Family Haven: Ensuring Legacy and Values
As Head of Key Client Group for BNP Paribas Wealth Management, I have the privilege to meet and advise some of the most prominent families in the world on how to manage their wealth, financially of course, but also to make sure this money is well employed today and tomorrow.
Based on these multiple experiences, I want to share couple of trends I have noticed over the past years as I consider this world is also changing very fast, and explain the solutions we are bringing to make sure families will simultaneously ensure their own sustainable future and use their influence to make a strong positive impact on society.
https://group.bnpparibas/en/For decades, families-driven businesses have upheld the standards and the strong values behind the evolution and adaptation of most business sectors across Europe. These values continue to be the basis of their investment strategies and asset allocation, driving change at the heart of the global economy.
With the total assets under management globally directly owned by families and HNWI expected to reach close to $70 trillion by 2021, according to the EY Wealth Management Outlook 2018, families play an increasingly important role in the global economy and require increasingly complex services and assistance.
From my experience working with families and family offices, I know that this growth comes on the back of continuous increase in sophistication and expertise of families and their professional investment teams, but also of the need for families to control more closely their own investment portfolio.
Overweighting non-listed investments and including factors like impact as part of investment rationale, have been a new trend I have seen emerging from the families and their family offices.
Between 2008 and 2018, the number of single-family offices has increased tenfold to over 10,000, with most managing over $250 million. Family offices are now capable of conducting transactions that were traditionally the sole remit of large companies or private equity firms. Over the past few years, families and family offices have been executing direct investments and transactions as well as exerting influence on asset managers that reflects their sophistication and their values. In that respect, interestingly, family offices nowadays are becoming at the same time the largest investors in private equity managers – with an ever-larger share of their wealth allocated to private equity – and one of the most powerful competitors to these same asset managers through direct investments deals.
This dynamic is reflected in a series of key trends we experience in our daily interactions with families. In particular, I witnessed significant evolutions in how families invest, including overweighting of real estate and private equity portfolios and increasing exposure to impact and sustainable investing, while decreasing hedge fund exposure. This evolution follows closely the global economy in which investors act with each geography requiring an idiosyncratic strategy.
More than in the past, families increasingly complete deals amongst themselves, either because the origination comes from one of them or because they feel better associated with couple of their peers. Therefore, we have created the Leaders’ Connection, which is a proprietary mobile application that connects families across the world together and only opened to BNP Paribas Wealth Management clients, which gives this community a strong trust into other participants.
I know that asset allocation is only part of the story behind family wealth management, and not necessarily the most important one in their concerns.
Focus on legacy and transmission is a key tenet of family offices’ ambitions, drawing on a long history of wealth preservation and management tracing back to the middle of the 19th century. The Campden Family Awards, co-organized with BNP Paribas Wealth Management, recently recognized families and family offices that live up to such a high standard. This strengthened importance of long term planning and preservation of values and traditions plays a key role in any family’s vision for investments.
In that context, as heirs and the next generation increasingly come on board and play a key role in managing families assets and strategies, the investment horizon is evolving, with sustainable and impact investing becoming an important theme and attracting significant pools of capital from families with a long term investment horizon. I believe this trend is reinforcing the importance of families as driver of the change toward a more sustainable future. To that end, we have set-up a dedicated program, the NextGen Experience, hosted in Paris, Hong Kong and Silicon Valley focusing on helping our clients’ heirs to contribute to the sustainable development of our clients’ family legacy.
To deliver on their ambitions of growth and preservation of wealth with long –term horizons, family offices need to draw from the expertise and networks of key financial partners to ensure sourcing of transactions and customized management and securities services.
Our Key Client Group acts as a single gateway bringing to our family clients unique opportunities that correspond to their own values and investment perspective. From privileged access to the most prestigious players in the US Venture Capital and Private Equity industry, access and acquisition financing of real estates and shopping arcades , customized credit facilities, dedicated networking events through The Single Family Office Forums, we bring our clients the service they need when they need it. We leverage on the combination of dedicated relationship managers, access to the whole BNP Paribas Group, and a suite of digital tools that keep the control ever closer and real time to the families.
With over EUR 370 billion under management worldwide, we are proud to count many of the world’s best family offices as clients as they recognize our efforts to complement their long term vision and strategy and help them deliver on their legacy ambitions.
The success stories of our clients are the inspiration for us. They lead us in the way we conduct our business and we are proud to work with clients that share our values.