Arthur A. Bavelas Family Office Insights
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ART & MUSEUM MAGAZINE INCLUDED FAMILY OFFICE MAGAZINE AUTUMN 2018 ISSUE ARTHUR A. BAVELAS FAMILY OFFICE INSIGHTS FAMILY OFFICES - UHNWI - WEALTH MANAGEMENT- PHILANTHROPY- LUXURY - LIFESTYLE Subscription €99 per year www.familyofficemag.com Private Banking. Sometimes 3 letters make all the difference Because you shouldn’t have to compromise to achieve excellence, ING Luxembourg offers you a full experience in Private Banking. Our experts in asset management, lending solutions, wealth analysis and planning keep up-to-date to offer you the most relevant advice regarding your overall situation. www.ing.lu/privatebanking ING Luxembourg, Société Anonyme – 52, route d’Esch, L-2965 Luxembourg – R.C.S. Luxembourg B.6041 ING_PB_A4_EN_def.indd 1 21/05/14 13:57 FAMILY OFFICE MAGAZINE FAMILY OFFICE MANULIFE FAMILY OFFICE FAMILY OFFICE IN GUERNSEY 21ST CENTURY BEATING THE BOND IN AFRICA 35 MARKET ING BANK ARTHUR A. BAVELAS MULTI FAMILY OFFICE INSIGHTS 05 19 FAMILY OFFICE SELECTION 37 ROLLS ROYCE LA PLAYA DEBRETT’S 39 BLACK BADGE MARINE SUCCESSION 17 INSURANCE FAMILY OFFICE 41 07 21 PHILANTHROPIC FAMILIES UNEXPLAINED MALTA BNY MELLON 43 WEALTH ORDERS ESTATE FAMILY OFFICE FAMILY OFFICES PLANNING FAMILY OFFICES 47 11 23 CITI PRIVATE BANK BIO-PRINTING BLOCKCHAIN PANDORA TECHNOLOGY AND CRYPTO- ART SERVICES 50 CURRENCIES GOLD RUSH ART & MUSEUM 13 FRANK CASEY 29 MAGAZINE 03 CYBERCRIME IN SUPERYACHT THE FAMILY OFFICE TAKING DOWN BUYING OR SPACE. CITI BANK BERNIE MADOFF SELLING? 15 25 31 1 2 FAMILY OFFICE MAGAZINE WWW.FAMILYOFFICEMAG.COM CUSTOMISATION OF RANGE ROVERS CUSTOMISED LUXURY AND CRAFTSMAN OVERFINCHA PILLAR IN LUXURY LIFESTYLE Founded in 1975, Overfinch has spent the past forty-three years building its legacy as the pre-eminent brand in the modification and customisation of Range Rovers. 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Remember that the risk of and others—should be balanced against the projected investments prompt many family office investors loss is always a genuine possibility. A cardinal rule to return to get a correct understanding of potential risks of all sizes to seek more diverse, and often elusive, remember: It’s easier to hold on to your money than it and/or reward. Consider that sometimes, you might choices to balance their portfolios. Increasingly, is to recover from a loss, so allow time to think about save more money with better tax planning than you family offices opt for unique and exclusive your investment ideas. Fully comprehend the growth might earn on a particular investment. For early-stage investment opportunities that can provide a better potential vs downside risk and the time to recovery. investment opportunities, give special consideration match for their objectives. to the risks of the particular industry, and your level Rule #5: Don’t Lose Money of confidence in the management team to overcome These opportunities feature the typical private Recovering from a loss is much harder than holding on them. equity and hedge fund offerings but also include to the money in the first place. Very often, things don’t private debt financing, real estate, internet coin develop quite as you expect. Let’s say you exit your Rule #7: The Best Strategies Adapt to Changing offerings (ICO), venture capital and angel rounds, $100,000 investment at a loss of $10,000. To recover Conditions. or social impact investing that appeals to a family’s your loss, you may think you need to realise a 10% Relationships, loyalties, markets, and laws change over values and ethics. annual rate of return. However, this calculation does time. A good financial manager maintains the mental not consider two essential variables: time and rate of flexibility to question assumptions—and to change a When evaluating a limited access investment Arthur A. Bavelas CEO return. After the 10% loss, you are left with $90,000. mindset as the facts change. Update the financial opportunity, family office leaders—family members CEO Bavelas Group Family Office A 10% rate of return would yield just $9,000, still management plan as circumstances evolve to capture and wealth advisors alike—should refer to these and founder Family Office Insights leaving you $1,000 short of full recovery. new family dynamics and market opportunities. rules to help balance potential return while safeguarding against financial fragility. Rule #2: Know Yourself You would need to earn an annual rate of at least 11.1% As family office leaders explore an expanding variety As the advocate for an investment, you’ll need to for a 12-month-time-to recovery period to get back of exclusive investment opportunities, the importance Rule #1: Know your Stakeholders explain the merits of any proposed action truthfully and to your starting point. Moreover, that doesn’t include of their role as responsible stewards of wealth and Stakeholders include multiple generations of reasonably. You should balance snap judgements and additional costs for taxes, fees, lost opportunities, antifragility grows, too. Following these rules will family, spouses, ex-spouses, and possibly even romanticised opportunities with honesty that comes and inflation. Calculate the time to recover before help sustain the family’s legacy for future generations. employees, staff, and the circle of advisors. Each from understanding yourself and your leadership you make an investment decision to determine how stakeholder has a unique set of plans, hopes, and role. Assuming responsibility for the family fortune long it will take the family fortune to recover from About the author: expectations for the family fortune. They also have takes discipline, courage, truthfulness and study. an investment gone wrong. Make sure this timing fits As an entrepreneur, author, and family office investor, individual emotions, perspectives, and values that Sometimes, though, things don’t work out well, so be with the family’s goals and outlook. The best financial Arthur Bavelas is a pioneer in developing one of the feed opinions and ideas about what should be done prepared to learn from the experience, apologise to the managers understand how time-to-recovery works first private opportunity peer review networks for to grow, preserve, and distribute legacy funds. stakeholders, and move on. when considering the risk vs upside potential. investors within the family office community. When it comes to managing sustainable multi- Rule #3: Prepare a Written Plan Rule #6: Understand “What Could Possibly Go He founded Family Office Insights in 1998 to provide generational family wealth, it is best to get everything A documented financial management plan serves Wrong?’’ before Investing. meaningful access and engagement for active, socially out in the open to address any issues and deal with multiple purposes. Primarily, it allows you to develop Determine everything that could go wrong even conscious entrepreneurs and wealth managers. Mr underlying feelings of anger or resentment. When strategies and tactics that address stakeholders’ before you consider the benefits an investment may Bavelas draws upon his experience of founding, things are left unsaid, stakeholders may become interests as well as prepare for contingencies. However, offer. This also includes calculating the full range of building and exiting a successful technology startup to threatened and are more likely to act out of fear it is also a way to allow for all parties to discuss and costs involved.