Non-traditional assets in practice

Case Study

 

Family Status

An entrepreneurial family set up and ran a successful furniture manufacturing business for many years, which they sold six years ago. A majority of the wealth arising from this sale has been ring-fenced for wealth generation and preservation. Much of this has now been centralised with a Family Office with the objective of growing it and planning for future generations. Some of this will be used for business opportunities (direct investments in private equity start-ups), reflecting the on-going risk appetite of the family. The clients plan to retire shortly and rely more on the Family Office to manage their assets. They have three children – two sons and a daughter – and several grandchildren.

Objectives

Overall, the clients want to provide financially for their children and grandchildren, sustaining the family wealth over generations. As entrepreneurs, they are keen to maintain a medium to high risk strategy with the ability to move beyond the standard assets that have previously been available to them. They have maintained contact with the banks that advised them on the sale of their business and wish to have access to asset classes not generally available.

Solution

Guided by the Family Office, the subscription to a Lombard International contract allows investment in a broad range of diverse assets including Real Estate funds and Private Equity opportunities. The Family Office maintains a clear investment strategy to achieve the clients' investment objectives by broadening their portfolio and accessing wider offerings from banks and fund managers. Beneficiary clauses reflect the clients’ wishes, identifying the children and respective grandchildren, allowing wealth to be transferred across generations whilst maintaining the trusted banking relationships.

Result

Access to alternative investments allows the clients and Family Office to achieve greater returns, beyond those offered by standard asset classes. The diversified portfolio allows the family wealth to grow and is combined with the ability to pass on assets to all three children and their families, centralised through trusted advisers.

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