete regarding relative performance with other liquid strategies. The client ignores how much is invested in any specific asset class, currency, region or sector.
We get automatic and daily data feed from the different entities to provide an aggregated report that shows the total portfolio in a comprehensive and clear breakdown by asset classes and entities. The report takes a look through the final securities making a full understanding of the total exposure to currencies, sectors, regions and top securities.
On the private equity funds, we perform a Public Market Equivalent analysis and define the appropriateness of the rhythm of commitments to achieve a target NAV.
Having achieved a clearer understanding of the relative performance and the total exposure of the portfolio, the client can measure and compare the returns between the different mandates, as well as assign more assets to the investment managers with better performance. On top of that, once understood the relative performance of his private equity funds, including the level of under commitment, the subject starts to have a better control of his investment strategy in Private Markets.
The CEO of a family-office - a second generation member - needs to have a clear understanding on the difference of the objectives, accountability and roles and responsibilities between the board of directors and the investment committee. Though the family worked on family governance, had a clear definition of which issues each governing body was responsible for and how to make decisions, there was a lack of clarity on what the ultimate objective was, what level of risk they could take, and what type of investments they should focus on.
We engaged the family, from the first to the third generation, in a joint learning process where, through readings, we built the Investment Principles of the family office. At the same time, we worked with the Board of Directors to reflect on the objectives of return and risk tolerance and the restrictions that should condition the achievement of these goals. We defined the building blocks that allowed each member of the family to manage their wealth jointly, even with different goals and needs, leveraging on economies of scale in the access to good investment managers and minimizing costs.
The family became much more aligned with the family office's ultimate purpose, understood the family office's ability to maintain their lifestyle, with clarity on the ability to generate cash flows and the level of risk they needed to assume in order to achieve it.
The CEO was able to lead the investment committee to achieve the defined objectives, with greater clarity as to which assets and investment opportunities fit into the investment policy and which did not, so they were able to focus THEIR energy to satisfy the family needs.
A family that implements its investments through the relationship with different private banking entities. Due to their lack of knowledge on investment matters, they grant the entities different discretionary mandates. We have been asked to ponder on the relationships between costs, risks and expected returns of their portfolios.
As a result of this analysis, we have observed that there is a high concentration of risks in some managers and types of investments that the family does not understand, such as structured notes and other types of derivatives. The fees paid to the entities do not make sense for neither the level of complexity nor the expected returns of the securities. The family is taking a higher concentration risk above the one reasonable for the returns they are expecting. The analysis shows a complete misalignment of interest between the entity and the client. The total cost amounts up to 3.1%.
We reviewed the goals and risk tolerance of the client and adjusted the portfolio towards a lower cost of implementation. The understanding of the main drivers of the performance were clearer, improving the alignment of interest. At the end of the analysis the family reduced their total cost to 1.5% (including Advisory Fees).