Family Office, December 2015

December 2014|www.bloombergbriefs.
com
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
December 2014 bloombergbriefs.com
Bloomberg Brief | Family Office
Welcome to
Bloomberg Briefs
Special Report on
Family Offices
DARSHINI SHAH, BLOOMBERG BRIEF EDITOR
A family office is, simply put, an office that caters to a family of

significant wealth. Worldwide, the number of people with $30
million or more to invest the kind of folks who would hire a
family office rose 15.6 percent to 128,300 in 2013, according
to an annual report compiled by Capgemini and RBC Wealth
Management.
One of the greatest challenges a family office faces is building a diversified portfolio capable of prudent growth yet resilient
enough to withstand large swings in asset valuations so that
wealth can be passed to the next generation.
With that in mind, Bloomberg Brief brings you insights from
managers about their investment decisions and philanthropic
endeavors, along with rankings of the 50 biggest multi-family
offices.
Read outlooks for the year ahead from Paul Sedgwick of
Frank Investments, Charles Gowlland and Chris Bates of Smith
& Williamson, Lorne Baring of B Capital and Gautam Batra of
Signia Wealth. Marcuard Heritage says it will manage a high
allocation to credit hedge fund managers. Tom Gauterin talks
about the tax benefits of investing in wine. Find out what types
of property investment in the U.S., London and Middle East
might offer the best returns. Finally, read about the benefits and
challenges of philanthropy, and how family offices are using
some of their fortune to help ease some of society's ills while
aiming to profit through impact investing.
SUBSCRIBE TO
BLOOMBERG BRIEFS
BRIEF
MaRkET LEadInG InTELLIGEnCE

Bloomberg Briefs publishes 18 newsletters to help you stay ahead of the markets. Individual
and group subscriptions available. Visit www.bloombergbriefs.com to subscribe or take a trial.
Or call Annie Gustavson at +1-212-617-0544.
Index |Previous|Next
INSIDE
Family Office Rankings
page 5
Traditional Investments
By the Numbers
page 9
Bessemer CIO Braces Families for Geopolitical to Fed Upheavals
page 10
Equities 'Attractive Enough to Warrant Optimism,' Frank Investments' Sedgwick Says
page 11
Wealthy Families Move Toward Stock Investments, UBS Survey Shows
page 11
Smith & Williamson Bullish on U.S., European Equities
page 12
B Capital's Baring Bullish on U.S. Equities, Bearish on Precious Metals, Commodities
page 13
2015 to Be a 'Rocky Road' for Fixed Income, Signa Wealth's Batra Says
page 14
How Family Offices Differ From Other Institutional Investors
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
Hedge Funds: Marcuard Heritage to Maintain a 'High Allocation' to Credit Managers
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
Property: London's Hotels 'Ripe' for Investment by Family Offices
page 24
Property: Dubai a 'Growing Hub' for Global Property Investment Flows
page 25
Philanthropy & Impact Investing

By the Numbers
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
Case Backs Brain Device as Wealthy Push Do-Good Investing
page 30
Family Office | December 2014

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Rankings
RANKINGS
Top 50 Family Offices
2014 FIRM NAME
RANK
1
2
3
4
5
HSBC Private Wealth

Solutions
Northern Trust
Citi Private Bank
Bessemer Trust
BNY Mellon Wealth
Management
UBS Global Family Office
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
New York, U.S.
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
$25 for UHNW;

$3 for HNW
$5
$30
PB
MFO
Y
Y
1,623
$10
$5
MFO
-13%
357
$38
$10
MFO
Philadelphia, U.S.
24.4
9%
240
$102
14
15
Atlantic Trust (CIBC)

Rockefeller & Co.
Fiduciary Trust
(Franklin Templeton)
GenSpring Family Offices
(affiliate of SunTrust Banks)
Atlanta, U.S.
New York, U.S.
23.6
18.5
16%
13%
2,121
258
New York, U.S.
16.5
13%
Jupiter, Florida, U.S.
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
Oxford Financial Group
19
Silvercrest Asset
Management Group
New York, U.S.
13.0
21%
420
$31
$5
MFO
21
Commerce Family Office

St. Louis, U.S.
(Commerce Trust Company)
11.2
31%
94
$119
No minimum
PB
22
Whittier Trust
South Pasadena, U.S.
10.0
12%
314
$32
$10
MFO
23
ATAG Private & Corporate

Services
Basel, Switzerland
8.4
5%
52
$162
No minimum
MFO
23
TAG Associates
New York, U.S.
8.4
19%
110
$76
$10
MFO
25
Tiedemann Wealth
Management
$71
$20 investable
assets
MFO
New York, U.S.
8.3
4%
116
26
Bedrock
Geneva, Switzerland
8.0
14%
82
$98
$10
MFO
27
Spudy & Co. Family Office
Hamburg, Germany
7.9
19%
95
$83
$45
MFO
28
Fleming Family and Partners London, U.K.
6.9
22%
60
$114
$15
MFO
29
Ascent Private Capital Management (U.S. Bancorp)
6.4
24%
80
$80
$50 net worth
PB
San Francisco, U.S.
continued on next page
RANKINGS
continued from previous page
2014 FIRM NAME

RANK
30
Baker Street Advisors
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
New York, U.S.
5.0
9%
165
$31
$10
MFO
33
Laird Norton Wealth

Management
Seattle, U.S.
5.0
3%
431
$12
$1
MFO
36
Gresham Partners
Chicago, U.S.
4.6
18%
71
$64
$24
MFO
37
Synovus Family Asset

Management
Columbus, Georgia, U.S.
4.5
8%
44
$102
$10
MFO
38
Clarfeld Financial Advisors
Tarrytown, New York, U.S.
4.4
7%
230
$19
$5
MFO
38
Presidio Group
San Francisco, U.S.
4.4
13%
128
$34
$10
MFO
40
Athena Capital Advisors
Lincoln, Massachusetts,
U.S.
4.3
0%
28
$153
$25
MFO
40
Federal Street Advisors
Boston, U.S.
4.3
9%
23
$185
$2
MFO
42
Aspiriant
Los Angeles, U.S.
4.2
13%
88
$47
$5
MFO
42
Tolleson Wealth Management
Dallas, U.S.
4.2
14%
133
$31
$10
MFO
44
St. Louis Trust
St. Louis, U.S.
4.1
18%
42
$97
$25
MFO
45
Monitor Capital Partners
Antwerp, Belgium
4.0
7%
79
$50
$25
MFO
46
Seven Post Investment

Office
San Francisco, U.S.
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.
Norfolk, Virginia, U.S.
3.3
14%
67
$49
$5
MFO
50
Marcuard Family Office
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.
How We Crunched the Numbers

Our ranking is based on data compiled by Bloomberg from information self-reported by multifamily offices. The list was assembled
through research by the Bloomberg Rankings team via a survey
of more than 1,000 firms worldwide, using a database of contacts
obtained from Portland, Oregon-based FamilyOffices.com.
We received responses from 97 firms.
We requested data as of the end of the first quarter of 2014; some
data is for year-end 2013. Change in year-over-year assets under
advisement was calculated using the data supplied by the firms.
Single-family offices are excluded. Family offices that are part of
private banks are included if the bank has a family-office unit that
offers direct and comprehensive investment and noninvestment
services to high-net-worth families.
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
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.
"The families are highly

sophisticated and discerning.
Theres no margin for error."
PE
<GO>
THE NEW HUB FOR PRIVATE EQUITY
Traditional
Investments
BY THE NUMBERS
BY DARSHINI SHAH & PEKKA AALTO
TOTAL BUDGET ALLOCATED TO

INVESTMENT ACTIVITIES (%)
Family offices allocate roughly half of their total budget

to investment activities, regardless of where they are
based, according to the Global Family Office 2014 report
published by Campden Wealth in association with UBS.
The report also showed that the typical family office
portfolio was diversified across asset classes, with
developed-market equities and real estate comprising the
most allocations.
Families from Asia-Pacific have a much shorter investment horizon than their North American and European
counterparts. About a third of a typical North American
portfolio had an investment horizon of 10 years of more,
compared with a typical portfolio of an Asia-Pacific family,
which had only 10 percent of its assets invested with that
time horizon in mind.
DEVELOPING
ECONOMIES
ASIA-PACIFIC
EUROPE
NORTH
AMERICA
47% 44% 45% 52% 42%
GLOBAL
TYPICAL INVESTMENT PORTFOLIO, BY REGION (%)

Equities
Fixed Income
Real Estate Direct Investment
Direct Venture Capital/Private Equity
Private Equity Funds
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%
PORTFOLIO HORIZON (%)
AVERAGE 2013 FAMILY OFFICE

OPERATING BUSINESS REVENUE ($M)
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
34
25
27
21
25
31
26
22
23
26
11
15
100%
Source: Global Family Office Report 2014
10
2015 OUTLOOK
Bessemer CIO Braces Families for Geopolitical to Fed Upheavals
BY MARGARET COLLINS
Rebecca Patterson is preparing the investments of the 1 percent

for upheaval.
From her corner office in New Yorks Rockefeller Center, the
chief investment officer of Bessemer Trust Co. is putting $55.2
billion in client assets under geopolitical and economic stress. In
July that meant plotting returns against prior spikes in oil prices
as conflicts escalated in Gaza and along Russian-Ukraine trade
routes. By October, she was mapping out returns from different
asset classes when interest rates rise.
"Our biggest focus right now is thinking through the coming Fed
rate-hike cycle," said Patterson. "You know it's coming. You don't
know when, or how quick it will be, but you know it probably won't
be exactly what the market is pricing in."
Stress testing portfolios is one of the changes Patterson has
made since joining Bessemer, the worlds fourth-largest multifamily office, from JPMorgan Chase & Co. two years ago. The
strategy means it won't take her team days or weeks to respond
when there's a crisis, she said.
We know history wont repeat but it might rhyme, said Patterson.
The average family at Bessemer
has $45 million in assets under the
firm's supervision and the wealth of its
founder, steel-mogul Henry Phipps and
his descendants, remains the largest
relationship.
My owner is a client, Patterson said.
Such proximity is why chief investment officers at family offices require
nerves of steel, especially following
the 2008-2009 credit crisis, said Dan
Farrell, chairman and chief executive officer of Privos Capital, a global
Source: Bessemer Trust/
Callie Lipkin
family office advisory firm based in
New York.
Rebecca Patterson
The CIO carries the weight of the
familys world on his or her shoulders, Farrell said.
Patterson sets asset allocation recommendations in general and the firms managers pick the companies in which to
invest. Bessemers main model allocation, which has a risk
profile of 70 percent equities and 30 percent bonds, last year
returned 14.8 percent, beating its benchmarks 12.6 percent
gain, according to the company. That allocation returned 7.9
percent compared with 6.9 percent for the benchmark in the 12
months through September.
The benchmark is a composite Bessemer created using the
Bank of America Merrill Lynch 1-10 Year AAA-A U.S. Corporate &
Government Index, the Standard & Poors Global Broad Market
Index and Dow Jones-UBS Commodity Index.
This year Patterson trimmed a portion of the investments to
small-cap stocks while adding to large-cap equities and commodities such as oil and agriculture because she thinks U.S. inflation
is showing signs that it will rise over the next several years.
She saw the market

downturn in October as a
buying opportunity.
"We did go out directly to
our clients after Treasuries
hit 1.86 percent," Patterson
said. "For investors waiting for the dip, we believed
it was an opportunity, so
we recommended adding
stocks, mainly in large cap."
While Patterson expects
the U.S. to lead global
growth next year, shes also
increased allocations to
Rebecca Patterson, Bessemer Trust
emerging market equities
this year, mainly through
emerging Asian economies
in recent months.
Im increasingly biased to having more global exposure, she said.
Phipps founded Bessemer in 1907 to manage his wealth after
selling his interest in Carnegie Steel to J.P. Morgan. The company
is named after Henry Bessemer, the inventor of the steel-making
process that was instrumental to the success of Carnegie Steel,
according to Bessemers website. The closely held firm opened to
other families in 1974 and now has about 2,200 clients, according
to the website. It offers services including investments, estate planning and tax advice, and supervised $97.5 billion in total assets as
of June.
Bessemer ranked fourth by assets under advisement among
firms worldwide that cater to wealthy families, behind HSBC Private Wealth Solutions, Northern Trust Corp. and Citi Private Bank,
according to data compiled by Bloomberg.
Bessemer uses a combination of internal and external investment managers. The firm runs its own mutual funds including
those that invest in small-and-mid cap stocks and global equities.
There are so many benefits to having some money run internally so you are touching the market every day, she said. She
also judges Bessemers performance against external managers.
Investments in alternatives such as private equity and
hedge funds are managed by other firms such as Bain Capital LLC and Anchorage Capital Group, Patterson said. Last
year she recommended exiting U.S. high yield bonds, which
were another asset class that Bessemer invested in for clients
using outside managers.
The main goal is limiting risk for families investments, Patterson said.
Our clients have spent a significant part of their lives building
their wealth and dont want to have to start over, she said. The
more I can anticipate and plan for what can go wrong, the faster
Im going to be able to react and make sure we do protect their
irreplaceable capital.
"The more I can

anticipate and plan for
what can go wrong, the
faster Im going to be
able to react and make
sure we do protect their
irreplaceable capital."
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.
The conundrum facing investors again in

2015 is what asset class is going to give
the best risk-adjusted return.
Some take the view that bonds offer no
income and are expensive when compared
with history, unless one takes a very bleak
view of the global economic outlook.
Others say stock valuations, driven by
central banks ultra-loose monetary policies, have risen to unsustainable levels,
particularly in the U.S. They believe that
as the Federal Reserve removes this
stimulus, risk assets will no longer have
the artificial crutch they need and are thus
vulnerable, a view expressed recently by
the Bank of International Settlements.
We believe that although equity valuations have rerated substantially in the past
couple of years, they remain attractive
enough to warrant optimism, when com-
pared with both history and other asset

prices.
Historically, equity markets tend not
to crash when governments and central
bankers are pursuing pro-growth strategies,
as is currently the case. When one stands
back and looks at the world today, there
are many reasons to be worried the
euro area economy, geopolitical tensions
and emerging market growth are at top of
the list. Indeed, concerns many had that
central bank policies would lead to rampant
inflation have now turned more to worries
that deflationary pressures could return. The
silver lining is that central banks are accommodative, and will remain so for a while.
As a result, we expect equities to make
up 70 percent of our portfolio next year,
as it has been during the past few years.
The balance of the portfolio is held in
cash and corporate bonds with maturities
extending approximately five years. We do
not invest in structured products or use
derivatives as a form of leverage.
Frank Investments philosophy is based
around diversification, global reach and
sustainable dividend policies. Hence, our
philosophy going into 2015 is very much
to stick with these type of companies.
Examples include Reckitt Benckiser Plc,

Melrose Plc and Vodafone Plc in the U.K.,
and in Siemens AG and Sanofi in continental Europe.
We avoid the highly operationally
geared sectors, such as airlines and steel
manufacturers. Our investment philosophy
is that these are sectors you rent during
periods of strong economic growth, which
is not the case at present, and not buy for
the long term.
We tend not to invest directly in emerging markets as it exposes the portfolio
to greater currency and political risk.
Liquidity can also be an issue as can poor
corporate governance. Instead, we get
our emerging market exposure from companies with an emerging market presence,
but whose foundations are in the developed market. Prime examples would be
Standard Chartered Plc and Procter and
Gamble Co. The downside is you dont get
the gearing from a direct investment into
the emerging market itself.
Frank Investments was established in
2005 in the style of a family office. It
offers its clients the opportunity to invest
alongside the founder's portfolio.
RESEARCH
Wealthy Families Move Toward Stock Investments, UBS Survey Shows
BY ELENA LOGUTENKOVA
Wealthy families around the globe have started shifting assets

into stocks from bonds, reflecting increasing optimism about
the outlook, according to a survey by UBS AG and Campden
Wealth Research.
Family offices in North America and in Asia-Pacific regions,
which represented about half of those surveyed, shifted toward
growth investment from more balanced and preservation strategies, UBS and Campden said in the annual report published in
September. Some 205 family offices with more than $180 billion
in private wealth were surveyed in the first half.
When you speak to the family offices there is a perception of
taking more risk than in prior years, Philip Higson, vice chairman
of UBSs global family office group, said in an interview in Zurich.
Were discussing equities and alternatives to fixed income more.
A typical family office serves a family with seven households
across three generations, according to the report. The average
portfolio returned 9 percent in 2013, driven largely by investment

in developed-market stocks, it estimated.
In Europe, family offices have remained more cautious, with
about 17 percent pursuing growth strategies compared with 44
percent in North America, 33 percent in Asia Pacific and 20 percent in developing economies, according to the survey.
Europe is a step behind, said Andrew Porter, director of
research at Campden Wealth, which is a family-owned business.
Europe has always been more conservative and it faces different
geopolitical and macroeconomic challenges.
An investment portfolio of a European family office typically
holds about 23 percent in equities, 16 percent in direct real
estate investments, 14 percent in fixed-income products and
10 percent in cash. That compares with North American family
offices, which typically have 30 percent in equities, 12 percent
in real estate, 10 percent in fixed income and 7 percent in cash,
according to the survey.
12
2015 OUTLOOK
Smith & Williamson Bullish on U.S., European Equities
Charles Gowlland
Chris Bates
Charles Gowlland, investment management

partner, and Chris Bates, investment strategist, Smith & Williamson, say an improving
U.S. economy will take over from quantitative easing as a key driver for markets and
that there is potential for euro-area policy to
surprise on the upside.
As we enter the winter months, the focus

for markets appears to have shifted to the
loss of economic momentum outside the
Anglo-Saxon world. This was highlighted
by the latest World Economic Outlook
published by the IMF, an organization well
known for being fashionably late for the
party, in which it slashed its global growth
forecasts for 2014 and 2015, with the
spotlight on the ongoing woes in the euro
area. This acted as a catalyst for a notable
pick-up in volatility, a global stock market
sell-off during October and the 10-year U.S.
Treasury yield slipping below 2 percent.
For markets globally, the main elephant
in the room is the euro area. This has
been magnified by a European Central
Bank that continues to dither and disappoint with its underwhelming "Diet QE"
policy response. Initial take-up by banks
of the Targeted Long Term Refinancing
Operations came in well below expectations and the ECBs plan to grow its
balance sheet through Asset Backed
Securities purchases is likely to be a nonstarter. All this has left markets feeling like
Oliver Twist asking: Please, sir, I want
some more!
Europe remains in a deflationary
vortex of low growth, weak demand and
CPI inflation that teeters precariously on
the edge of falling into full-blown deflation. This is a risk that must be avoided
at all costs, with government debt levels
remaining highly elevated, as the real
value of debt rises in a deflationary envi-
ronment. A key difference between now

and 2012, the peak of the euro area crisis,
is that back then, the concerns were
contained to the periphery economies
of Greece, Ireland, Portugal and Spain.
Whats clear now is that the regions core
countries including Italy, France and even
Germany are being dragged into the
downward spiral.
The message from the bond markets,
where German bund yields have continued to decline and decouple from their
U.K. and U.S. equivalents, is eerily reminiscent of the deflationary spiral Japan
found itself in for the past two decades.
Whilst financial conditions in the euro area
have improved in recent years, yields on
peripheral sovereign debt are no longer
into the stratosphere and the euro has
weakened, yet the regions major structural problems remain unaddressed.
ECB President Mario Draghi has
stressed the need for an Abenomicsstyle three arrows approach to tackling
the euro areas problems. This is all well
and good, but Draghi is finding his wings
being increasingly clipped by German
policymakers, scarred by history. The
Germans have been firmly saying nein to
signing off on any full-fat QE program. The
divergence in the views of Mario Draghi
and the Bundesbank is halting any progress for the region. Draghis hands may
be tied, but the frustration for markets is
that they are at the mercy of an increasingly dysfunctional European system and
politicians are not tackling the necessary
domestic structural reforms.
Still, the recent market shake-out
throughout asset classes has presented
both Wall Street and the High Street with
a number of significant positives. The fall
in the oil price has lowered the cost of
fuel and energy at both a household and
corporate level. Lower bond yields reduce
the cost of borrowing for governments
and corporations and, in the U.S., should
feed through to lower mortgage rates.
Subdued inflation levels not only boost
disposable incomes, but take much of
the pressure off both the Fed and the
Monetary Policy Committee in the U.K. to
raise interest rates. Below-target inflation
levels and the gravitational pull of the
euro areas problems mean rate tighten-
ing expectations continue to be pushed

out even further. This continued financial repression remains a positive for
equities markets.
So, what does all this mean for asset
allocation? Although U.S. equity valuations look higher on a relative basis, we
prefer to follow the economic growth. An
improving U.S. economy, where growth of
3 percent plus is still achievable, should
help support corporate earnings that
need to take over from QE as a key driver
for markets. The continued upward trajectory of U.S. earnings per share will also
help to alleviate some valuation concerns.
A strengthening dollar would be a
mild negative for the U.S. economy, but
with just 7 percent of S&P 500 revenues
coming from the euro area (against 70
percent domestically), the U.S. market
remains relatively insulated from weak
demand elsewhere in the world. Nondollar based investors would also benefit
from a tailwind from dollar appreciation.
In Europe, equity markets appear to
have discounted an ECB that will continue
to underwhelm. However, with expectations so low there is potential for policy to
surprise on the upside. There are signs
that the Germans are warming to the idea
of a full-fat version of QE, or a big take-up
of the next tranche of Targeted LTROs in
December which could potentially reinvigorate markets.
We dont believe the recent rise in
volatility is the start of a major change in
direction for equity markets, indeed the
dips so far have proven good entry points
for active investment managers. However,
with markets starting to wean themselves
off the Feds liquidity, this remains a major
transitional phase where volatility is likely
to persist. With bond yields at historic lows
we dont see much here in terms of capital
growth, but with so many unknowns and
existential risks still out there, a welldiversified, balanced portfolio seems the
sturdiest ship in which to navigate these
choppy waters.
Smith & Williamson is an independently
owned private client house. A major part of
the business has been the provision of wealth
management to ultra-high-net-worth families, their trusts and their family companies.
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.
2015 is likely to be a year of marginally

slower growth than this year and we
expect global gross domestic product to be
around 3.8 percent.
Within that number, we forecast that
the U.S. will continue to enjoy a broadbased expansion relative to Europe and
Asia, which will see a patchier path to
growth. Europe may bump along the
economic flatline as the region adjusts to
a perennially high debt burden, coupled
with troublesome unemployment levels.
Asia will reflect sensitivity to China which
is attempting the tricky balancing act to
switch from an export-led economy to one
that encompasses broad consumption as
well. The property market in China is worrisome and could unhinge growth, which
currently stands at about 7.3 percent per
annum, but which is vulnerable to a housing market correction.
So, what are the asset classes to consider when constructing a global portfolio? B Capital separates the pack into
seven categories: cash, precious metals,
bonds, equities, alternatives, commodities and property.
The following model weightings relate
to our 'balanced' strategy for clients with
a moderate risk profile and who aim for a
combination of capital growth and income
to make up the total return. We exclude
private equity, which we cover separately
at B Capital, and which is not part of our
liquid investment portfolio models.
Equities, 53%: Equities react well if
there is regional growth and we see this
as a U.S. story in the year ahead, while
being tactically underweight Europe.
Earning valuations for the developed markets are not expensive in general following the recent correction in stocks, so we
see potential for both capital appreciation
as well a dividend yield component to the
total expected return. The world economic

stage is still fraught with risks and central
banks are keeping monetary policy loose
for fear of sending economies back into
recession, however global companies
with a strong export franchise should perform well and can more easily withstand
local wobbles back home. The developing
world has much potential and a perceived
dynamism which attracts capital despite
the reduced transparency and increased
volatility along the way. In the long term,
we believe that emerging markets will outperform the developed world. Valuations
are significantly cheap at the moment
but possible U.S. dollar strength, a China
slowdown and commodities under pressure leads us to temper our enthusiasm in
the short term.
Bonds, 33%: Bonds offer a return,
albeit low, while interest rates hover at
multi-decade lows. Investment-grade sovereign debt looks expensive. Lower-rated
corporates offer some attraction so long
as investors understand that the stellar
performance of bonds during the crisis
will not be repeated in the coming years.
In fact, rates will rise at some point which
will be a negative for fixed income. We
hold 2- to 4-year issues which will mature
as yields pick up. In the meantime, it is a
low-return environment for bond investors
and is a "smoother" of overall portfolio risk
in our models.
Alternatives, 10%: Alternatives are
a wide description for many types of
strategies and we look for managers that
can demonstrate returns that are truly
uncorrelated to financial markets. That
excludes funds which trade on the financial markets. With fixed income offering
low returns and likely to underperform in
the medium term, we seek an alternative
asset that can add value to the income
component of the portfolio. A direct
lending fund which works with operating businesses meets this objective as
market volatility has no correlation to the
loans issued.
Property, 7%: Property can be a useful
portfolio asset class as it exhibits elements of capital growth which protects
from inflation, as well as providing a

fixed-income type return from rental yields.
There are cyclical forces that affect property and in a period of economic growth,
it is a useful inflation-linked investment.
We favor commercial property ownership
through a fund with a long track record
which covers upturns and importantly
downturns in the economy.
Cash, 2%: It's an era of near-zero
interest rates and sub-optimal global
growth. Governments have made it clear
that short-term monetary policy is going
to remain loose. That means that cash
will pay nothing for the foreseeable future
and so, with no return expected and inflation to subtract, we don't see the point in
cash except to act as a holding pot during
market volatility.
Precious Metals, Zero Weighting:
Precious metals such as gold and silver,
as well as platinum and palladium, have
done well during the early years after
the global financial crisis. Haven requirements, cheap money, falling interest
rates, lack of confidence in the banking system and general panic sent the
shiny metals roaring ahead. Following
a 40 percent fall in prices over the last
few years, some are tempted to buy, but
we are not convinced about the merits
of precious metals in a commodity bear
market, coupled with low inflation and
a China slowdown. Who would buy gold
if the world economy is healing itself? It
doesn't make sense when compared to
most asset classes and the volatile price
action over the last three years dispels
the myth that gold is a safe haven. In fact,
we consider it as just another currency
pair to trade like cable or eurodollar.
Commodities, Zero Weighting: Commodities are under pressure due to the
slowing China story and, in some cases,
a significant increase in supply. Commodities are priced in U.S. dollars and with a
strong dollar expected into 2015, we are
bearish of the asset class.
B Capital is a multifamily office investment manager with a global macro mandate and an absolute return focus.
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>
2014 began with a brightening outlook

for global growth and a sense that some
of the noisiest of geopolitical risks were
starting to quiet down. It had become de
rigueur in some circles to forecast clouds
on the horizon for fixed income, until we
saw the big bond market bull run of 2014,
and the well-documented capitulation on
Oct. 15. The price action in October was
a shock to Wall Street analysts, and many
are still straining to uncover all of the
events that led to the run.
In the light of the year just gone, its
tempting to see bonds continuing to present us with positive performance, as after
all, the Bank of Japan and the European
Central Bank are still in fully fledged
easing mode.
However, fundamentals still suggest
2015 will be a rocky road for fixed income
as the Federal Reserve and the Bank of
England commence normalizing policy in
response to firming economic growth and
dwindling spare capacity. Consequently,
we forecast that longer-term rates will
resume their rise, but will be kept in check
by emerging market turmoil, geopolitical
turbulence and equity market volatility.
As an asset class, bonds tend to do well
when the rest of the world is having a bad
time, and the global investment landscape
is contoured by a number of hazards that
will be hard for investors to navigate.
In terms of economic headwinds,
Chinas growth continues to slow, and
the prospect of defaults is the elephant in
the room when looking east. Geopolitical
concerns are also reaching something
close to boiling point in several places
around the world and the impact of these
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
in Europe. Equity valuations remain in line

with 25-year averages, and dividend yields
remain supportive in the current very low
interest rate environment. In our view, Fed
policy will remain highly accommodative
even with the proposed reduction in stimulus, and we are seeing signs of moderate
growth in China, though growth in broader
emerging markets remains weak.
Signia Wealth currently holds a neutral
position in equities and runs a regionally
neutral strategy. Our focus in the equity
space is generating alpha through manager selection, direct equities and sector
selection. We are underweight in fixed
income securities and the duration on
our fixed income portfolio is shorter than
the benchmark.
Its true that emerging market debt
valuations look attractive, but the downside
risks remain. Relatively low nominal yields
on high yield and emerging market debt
dont currently offer sufficient compensation for potential defaults if interest rates
were to move towards normalisation, so
at Signia Wealth we are currently underweight in these areas.
To find an alternative to the diminishing
returns available on fixed income securities, we have increased hedge fund exposure. In the current climate, they provide us
with an asset with low volatility and stable
returns, and the funds that meet these criteria are becoming a more significant part
of our strategic focus at Signia Wealth.
Across Signia Wealth, a number of our
clients investment strategies have seen
their hedge fund exposure increased by
about 10 percent, with the focus being
largely nondirectional, using specialist
strategies such as merger arbitrage and
equity long-short. In particular, weve
increased allocations to market neutral
and relative value hedge funds that help us
limit portfolio directionality and protect portfolios against the shock of rising yields
and greater volatility.
Signia Wealth is a wealth-management
boutique specializing in strategic wealth
management for individuals, families and trusts.
Transaction Cost Analysis >>>>>>>

for Fixed Income
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.
Average Investment Horizon of a Family Office Portfolio

100
90
80
70
60
>10 years
50
6-10 years
40
Q: Do investment horizons or returns

matter to family offices?
A: Family wealth is known for drying up
over three generations. So, returns matter.
Refreshingly, for those accustomed to the
citys obsession with short-term reporting,
family offices are more focused on longterm value generation and wealth preservation. Many wealthy individuals remain
skeptical about the prospects for large
scale growth and very few family offices
are looking for capital growth, as opposed
to capital preservation. Our clients would
rate investment returns in their top five
priorities, but not usually as number one.
This means clients tend to be happy to
lock money up on a medium- to long-term
basis, but they need enough cash to live
on and this must be taken into account by
their advisers.
Q: How does this differ from institutional investors, e.g. pension funds?
A: Family offices tend to be more flexible
in what theyll consider than institutional
investors, which can be helpful in the
pursuit of attractive returns. A family
knows its got the responsibility to not
just preserve the wealth, but also to take
care of the next generation. So, families
are very happy to be in three- to five-year
projects. Theyre almost custodians of
assets. Generally, families are very happy
to look over their portfolio once a year.
Pension funds on the other hand look at
quarterly performance figures. So these
sort of institutions have a different, more
short-term type of thinking.
Q: So what would a typical portfolio for
a family look like?
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.
Q: What about the remainder of

the portfolio?
A: About 10 to 20 percent of the portfolio
will be in alternative investments. These
will be things like co-investments and
private equity funds. We even have a wine
fund that some clients invest in.
Q: What do you mean by
co-investments?
A: For example, we have some property
development projects we do and our
clients invest in those projects. Our clients
are very happy to re-invest some of the
money, often in the industry they initially
made their money in they like to keep
some skin in the game. Theyll invest in a
sector where theyve got deep knowledge.
Q: But investment portfolios are not
the only way to realize meaningful
returns on assets.
A: No. Careful wealth structuring can
itself lead to significant savings and tax
efficiencies as well as helping to preserve,
distribute and pass on wealth. Another
secure option clients may opt for is the
use of trusts or foundations in order to
provide maximum protection for the
assets involved.
Alternative
Investments
17
PRIVATE EQUITY
Family Offices Join Forces to Make Direct Investments
BY MARGARET COLLINS
Katie Kalvodas interest was piqued

when the 40-year-old money manager for
a group of ultra-wealthy families heard
about a startup urban farm that grows
produce in vertical greenhouses.
Kalvoda knew early-stage investments
in private companies can be risky. She
eventually took a stake in the venture this
year with some reassurance. The chief
investment officer at Newport Wealth
Management in Newport Beach, California, joined a handful of fellow family
offices in an alliance that gave them more
muscle to get a better price, expanded
access to research and broader expertise
to track the investment.
We dont have this wall of secrecy that
we had at one time, said Kalvoda, who
previously worked at fund-of-hedge- funds
Collins Associates Inc. and Citigroup
Inc. Were a block of investors working
together with more scale.
The deal illustrates a recent trend among
family offices to team up with like-minded
peers for direct investments in companies.
Theyre trading in some of their traditional
secrecy, pooling assets and knowledge to
make venture capital and private-equity
deals much like buyout firms do in socalled club deals, while circumventing the
fees charged by those firms.
Sometimes, the companies they back
are local business seeking to make a
difference in the community, other times
theyre purely financial investments.
Its a departure from how family offices
traditionally invested outside the public
markets, which was by committing capital
to intermediary fund managers who
picked the opportunities, set the terms
of a purchase or sale and oversaw the
progress. Such third-party firms usually
charge management fees of 1.5 percent to
2 percent, keep 20 percent of profits and
require lockups of committed money for
as long as 10 years.
This is a relatively new phenomenon,
Raffi Amit, a professor of entrepreneurship
at the University of Pennsylvania, said of
families that collaborate in direct deals.
The jury is still out on whether this will lead
to higher returns on investment capital.
Single-family offices in the U.S. hold
about $1.2 trillion in assets and multi-
Average Allocations by SFOs to Select Investment Types (%)

14
2009
12
2011
10
8
6
4
2
0
Direct Investments
Real Estate
Private Equity
Hedge Funds
Source: 2012 Wharton Global Family Alliance study
family ones manage about $500 billion,

according to Bob Casey, senior managing
director for research at consulting firm
Family Wealth Alliance.
Many made their money by building
their own businesses and are big enough
to operate like a pension fund or endowment, with a staff to pick investments.
Family offices also typically provide
additional services including accounting,
estate planning and concierge products.
Theres little data available yet on the
investment returns of these collaborative
deals by family offices, said Amit, who
is chairman of the universitys Wharton
Global Family Alliance, which researches
family-wealth management. Families
usually dont publicize their stakes or
performance.
According to a 2012 Wharton study of
about 100 single- family offices, about 16
percent said they had 10-year returns, net
of taxes and fees, of more than 10 percent
annually. About 18 percent of respondents
had returns between 7 percent and 9
percent. Among the group surveyed, 42
percent didnt answer questions about
their performance, the data showed. The
Standard & Poors 500 Index of stocks
gained 2.9 percent annually while the
Barclays U.S. Aggregate bond index saw
annualized returns of 5.8 percent.
The appeal of investing together or

forming a partnership to take a stake
is that fees are lower and families can
better understand the business they
invest in, Casey of the Family Wealth
Alliance said. Family offices involved will
divide the due diligence by interest and
expertise to increase efficiency and maximize their resources.
Since the financial crisis theres been
a question about whether the value-add
from an intermediary fund is worth the
cost, said Ashby Monk, executive director
of the Global Projects Center at Stanford
University, which studies the movement
of financial assets globally. For these big
families there was this perception that they
were often getting screwed by Wall Street.
Kalvoda, whose firm serves as the
investment office for a group of related
family members, can rattle off the details
of the San Diego farming company
including how its vertical- greenhouse
technology isnt dependent on soil, how
it offers Californians local food they love
like cilantro, and how it creates jobs in the
community and benefits the environment.
For this investment, two family offices
analyzed the marketplace and the business model, while a third office determined the fair value of the company.
Continued on next page
18
PRIVATE EQUITY
Continued from previous page
Kalvodas firm did a background check

on the start-ups managers even though
some of families knew the entrepreneurs
personally, she said. Kalvoda declined to
name the startup or her co-investors. The
families she invests with usually have at
least $500 million in assets, she said.
Since May, Kalvoda said she's been
approached by a billion-dollar corporate
pension plan, a Fortune 500 family and
an investment consulting firm to co-invest
with her family office group as the trend
gains momentum.
Ward McNally, whose family founded
mapmaker Rand McNally, has been
advising family offices on joint investments as managing partner of Chicagobased McNally Capital, which serves as
a merchant bank to family offices. One
of the biggest challenges is reviewing
enough deals to find an attractive one,
said McNally, whose firm in 2010 helped
12 family offices create an alliance called
the Cleantech Syndicate with $1.2 billion
to invest in clean-energy companies.
About 22 percent of family offices
had three or more people in their office
tasked with the sourcing, screening,
monitoring and exiting of direct investments in 2010, according to a survey
by McNallys firm. That percentage has
almost doubled as of this year to 35
percent, said McNally.
Even with added staff dedicated to
direct deals, families are finding alliances
valuable especially to locate investments globally. SandAire, a multi-family
office that manages about 3.5 billion
pounds ($5.6 billion), formed the Wigmore Association with other family offices
in 2011 to share research. The eight
members are based in the U.S., Brazil,

Germany, Canada, Australia, the United
Kingdom and Mexico.
Some Wigmore members joined last
year on two deals in private companies in
"With like-minded and friendly

investors along for the ride,
you can leverage each others
strengths. When it comes to
negotiating, you ultimately
carry a bigger stick."
Katie Kalvoda, Newport Wealth Management
the U.S. and U.K. investing more than $20

million combined. Due diligence was first
done by the family based in the region
of the investment opportunity and then
each member interested does follow-up
research themselves, said Marc Hendriks, chief investment officer at Londonbased SandAire. The investments are in
early-stage businesses in the technology
industry or startups based on a new patents, said Hendriks, who declined to give
the companies names.
We are strong believers in investing in
pre-IPO companies, said Hendriks, who
was previously chief economist at firms
including Societe Generale and Swiss
Bank Corp.
The challenges of direct deals dont
end with due diligence, said Stephen

McCarthy, who helps manage his familys
investments as senior vice president of
New York-based KCG Capital Advisors.
Families also must come up with a plan
for management post-investing and
appoint a leader because many of the
investments may not see profits or an
initial public offering for years.
Families participating in direct investments generally havent abandoned
funds altogether. They usually allocate 12
percent to 14 percent of their portfolio to
them, according to data compiled by the
Family Office Exchange, a network of private families with an average of $450 million in investable assets. They also have
10 percent to 12 percent of their assets in
private equity funds and the same proportion in real estate.
Kalvoda said families should consider
setting up a separate entity for these
co-investments as she did to make
sure their entire family offices arent
forced to register as investment advisers and therefore reveal financial details.
The registration requirement stems
from the Dodd-Frank Act of 2010 and
exempts family offices that are owned
and controlled by family members, dont
advertise or provide investment advice to
nonfamily investors.
The added effort to do direct investments is worth it because of the ability
to create scale and tap into each others
expertise, Kalvoda said.
With like-minded and friendly investors along for the ride, you can leverage
each others strengths, she said. When it
comes to negotiating, you ultimately carry
a bigger stick.
private equity
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19
PRIVATE EQUITY AND VENTURE CAPITAL

Worlds Rich Bullish on U.S. as Family Offices Open Outposts
BY MARGARET COLLINS
As the U.S. powers the global economic

expansion in its fifth year, the worlds rich
are counting on American companies to
help increase their fortunes.
At least a dozen family offices, with
fortunes made in Europe, Asia and South
America, have opened U.S. outposts in the
past two years or are making direct investments in corporations from Silicon Valley
to the East Coast. Their view is that the
Federal Reserves aggressive monetary
easing, a shale oil boom thats lowered
energy costs, and improving corporate
balance sheets give the worlds largest
economy an edge over other regions.
Peca Ltd., a London-based firm
started in the 1990s by a family that made
its wealth mainly in financial services, has
made about two-thirds of its private-equity
and venture capital investments in the U.S.
while reducing investments in Europe,
said Anselm Adams, who oversees the
firms alternative investments. A German
family that founded an automotive company opened an investment office in New
York this year to find deals in the automobile, textile or luxury industries, according
to a person familiar with the matter.
They are looking for diversification
and more exposure to the U.S., Patrick
McCloskey, managing partner at Aeterna
Capital Partners, said of the firms. Many
family groups are trying to manufacture
yield in a very low-interest-rate environment and are looking for unique and
customized ways to do so.
McCloskeys firm last year opened a
New York office for a rich European family
looking for deals in the U.S. In September,
he helped his client finance a videodistribution company with a loan that pays
the London interbank offered rate plus as
much as 11 percent.
Family offices manage $4 trillion in
assets globally, about 55 percent of which
is based outside of North America, according to a 2014 study by London-based
researcher Campden Wealth. Affluence
has grown fastest since 2013 in the U.K.,
Korea and Denmark, according to a report
this month by Credit Suisse Group AG.
The U.S. is a big bright spot in the
world, said Stephen Cecchetti, professor
of international economics at Brandeis
Average Family Office AUM and Total Family Net Worth

1,600
Assets Under Management

($M)
1,400
Total Family Net Worth ($M)
1,200
1,000
800
600
400
200
Global
Europe
Source: The Global Family Office Report 2014
International Business School in Waltham,

Massachusetts. As the Fed winds down
unprecedented stimulus, the European
Central Bank is contemplating its own
quantitative-easing program to tackle the
weakest inflation in five years, and Japan
is continuing purchases.
Peca has been attracted to venturecapital deals in the U.S., said Adams, who
declined to name the family he works for,
citing privacy reasons. The firm has taken
stakes this year in The Bouqs Co., an
online flower-delivery business, and Circa, a
mobile news service, Adams said. Both are
closely held companies based in California.
The family office generally invests $1
million to $3 million, working alongside
private-equity firms rather than through
funds because it pays no fees or carried
interest on co-investments.
One of the things weve been very
active in, in the last two years, is the
venture capital scene, Adams said in an
interview via Skype.
McCloskeys firm usually seeks equity
and lending transactions in companies
with enterprise values of $5 million to $100
million, he said, declining to name the
family sponsoring him for privacy reasons.
Aeterna helped finance RLJ Entertainment Inc., a Silver Spring, Marylandbased video content distributor founded
by Robert L. Johnson, because it liked the
North America
Asia-Pacific
Developing
Economies
business, management and risk-reward

profile, McCloskey said. Four other lenders were involved in the $70 million deal,
according to an RLJ filing.
Theres so much cash on the sidelines
ready to be put to work by families that
took money out in the financial crisis or
that have operating businesses generating a lot of income that they havent put
in the market yet, said John Benevides,
president of Chicago-based CTC myCFO
LLC, which advises family offices and is
a unit of the Bank of Montreal. They are
giving us a shopping list.
That capital has made finding bargains a challenge. Price multiples for U.S.
private-equity deals are the highest since
2007, and some transactions are being
done with less leverage as more equity
is being contributed to the average deal,
said Andrew Lee, head of alternative
investments for the chief investment office
at UBS AGs wealth-management unit,
which oversees $1 trillion. Those factors
may make it harder to see returns as
attractive as in the recent past, he said.
Were more cautious on allocating
aggressively to U.S.-focused privateequity opportunities, Lee said. On a
one-off basis there may be situations that
may make sense.
Valuations have also risen in U.S.
Continued on next page
20
PRIVATE EQUITY AND VENTURE CAPITAL
venture-capital deals, particularly for laterstage companies, Lee said.

One area where family offices find
opportunities are private companies looking for a new, private owner, said Francois
de Visscher, whose Greenwich, Connecticut-based firm advises single family offices
and family-owned businesses.
Every day, about 10,000 Americans
born between 1946 and 1964 reach retirement age. Many of them have built businesses, dont have an heir to take over
and want to sell, said Robert Elliott, vice
chairman at Market Street Trust Co., a
multi-family office established to manage
the wealth of the Houghtons, founders of
glassmaker Corning Inc.
The U.S. is a good hunting ground,
particularly with this generational shift,
Elliott said in an interview.
Some wealthy families from countries

like Colombia, Chile and Belgium have
even established single-family offices in
the U.S. with the intent of accelerating
their American direct investment activities,
said de Visscher.
More than 40 percent of the 330
members in the Family Office Exchange
are buying at least one private company a
year, said Sara Hamilton, founder of the
Chicago-based group.
The deals are part of a larger trend
among family offices to find investments
themselves. The number of family offices
seeking equity stakes or lending opportunities directly grew 45 percent this year
at Axial, an online network that connects
companies to capital, said Peter Lehrman, the New York-based firms CEO.
We get at least one call a month from
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a family company that is ready to sell and

wants to sell to another like-minded family
instead of a private-equity firm, said Hamilton, whose group is a network of private
families around the world with an average
of $450 million in investable assets.
The New York firm thats been investing
money for the German automotive family
was in talks earlier this year to buy a
family-owned business based in California, said the person familiar. The family is
looking for public or private companies in
the automobile, textile or luxury industries
with enterprise values between $250 million and $300 million. The transaction fell
through, the person said, because of the
sellers lack of speed in closing the deal.
It doesnt come without risks, Aeternas
McCloskey said of international investments. Its easier said than done.
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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.
There is a growing uncertainty about the

real state of the global economy and the
development of their asset values. There
is no doubt that the global economy is
weak despite the pursued zero interest
rate policy by many central banks. Investors and consumers alike increasingly
have the impression that the transmission
mechanism in the developed economies
is broken. Additionally, geopolitical risks
have started to trouble minds as well.
Given the fragility of the global economy, we are confident that the U.S. interest rates will remain low for longer. As the
corporate balance sheets are strong and
default rates low, we continue to like credit
and loans to yield-enhanced cash flows.
We are aware that leverage in balance
sheets has slightly increased, notably in
the U.S., but the interest coverage ratio is
reassuringly high. Based on this assessment, we aim to benefit from still-interesting spreads in the credit space, while
paying attention to duration risk.
We remain positive that the U.S.
economy will continue to grow at a
moderate pace over the next few quarters
and believe that the rest of the developed world will muddle through with little
support from emerging markets. We do
not foresee a strong beta market in the
coming quarters. Therefore, Marcuard
Heritage continues to prefer exposure in
equity long-short managers with a preference for managers who will have shown
stock selection skills. We expect also that
corporate action will increase as companies, notably those in Europe, will need to
BRIEF
reshape their businesses.

For a typical asset allocation, this
translates into a strong preference for credit
managers, long-short managers with a
global focus, event-driven managers and, to
a lesser extent, macro managers.
As a result, a model portfolio will maintain a high allocation to credit managers
with exposures to U.S. dollar, euro and
British pound credits and loans. In fact,
we overweight European loans as their
spread levels are more attractive when
compared with the respective U.S. loans.
Alongside long-only exposures to shortterm, lower volatility, high-yield debt and
investments with managers who focus on
senior secured loans, Marcuard Heritage
also invests in funds that utilize long-short
credit, event-driven and capital-structurearbitrage strategies regarding U.S. and
European companies. The beauty of
the latter is that these funds can quickly
adjust their net exposures dependent on
the prevailing market environment as the
managers trade actively.
In addition, we keep our exposure to
emerging market debt in hard currency
which as an exception to our general
view has longer duration risk as higher
yield levels (i.e. above 5 percent) should
compensate for the risk we take.
Secondly, we prefer equity long-short
and event-driven managers over straight
beta long-only equity managers, whose
allocation in the model portfolios are
minor. We prefer the versatility of active
hedge fund managers in this current
environment of increased volatility. The
chosen long-short managers run with
positive net-long exposures, i.e. we have
MANDATES,
notLAUNCHES,
selected a market
neutral equity &
PEOPLE
NEWS
manager
for the
time being. In addition, at
least some managers are willing to run
their books with a pronounced long bias
when deemed appropriate. We decided to
utilize the experience of seasoned Asian
fund selectors to cover our need for Asian
equity exposure.
The event-driven funds focus primarily

on mergers and acquisitions and special
situation equities. They have typically a
lower correlation to broad equity markets.
The geographical focus is also the U.S.
and Europe. If Europe should finally witness a stronger wave of corporate actions
with respect to mergers and restructuring,
we will be ready to deploy an additional
special situations fund.
Macro exposure via a discretionary
global macro fund allows us to better face
sudden shifts in the markets which we
witnessed over the last quarters, as we
assume that the markets will still undergo
further adjustments in the relative asset
pricing. Obviously, this investment capitalizes on fundamental trends in currencies,
interest rates, credit and equity markets in
both developed and emerging markets.
We currently still refrain from adding
CTAs or similar quantitative strategies. We
are still cautious that the massive price
distortions inflicted by the zero interest rate
policies of central banks may continue to
hamper their price signal algorithms. Having
said that, we have also noted that performances of managed futures recently started
to recover as market volatility increased.
Likewise, we do not allocate to commodity-related funds as sluggish global growth
and secular excess supply tend to hamper
any price advances.
With the current allocation, we are confident to achieve our goals for our customers
with rather conservative risk profiles, i.e.
to continue to provide positive compound
return while managing the downside risk.
Marcuard Heritage is a globally operating
wealth manager offering discretionary portfolio
management and wealth planning to high-networth clients. All the funds proposed for the
model portfolios go through a stringent due
diligence process with equal emphasis on the
investment content and on the fund managers
risk management setup at all levels. Once
approved, the funds will be constantly monitored.
HEDGE FUNDS EUROPE
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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.
In 1982, Robert Parker published his

assessment of that year's Bordeaux
vintage in his Wine Advocate magazine.
Contrary to prevailing opinion, Parker
claimed that 1982 was a stellar year
and, as he was proved spectacularly
right, made his name as a result. Of more
significance was that his 100-point scoring system became widely recognized
and, after years of esoteric, confusing
and sometimes downright peculiar tasting
notes, made it possible for wines to be
compared with a simple number.
A key side effect of attaching numbers
to wine was that, almost immediately,
wine became much easier to trade. Thirty
years on, the sophistication of today's
fine wine market has surely exceeded
anything that Parker or indeed anyone
else could have foreseen.
This has particularly been the case with
Bordeaux, partly a product of the 'Parker
Effect' and partly because the various
chateaux produce enough wine to generate
meaningful secondary trading. Fine wine
even has its own market, the LivEx Fine
Wine 100. In recent years, a number of specialist wine funds have been established.
Following ever-greater interest from
China, and with two superb Bordeaux vintages in 2009 and 2010, the index peaked
at 365 in June 2011. However, after poor
growing conditions leading to less attractive wines in 2011 and 2012, the LivEx has
plunged about 35 percent and is currently
trading at the 237 mark.
Confidence in the secondary market
also took a knock, with the revelations
at the New York trial of Rudy Kurniawan,
recently convicted of selling counterfeit
wine valued at millions of dollars. Savvy
collectors had paid significant sums to
buy from Kurniawan's collection, and
the industry was shocked to find that the
bottles of such legends as Mouton-Rothschild 1945 and Petrus and Cheval Blanc
1947 were, in fact, a cocktail of other less

exalted wines. Caveat emptor indeed.
While claims that a holding in fine wine
is an essential part of any self-respecting
investor's portfolio can be taken with a
pinch of salt, wine nevertheless represents an opportunity for those with a
little knowledge and enthusiasm. For the
wine-lover who can afford to ride out the
ups and downs (and who might be willing
to drink up if they incur a loss!), an investment in wine is in fact very attractive from
a tax point of view.
Fine wine is usually purchased "in
bond" i.e. retained in HM Revenue &
Customs-approved warehouses rather
than delivered direct to buyers. No excise
duty (2.04 pounds, or $3.30, on a bottle
of table wine) or value-added tax (paid on
the wine and the excise duty) are payable
until final delivery. So, if wine is sold while
it remains in bond, then neither excise
duty nor VAT is ever paid by the seller.
Even if in bond, though, wine still forms
part of a person's estate for inheritance
tax purposes. A wine costing 40 pounds
in bond would incur total tax of 10.45
pounds on withdrawal, an effective cost of
more than 25 percent. This saving is thus
clearly worth securing.
Most wine is likely to be exempt from
capital gains tax on any increase in its
value. CGT is not charged on wasting
assets which, for tax purposes, means
anything with a 'useful life' of less than
50 years. This is calculated from the point
at which it is first owned by the seller; so
a mature Bordeaux (1970, say) bought
today would be unlikely to last another
50 years. If one were to buy a top wine
from a great recent vintage then it probably would have a useful life of at least
50 years, in which case any growth in its
value could be subject to CGT on sale.
Even then, there are exemptions available before any CGT becomes payable.
If one bottle of wine is sold for less than
6,000 pounds, no CGT is due.
Since there are very few that will
change hands for anything like that sum
(most of which will be rare red burgundies
made in miniscule quantities), single
bottles can usually be sold tax-free.
Several bottles sold to the same
individual may, on the other hand, be
treated as a set and assessed on their

collective value if they are "similar and
complementary" i.e. from the same vineyard and made in the same vintage. Fine
wine tends to be sold by the case, so for
some prestigious wines, the 6,000-pound
threshold may easily be exceeded. A
12-bottle case of any of the most famous
wines of Bordeaux, Burgundy and California (think of Screaming Eagle, a collector's item that generally changes hands
for 2,000 pounds a bottle) would normally
sell for at least this sum, certainly in a
good vintage. Collectors tend to prefer to
buy wine by the case since that tends to
indicate better storage, and so the premium price it attracts could outweigh any
tax disadvantage. Even if a taxable gain
is realized, each person has an annual
exemption of 11,000 pounds to use before
any CGT is payable. A canny seller could
therefore spread his really valuable sales
over a few years if necessary.
Things become less certain when working out how to tell if your wine (bonded or
not, individual or case) actually will last 50
years, depending on:
The type of wine (sweet and fortified
wines last longer; drinkable Sauternes from
1811 can occasionally be found at tastings);
The quality of the vintage (there is
plenty of Rioja still going strong from as
long ago as 1925); and
The quality of the wine itself (anyone
fortunate enough to taste Hermitage La
Chapelle 1961 will quickly realize that it
may very well outlive them).
HMRC's view is that a wine "is not a

wasting asset if it appears to be fine wine,
which not unusually is kept (or some
samples of which are kept) for substantial
periods sometimes well in excess of 50
years". Sometimes this will be obvious but,
in any case where there is room for doubt,
it would be wise to seek specialist advice
from a reputable wine merchant.
Taylor Wessing is an international law firm, offering
legal services to individuals, families and family
offices who require multijurisdictional advice
on personal wealth structures, international tax
planning, commercial and real estate investments, reputation management and immigration.
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.
Q: In your work with family offices, are

you seeing more investors from overseas buying New York City property?
Whats drawing them?
A: The investors are sovereign wealth
funds, corporate pension funds and highnet-worth families. In Asia, family offices
would be the families behind the conglomerates such as industrial
and technology companies
in Korea. They are looking
at commercial buildings.
They are looking at both the
typical commercial building
you will find in a gateway
city Los Angeles, San
Francisco, Boston, New
York, Washington, D.C. or
multifamily, apartment-type
buildings because of interesting demographics we are
beginning to see.
There is not a lot of office
space that is coming online.
It is projected over the next
two or three years that the
overall growth in supply
in the commercial office market is only
going to be around one percent. In the
early 2000s, 40 percent of first-time home
buyers were buying single-family homes
in the suburbs. Now with the increase in
the cost of single-family homes, higher
unemployment rates, all of the kids out of
school saddled with student debt, that 40
percent has dropped to 27 percent. Those
are the dynamics driving the multifamily
and the commercial marketplace.
Investors are buying because the

market technicals are positive in terms of
occupancy, consistency of cash flow and
eventual price appreciation. Investors are
seeing this wall coming and that is rising
interest rates. Instead of taking a hit with
rising interest rates, they are looking at
real estate as a bond surrogate, particularly where they can get cash flow or an
interest payment like a bond. They see it
as an inflation hedge. They firmly believe
that interest rates will be rising here in the
U.S. versus other countries and therefore
the dollar will be much stronger than their
own home country currencies.
Q: Are they interested only in Manhattan? What other boroughs and cities
are they looking at?
A: Manhattan is what they understand.
We once asked that question and they
said I fly into JFK, I take a taxi and I
stay in Manhattan. I wont take a train or
subway to Queens or the Bronx. I understand Manhattan. They feel it is a very
else, like construction financing?

A: They will not do construction financing. What they really want and care about
more so than anything else is the ability
to extract the cash flow. They want the
coupon element. If they have the ability,
they can get a combination of an equitylike return on a portion of their investment,
plus the coupon. It is an established
building they care about. They care about
the rent roll and they care about the loan
to value so that the underlying transaction
when they do buy a building has enough
cash flow to effectively cover the interest
cost of the financing. Their rule of thumb
is 1.3 times in terms of cash flow versus
what the interest cost would be.
Q: Have we had all-cash deals?
A: Yes. The transactions we are looking
at one in the Washington D.C. area and
a second one that were in the process
of getting agreements for are all cash.
Now what does that mean? All cash
means that the investors themselves are
providing the capital for the
purchase of the building.
There is no bank financing
whatsoever.
"Investors are seeing this wall coming and that is

rising interest rates. Instead of taking a hit with
rising interest rates, they are looking at real estate
as a bond surrogate, particularly where they can
get cash flow or an interest payment like a bond.
They see it as an inflation hedge."
Tim Ng, Clearbrook Global Advisors
stable area. Boston, Washington. They are

looking at San Francisco. They are beginning to branch out into other cities they
would consider major cities and/or growth
cities such as Chicago, Austin, Texas.
Q: Investment in the properties does
it come in the form of purchasing a
hard asset, or does it take the form of
buying securities backed by commercial real estate debt? Or is it something
Q: Do you expect more

banks to sell off their
buildings and physical
properties in response to
changes in the regulatory
environment? Will these
be mostly in the form of
lease-backed deals?
A: A number of banks and
financial institutions are
under tremendous pressure
from regulators to lower the
overall risk on their balance
sheets and are raising tier
one and tier two capital. So, what is an
easy way for them to do so? It is to look
at all of the real estate they own around
the country and have selected buildings
they can sell and take off of their balance sheets. What the buyers like is that
the bank has owned the building for two
decades; they want to make sure the bank
is still the main tenant and they may hire
them as a property manager to manage
the building as well.
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.
Q: Are family offices interested in

buying property in London?
A: Interest in prime London residential
property has remained constantly high
over the last 12 months. We are also
seeing a prevailing trend on the commercial side, with several new high-net-worth
investors looking to enter this market.
London continues to remain the city of
choice for international investors on the
lookout for prime commercial, residential and mixed use assets. This trend is
reflected in recent research by CBRE,
which attributed 72 percent of all investment in central London office space over
the last quarter to overseas investors. We
regularly see investment coming into the
capital from across the globe, with prime
assets being purchased by Asian, Middle
Eastern and North American buyers.
Q: What is drawing them to London?
A: Global geopolitical risk is on the
increase and high-net-worth individuals
wish to place their assets and families
in safe jurisdictions. London is a leading global city financially, culturally
and socially and the U.K. benefits
from a stable political landscape along
with a world renowned legal system and
transparent tax codes. Unlike some of our
European competitors, there is no tradition of introducing retrospective legislation
to increase the overall tax burden.
Q: Is the demand in residential?

A: We are now seeing investment being
spread from the purchase of high-end
residential properties for personal use,
to value add opportunities. Investors are
seeking retail, office, hotel and residential
development opportunities where capital
growth is predicted over a three- to fiveyear period.
When it comes to investment strategies, global investors differ in their
thinking. Middle Eastern investors are
relatively unique in that once they have
acquired a property they tend to hold
onto it for many years and generations.
The Far East and China markets are not
yet in the same league as the Middle
East or Russian markets, and have yet
to embrace the concept of a family office
and/or structuring. There is though still a
significant appetite for commercial real
estate from these markets whether
due to portfolio diversification or in some
cases political instability.
Q: You mentioned investments in
hotels Why this particular type
of asset?
A: Hotels is a sector ripe for international
investment. However there has been a
notable change in the type of asset being
acquired. In days gone by, the stereotypical high-net-worth investor from the
Middle East would acquire a luxury hotel
in one of the key cities, such as London,
Paris or New York as part of their global
portfolio of luxury assets with yachts,
mansions and private jets. The purchase
was driven more by the kudos of owning
a five star hotel perhaps operated by
one of the luxury brands such as Four
Seasons or an iconic landmark hotel
such as the Ritz in Paris rather than
focusing on the underlying commercial
rationale. Often these purchases would be
spontaneous, ad hoc and not part of any
defined strategy.
Q: And that's not the case anymore?
A: No. Whilst this clichd view may still
be true in a limited number of cases, it is
now very much the exception to the rule.
Today's high-net-worth investor looking to
invest in a London hotel will, one, come
from a wide geographical base. Qatari
and Asian investors have been particularly

active purchasers of hotels over the past
couple of years.
Secondly, they are far more discerning and views the acquisition of a luxury
hotel as an investment and not just a
purchase. Today's high-net-worth investor
is savvy and well-advised; they are able
to invest in a multiple of asset classes.
Along with many other sophisticated
investors, they view hotels as an attractive option, since it is an investment in
both the real estate asset as well as the
underlying hotel business.
Thirdly, they are willing to play the role
of the developer as well as the ultimate purchaser. And last, they will also
consider investing in hotels outside the
traditional gateway cities of London, New
York and Paris, to many European cities,
as well as European resorts and secondary regional locations
It is also fair to say that one thing still
holds true. High-net-worth buyers of hotels
are not active sellers. They are purchasing the assets as a long term hold and
perhaps also for future generations. This
has in turn, led to a shortage of supply for
purchase in a number of destinations, and
possibly helped to promote the development of even more luxury hotels.
Q: Does the investment come in the
form of buying the actual property?
A: The investment in residential property tends to be the outright purchase of
the actual property, although once the
purchase price exceeds 5 million pounds,
and if the current ownership is a corporate
vehicle, this is an attractive option for the
sophisticated purchaser to save on Stamp
Duty Land Tax. It has been known for the
Far East buyers to "flip" the contract on a
new build before actual completion and
therefore this could be seen to be a form
of investment. The developers have got
wind of this and are now, if the contract
allows, requiring the buyer to seek consent to any assignment of the contract
and, in some cases, a share in the uplift.
On the commercial side, whilst typically
direct investment has been the trend,
there is an increasing number of investors
who are looking to invest by way of providing alternative forms of finance.
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
Jerry Parks, partner and head of real estate

at law firm Taylor Wessing, and Henry Faun,
surveyor in the International Residential
team at Knight Frank LLP, Dubai, speak to
Bloombergs Darshini Shah about why Dubai
property is an attractive investment for family
offices and high-net-worth individuals.
Q: Are family offices interested in

Middle Eastern property?
A: Family offices and high-net-worth
individuals are still very much interested
in investing in Middle Eastern property.
Throughout the whole of the Middle Eastern region, it is estimated that there are
currently circa 7,000 ultra-high-net-worth
individuals and by 2023 there will be 9,500.
In the region it is estimated that around 21
percent of their portfolios are allocated to
real estate. There are a significant number
of both family offices and their principals
considering real estate as an investment
both at present and in the future.
Q: What particular regions are attracting their interest?
A: Recent troubles in surrounding areas
have served to highlight the relative stability
of the United Arab Emirates, within which
Dubai's varied property market has proved
attractive. Qatar may be knocking on the
door, but its recent appearance on the world
stage, with local legislation playing catch up,
makes it less tried and tested than the UAE.
In the Middle East, high net worth
individual's hub businesses are predominantly located around the cities of Dubai,
Abu Dhabi, Doha and Istanbul. The latter
city may seem less obvious; however, one
legacy of the Arab Spring is the enhanced
status of Turkey as a safe haven location
for investors from the Gulf and North Africa.
Between 2013-2023, Knight Frank's
Wealth Report forecasts that ultra-highnet-worth individuals (those with $30
Q: Is it the residential sector they are

interested in? Or commercial such as
offices and hotels?
A: All sectors are available to foreign investors. Commercial developments continue
to come on stream, but the strata structuring of many office premises makes them
unattractive to large scale investors. Hotels
are booming in Dubai, but the restrictions
on foreign ownership outside designated
areas means that the choice can be limited.
Residential property continues to offer the
most variety in terms of location and quality,
as well as allowing an investment that can
be utilized by the investor. Middle Eastern
investors may consider a portfolio comprising both commercial and residential assets,
as offices, retail, development land and
hotels all of are also of particular interest.
Dubai's office market has a large
amount of supply; however, much of this
is of secondary quality. This provides highnet-worth individuals with the opportunity
to invest in a pre-let development as the
local economy continues to strengthen.
Residentially, when compared on a global
scale, $1 million will purchase about six
times more luxury residential property
than in London and 10 times more than in
Monaco, making it an attractive investment for high-net-worth individuals.
Q: What are the main concerns of
investing in Middle Eastern real estate?
A: It is fair to say that a concern for all
investors in Dubai real estate is the
inheritance position and the application or
otherwise of Islamic Sharia law. The position has become clearer in recent years,
with the local courts recognizing the wills
of non-UAE nationals in most cases. But
that position cannot be guaranteed, and circumstances of intestacy still leave investors
vulnerable to the application of Sharia law.
Where Jebel Ali Free Zone (JAFZA) offshore companies are involved, individual
shareholders face the same inheritance
issues because the devolution of their
shares would fall within the ambit of the
local courts. The preferred approach, from
an inheritance perspective, is therefore
to structure the investments through a

JAFZA offshore vehicle which is in turn
owned by a traditional offshore vehicle. In
that way the inheritance issue is removed
from the local jurisdiction completely.
The succession position changes on
an almost monthly basis, but the latest
news is positive. The locally established
common law courts of the Dubai International Financial Centre have recently
announced that they will next year be
introducing a facility to register wills
dealing with Dubai assets, including real
estate. The aim is thereby to render such
wills directly enforceable through the
Dubai courts. Watch this space
In addition, whilst there have been
recent legislative changes to cool the
Dubai market, there is still margin for
speculation in the real estate markets. The
flipping of off-plan property is still possible and can potentially create unnatural
inflation to market prices and therefore
potential concerns for later correction.
Q: Why should one invest in Middle
Eastern real estate?
A: First, there is a wide variety of real
estate available, at all levels of the market,
in both residential and commercial sectors.
The conveyancing process is relatively
straightforward, provided you have experienced legal advisers on board and the
transfer fee/stamp duty is still lower than in
many countries in the world, at 4 percent of
transaction value. In addition, there are no
inheritance or capital gains taxes payable
locally, and neither is there any local tax on
rental income. The anonymity of owners is
generally respected, and trust structures
can be accommodated, provided they are
at an offshore level.
At the crossroads between Asia-Pacific,
Europe and Africa, Dubai is a growing hub
for global property investment flows. Geographically, investment into Middle Eastern
real estate can be seen to be relatively safe
as it benefits from continuous trade between
the east and western markets. In Dubai, real
estate investment can also be combined with
significant potential return on the investment.
Through the whole of 2013, the mainstream
residential market in Dubai grew 35 percent
year on year, thus provided strong returns for
HNWI investors with exposure in the market.
Philanthropy
& Impact
Investing
BY THE NUMBERS
27
BY DARSHINI SHAH & PEKKA AALTO
PHILANTHROPIC ENGAGEMENT (%)
Globally, family offices not only engage in philanthropy,

but do so with a clear focus, according to the Global
Family Office Report 2014, published by Campden
Wealth, in conjunction with UBS.
While European family offices have the highest proportions of AUM dedicated to philanthropy, Europe also
has the highest proportion of family offices that have no
involvement in philanthropic engagement.
In absolute terms, a family office in North America will
give the largest philanthropic endowment ($61 million),
compared with $18 million from a family office in the
Asia-Pacific region.
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
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
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%
OFFICES THAT OUTSOURCE PHILANTHROPY

TO EXTERNAL SPECIALISTS (%)
61
30%
EUROPE
ASIAPACIFIC
13%
11%
NORTH
AMERICA
18
20%
GLOBAL
37
ASIAPACIFIC
EUROPE
NORTH
AMERICA
40
DEVELOPING
ECONOMIES
42
GLOBAL
29%
DEVELOPING
ECONOMIES
AVERAGE PHILANTHROPIC ENDOWMENT

OF THE FAMILY OFFICE ($M)
28
PHILANTHROPY
Taylor Wessing's Hussain, Hine Discuss the Benefits and Challenges of Philanthropy
Mustafa Hussain
Andrew Hine
Mustafa Hussain, partner in Private Wealth, and

Andrew Hine, head of Private Client, Taylor
Wessing, speak to Bloombergs Darshini Shah
about the tax benefits available to family offices
in their philanthropic activities and whether there
are any cross-border matters to think about.
Q: Why should family offices think

about philanthropy?
A: Philanthropy can be a satisfying and
positive channel through which families
elect to fund a particular organization
which shares a common set of objectives
and values as that of the family.
Charitable giving can also unite different
generations within families, establishing
common ground and values, whilst opening
a dialogue to promote shared interests. It
provides a democratic forum for the discussion of new ideas and attitudes, the passing
down of traditional family values and the
opportunity to establish a framework of continued donations by future generations.
The process can also serve to prepare younger generations for wealth and
responsibility, by developing their business skills and their understanding of
financial stewardship, within the context of
accumulated family wealth.
Q: What are the challenges?
A: Some families can be deterred by the
worry of complicated administration and
process. It is not often a straightforward
procedure. Collaboration within the family
can sometimes lead to disagreement,
particularly with reference to the donation
amount and the charity to which the donation is made. Another point to be aware of
is any relevant regulation which could apply
to charitable donations and to bear in mind
potential questions which could be posed
by tax authorities and charity regulators.
Q: Is it as simple as giving money to a

university or charity?
A: The family should clearly establish, with
the recipient, the purpose of any grant to be
applied and confirm that all funds which are
not used for the specified purposes should
be returned to the family. To ring-fence
donations, it is sensible to also request
that funds are held in a separate account,
specifically dedicated to the purposes.
To monitor the application of the grant,
the family should request that the recipient
entity regularly provides reports and records
for assessment by the family. These could
include annual reports detailing the use of
the funds, reports detailing the extent of
progress in accomplishing the purposes
and/or records of receipts and expenditures.
The family may also wish to request notifications from the recipient when all funds
have been spent, there's any change in
the charitable status of the recipient entity
and/or there is any delay or cancellation
in respect of a specific project to which a
donation is intended to apply.
Q: Are there any cross-border matters

to think about?
A: If a family foundation is attractive, it
would usually be sensible to use a charitable company or charitable incorporated
organisation as the trustees of these
vehicles are akin to directors and can be
drawn from around the world, whereas
trustees of a charitable trust hold the
assets themselves and may be scrutinized by their local tax authorities.
Every country has its own system of
tax relief and these rarely complement
each other, a prime example being U.S.
citizens living in the U.K. Donations to U.K.
charities do not qualify for relief against
U.S. tax and donations to U.S. nonprofits
will not qualify for U.K. gift aid.
Q: How can family offices make the

donation tax-efficient?
A: The U.K. offers generous tax relief to
charitable donors. The gift aid system
grants U.K. taxpayers relief on their gifts,
reducing their tax to the basic rate on the
sum donated and the charity can reclaim
this remaining tax back from the Treasury.
There is limited carry back and no carry
forwards so taxpayers wanting to make
substantial endowments should ensure
that they have sufficient income and gains
during the year to take advantage of the
relief. Care should be taken and gifts staggered over several years to ensure that
there is always sufficient income and capital
gains tax to cover the relief claimed. This is
one situation where a family foundation can
be extremely helpful as it allows donations
to be made in a year when a family member
receives a substantial bonus or makes an
extraordinary capital gain, but the benefits
can then be paid out to particular charities
over the following years or decades.
Individuals with investment portfolios,
particularly those standing at a substantial gain, can often benefit more by
donating the investments. The capital
Q: Is it possible to establish a charity

that qualifies for relief in both countries?
A: Yes, but this is extremely difficult and it
is often easier to use an existing conduit such as the American Donor Fund
operated by the Charities Aid Foundation.
Similar problems exist for U.K. residents
wanting to benefit foreign charities directly
and often, it is sensible to funnel these
gifts through a U.K. charity, which can then
pass on the monies for specific projects
that would be considered charitable here.
The situation is slowly improving within
the EU following the 2009 Persche judgment of the European Court of Justice. The
ruling requires EU member states to give
tax relief for donations to any charity established within the EU provided that charity
meets all of the criteria required in the
donor's own country. The U.K. tax system
was changed to implement this ruling in 2010
and now any EU charity can register for U.K.
gift aid provided their activities are charitable
under the English definition and the management meet a 'fit and proper persons' test.
However, few member states have been as
quick to recognize the decision and the EU
is still a patchwork of different systems.
gains on the investments are exempt and

the donor receives 100 percent tax relief
on the value of the gifts to set against
their income for the year. In this case, the
donor receives the full benefit of the tax
relief rather than sharing it with the charity.
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.
Q: What is impact investing and how

does this differ from responsible
investing?
A: Impact investing is where investors
proactively seek social or environmental returns alongside financial ones. It
means investing in sustainable growth
and social change through proven
market solutions, and family offices are
increasingly allocating capital in this
way. Responsible investing is investing in funds or businesses that are
ethically aligned with a familys values
and aims, and screening companies
for negative environmental, social and
governance issues.
Q: Can you give examples?
A: Impact investing could range from
investing in a company that crowdfunds
student loans for young people who have
been accepted to university but cannot
afford tuition to buying equity in a superfood brand that creates sustainable livelihoods in sub-Saharan Africa. The World
Economic Forum predicts that the global
market will reach $1 trillion by 2020 after
already reaching $25 billion in 2013.
Q: Why should family offices be
involved in this?
A: Wealthy families in the U.S. have
been key to driving the growth of impact
investing, with leading voices from the
Rockefeller Foundation and the Omidyar
Network particularly. Family offices are
also getting more involved across Europe,
where impact investing can form part of
a long-term investment strategy. Indeed,
Mark Houghton-Berry, non-executive
director of London-based multifamily
office SandAire, says impact investing is a

natural fit for family offices.
Q: There are some, such as the 100%
IMPACT Network a group of family
offices, foundations and high-networth individuals led by Charly and
Lisa Kleissner that are committing
100 percent of their assets to impact
and building a diversified impact portfolio across multiple asset classes.
A: Yes. They intend to demonstrate that
this sort of portfolio construction is not
only possible, but can actually deliver
competitive financial returns. While some
families are focused, then, on demonstrating market-based returns, others
who approach it from a philanthropy
standpoint can take on higher risk for
higher potential impact.
Q: Do the returns from impact investing actually meet expectations?
A: A report from JPMorgan says that
89 percent of impact investors say their
investments are meeting or exceeding
financial expectations. So, the conversation about long-term wealth and sustainability is shifting. Family offices are not
necessarily leading the charge to impact
investing; private individuals and foundations have been at the forefront of this
growing trend but as it grows, family
offices need to understand its potential
and its challenges, to help their clients
invest in the long-term.
Q: Are there any barriers to impact
investing?
A: Regulation is a factor that is perhaps
slowing the growth rate of impact investing in the U.K. In some cases, advisers
may find it more prudent to advise a
grant rather than an impact investment
in this early-stage market due to the
regulation and added complexity of an
investment in contrast to a grant. The
success of mission-related investing
by Foundations, including Family Office
Foundations, however, suggests there is
a place for high-risk seed capital to be in
the form of grants or donations, with less
regulatory strain for the family, and then
for impact investment to follow once the

business or charity has demonstrated
their revenue potential and proven
their concept.
Q: Any other barriers?
A: Family office managers have highlighted
the issue of the push for a common language in talking about this area. Having so
many competing terms social investing
versus impact investing, for example
can alienate families and advisers trying to
make sense of this new trend.
Due diligence, particularly for earlystage impact investing, can also be a
significant cost to advisers and individuals, with multifamily offices able to provide
additional support in this area. One key
issue is finding the right kind of deals;
advisors find that many of the high-impact
companies looking for capital will not
necessarily be out searching for impact
investment because they have already
found it through traditional capital raising;
they are meeting a genuine market need
and have real commercial potential.
Q: Is there more of an impact when the
idea of impact investing is generated
from an individual or family itself?
A: Yes. Melwin Mehta, who runs a
single family office, says that when he
talks about impact investment in the
abstract, its very easy for the enthusiasm to die down. So, its important to
find something that speaks to their very
personal concerns as a family social
or environmental issues that they care
deeply about.
Q: Does the enthusiasm last from one
generation to the next?
A: Many advisers find that impact investing can engage next generation investors,
who enjoy the values-driven nature of
impact investing and the sustainable alternative it offers to philanthropy. Older family
members, too, find that impact investing
can be an education tool and engagement tool, a way of helping younger
generation family members express the
familys values and aims for their wealth
beyond simply profit maximization.
30
IMPACT INVESTING
Case Backs Brain Device as Wealthy Push Do-Good Investing
BY MARGARET COLLINS
Researchers in Bethesda, Maryland, have spent eight years

developing a handheld device to quickly assess potential brain
trauma in injured U.S. soldiers and athletes with concussions.
Jean Case and her husband Steve, who co-founded AOL Inc.,
invested in BrainScope Co., the devices developer, through their
family office in 2008. The billionaire couple say they are using
some of their fortune to help ease some of societys ills while
hopefully making a profit. They committed in June to spend $50
million in the coming years on mission-driven investments.
A new generation of investors is emerging that wants more
than just a financial return, Jean Case said in an interview. Billions more will go into it.
With private wealth at a record, rich investors such as the
Cases, members of the Pritzker family and Pierre Omidyar are
increasingly looking for ways to put their money to work and do
good. Its an investing niche previously limited to a sprinkling
of mutual funds that avoided stocks such as tobacco and gun
manufacturers. The number of money managers offering impactinvesting products has surged 155 percent in the past five years.
Impact investing is still a fraction of the record $152 trillion that
the worlds richest had at their disposal last year, according to the
Boston Consulting Group. It represents less than 1 percent of that
pool, or an estimated $46 billion, according to a May report by
JPMorgan Chase & Co.
The impact-investing market may reach $1 trillion by 2020,
according to a 2010 report by JPMorgan and the Rockefeller
Foundation. The investments are a needed addition in tackling
social and environmental challenges in tight fiscal times, said
Judith Rodin, president of the Rockefeller Foundation and coauthor of The Power of Impact Investing.
Theres not enough capital in the world to solve the big problems with just philanthropy, she said.
Fund managers raised $2.8 billion for impact investments in
2013, and the target this year is $4.5 billion, according to the May
JPMorgan survey of 125 such investors. Pension funds and insurance companies were the largest source of capital followed by
family offices and wealthy individuals, according to the study.
Families and foundations are now putting capital behind it at a
scale that matters, said Adam Wolfensohn, managing director at
New York-based Wolfensohn Fund Management and son of a
former president of the World Bank, James Wolfensohn.
Adam Wolfensohn manages his family offices impact-investment strategies, and his firm also runs a $250 million impactoriented fund for investors. Its invested in renewable energy and
companies such as Ujjivan Financial Services, which lends to
poor women in India.
The phrase impact investing was coined in 2007, according to
the Rockefeller Foundation. Proponents say it differs from socially
responsible investing because people seek companies they think
will make them money and improve society, rather than shun certain ones. The causes that impact investors have backed range
from a water project in Africa to a venture capital fund with stakes
in companies such as electric carmaker
Many venture capitalists and money managers have invested
Source: BrainScope Co.
BrainScope is developing the technology to detect the potential for brain

traumas in soldiers, athletes and others.
for decades in startups or companies that aim to solve world

problems but without the label, said Katherine Lintz, chief executive officer of Matter Family Office.
Our concern is this marketing hype of everyone wanting
impact in the name of their funds, said Lintz, whose firm manages $2.7 billion for families. The social impact should be looked
at after the investment hits on all cylinders.
Among the wealthy, investors include billionaires Omidyar,
founder of online marketplace EBay Inc., and EBays first president
Jeff Skoll. J.B. Pritzker announced last year that the J.B. and M.K.
Pritzker Family Foundation was investing with Goldman Sachs
Group Inc. to provide preschool education to children through loans.
The demand for investments with an impact has helped push
the number of money managers with mission-related investment
products to 421 in 2013 from 165 in 2008, according to data
compiled by Cambridge Associates, which provides consulting
services to family offices and private foundations. Banks including
UBS AG, Goldman Sachs and Bank of America Corp. now offer
social-impact bonds that finance programs to improve education,
prison rates or the environment.
Jean Case, who is CEO of the Washington-based Case
Foundation, declined to comment on the total amount that her
family office and foundation have devoted to such so-called
impact investments, or on their performance. The Cases impact
investments have mainly been in early-stage, closely held businesses, she said.
At BrainScope, scientists including Leslie Prichep of New York
University School of Medicine are using a database of brainwave
recordings to create algorithms that would quickly spot abnormalities in brain functions, said Michael Singer, the companys
president and CEO.
An initial focus is detection of traumatic brain injuries in U.S.
soldiers. The company gave the military a prototype, smartphoneContinued on next page
31
IMPACT INVESTING
Source: Jonathan Alcorn/Bloomberg
based system this year, Singer said in an interview. The device,

which was cleared in November by the U.S. Food and Drug
Administration for commercial use, aims to non-invasively assess
if someone has a brain injury that could need treatment.
Theres a tremendous amount of economic opportunity, Singer
said. You can really help the world and you can do really well.
Jean Case is a member of BrainScopes board of directors.
Her familys investment was made through Revolution LLC,
which was the couples family office at the time and is now Steve
Cases investment firm. The firms funds, Revolution Growth and
Revolution Ventures, arent investors in BrainScope, according
to spokeswoman Allyson Burns. The Cases have made bets on
other startups with their family money including car-sharing service Zipcar and LivingSocial, a daily coupon site.
Impact investors vary in their expectations for profit. Some
mandate impact first, meaning they will accept lower-thanmarket-rate returns in favor of a positive social outcome. Others,
like Case, usually expect competitive returns with broad market
indexes. About 35 percent of impact-investment funds target
returns above 20 percent, according to a 2013 report by the
World Economic Forum.
Charly and Lisa Kleissner have shifted almost all of their $10
million foundations assets to impact investments since 2005.
They seek market-rate gains for their KL Felicitas Foundations
Jean Case
assets, the couple said.

Family offices and private
foundations have led the
way in social-impact investing in the U.S. because they
generally have more control
over their assets and fewer
restrictions on performance
than pension funds and
other investors, said Raul
Pomares, founder of San
Francisco-based Sonen
Capital, which manages
Jean Case
$300 million in impact
investments including the
Kleissners.
Sonen has invested
the Kleissner foundations
money in different asset classes including public companies that
are vetted for environmental, social and governance guidelines.
The foundation also has put money with private-equity firms such
as Zouk Capital LLP, which bets on environmental companies
and has made direct investments in businesses including BioLite,
a manufacturer of cooking stoves that reduce air pollution globally.
From 2006 through 2012 the foundations impact investments
gained 2.56 percent annually, according to a report released by
Sonen last year. That compares with a 2.38 percent gain by its
benchmark, a weighted mix of broad-market indexes such as
the S&P 500 and Barclays Aggregate. The three-year annualized
returns were 4.4 percent for the foundation and 4.25 percent for
its benchmark.
Jean Case said more money will move into a range of investments that focus on social issues.
The $2 billion McKnight Foundation said in June that its
targeting $200 million in impact investments over the next five
years. Investments will focus first on transitioning to a low-carbon
economy and sustainable development in Minneapolis-St. Paul,
said Tim Hanrahan, a McKnight spokesman.
Its 100 percent capital loss when youre giving grants purely
through philanthropy, Case said. Then theres the range of
market-rate returns. We think there is room for investors to play in
that spectrum.
"A new generation of

investors is emerging
that wants more
than just a financial
return. Billions more
will go into it."
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December 2014|www.bloombergbriefs.

December 2014 bloombergbriefs.com

Bloomberg Brief | Family Office

A family office is, simply put, an office that caters to a family of

MaRkET LEadInG InTELLIGEnCE

December 2014 bloombergbriefs.com

Bloomberg Brief | Family Office

Bessemer CIO Braces Families for Geopolitical to Fed Upheavals

Equities 'Attractive Enough to Warrant Optimism,' Frank Investments' Sedgwick Says

Wealthy Families Move Toward Stock Investments, UBS Survey Shows

Smith & Williamson Bullish on U.S., European Equities

B Capital's Baring Bullish on U.S. Equities, Bearish on Precious Metals, Commodities

How Family Offices Differ From Other Institutional Investors

Hedge Funds: Marcuard Heritage to Maintain a 'High Allocation' to Credit Managers

Property: London's Hotels 'Ripe' for Investment by Family Offices

Property: Dubai a 'Growing Hub' for Global Property Investment Flows

Philanthropy & Impact Investing

Case Backs Brain Device as Wealthy Push Do-Good Investing

Family Office | December 2014

To subscribe via the Bloomberg

December 2014 bloombergbriefs.com

Bloomberg Brief | Family Office

HSBC Private Wealth

UBS Global Family Office

New York, U.S.

$25 for UHNW;

Atlantic Trust (CIBC)

New York, U.S.

Jupiter, Florida, U.S.

Oxford Financial Group

New York, U.S.

Commerce Family Office

South Pasadena, U.S.

ATAG Private & Corporate

New York, U.S.

New York, U.S.

Spudy & Co. Family Office

Fleming Family and Partners London, U.K.

Ascent Private Capital Management (U.S. Bancorp)

$50 net worth

San Francisco, U.S.

continued on next page

December 2014 bloombergbriefs.com

Bloomberg Brief | Family Office

2014 FIRM NAME

Baker Street Advisors

New York, U.S.

Laird Norton Wealth

Synovus Family Asset

Columbus, Georgia, U.S.

Clarfeld Financial Advisors

Tarrytown, New York, U.S.

San Francisco, U.S.

Athena Capital Advisors

Federal Street Advisors

Los Angeles, U.S.

Tolleson Wealth Management

St. Louis Trust

St. Louis, U.S.

Monitor Capital Partners

Seven Post Investment

San Francisco, U.S.

Norfolk, Virginia, U.S.

Marcuard Family Office

Bessemer CIO Braces Families for Geopolitical to Fed Upheavals

Equities 'Attractive Enough to Warrant Optimism,' Frank Investments' Sedgwick Says

Wealthy Families Move Toward Stock Investments, UBS Survey Shows

Smith & Williamson Bullish on U.S., European Equities

B Capital's Baring Bullish on U.S. Equities, Bearish on Precious Metals, Commodities

How Family Offices Differ From Other Institutional Investors

Hedge Funds: Marcuard Heritage to Maintain a 'High Allocation' to Credit Managers

Property: London's Hotels 'Ripe' for Investment by Family Offices

Property: Dubai a 'Growing Hub' for Global Property Investment Flows

Case Backs Brain Device as Wealthy Push Do-Good Investing