WEALTH MANAGEMENT

Family Enterprise Partners

Family Enterprise Partners is a registered agent of Diaphanum Sociedad de Valores, S.A.U. and it’s founders are investment advisor representatives as well as the founder partners in Diaphanum Americas, LLC

What we do:

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

Casos

INVESTMENT POLICY

PAIN POINT

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.

 

SOLUTION

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.

 

IMPACT
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.

PCR 2

PAIN POINT

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.

 

LA SOLUCIÓN

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%.

 

IMPACT

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).

CONSOLIDATION

PAIN POINT

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.

 


SOLUTION

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.

 

IMPACT

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.