UHNWI - WEALTH - PHILANTHROPY- FINE ART - LUXURY - LIFESTYLE Subscription $100 Per Year Private Banking
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FAMILY OFFICE ELITE Spring Issue FAMILY OFFICES - UHNWI - WEALTH - PHILANTHROPY- FINE ART - LUXURY - LIFESTYLE Subscription $100 per year www.familyofficeelite.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 DOMOS FINE ART FINE ART DOMOS CONSULTANTS DOMOS FINE ART has a portfolio of very Fine Art on sale (Off Market) on behalf of our clients which include works by Caravaggio, Renoir, Monet, Van Gogh, Matisse, Rembrandt, Picasso, Rouault, Bonnard, Raphael and more. 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Locate specific pieces of Fine Art Assist in verifying provenance of Art Auction representation UK Office | TEL: + 44 (0) 29 2125 1994 | SKYPE: domosfineart | [email protected] | www.domos.co.uk FAMILY OFFICEELITE MAGAZINE CAN PRIVATE PRESTIGE BANKS HELP THE BMW GROUP LONDON FAMILY OFFICES CULTURAL COMMITMENT INSIDE TRACK 05 A SPECIAL REPORT BY JUDY HOLM 51 ROLLS ROYCE MAYBACH S600 BLACK BADGE THE HIGHEST BALLISTIC 25 PROTECTION LEVEL 11 53 HEDGE FUNDS AIRCRAFT MANAGER SELECTION PURCHASE THINKING OF BUYING AN AIR- CRAFT? 17 57 IMPACT INVESTING LUXURY IN THE FAMILY OFFICE CHALET A SKI AREA OF 600KM FABERGE 21 THE ROTHSCHILD FAMILY OFFICE 59 REAL ESTATE THE SAFRA KEY TO SECOND CITIZENSHIP FOUNDATION FOR HIGH NET WORTH SAFRA FOUNDATION MAKES INVESTORS DONATION TO CLINATEC 23 48 61 1 FAMILY OFFICE ELITE MAGAZINE REAL ESTATE 67 FAMILY OFFICE PORTFOLIO MORGAN O’ NEILL A HYBRID CONTEMPORARY ARTIST CREATING HADHUNTERS 71 ART FROM THE PAST IN THE PRESENT PROPER EXECUTIVE PLACEMENT SUPERYACHT 73 CHARTER SOUTH KOREA 36 FOR UHNWI’s 81 PRIVATE BANKING INVESTMENT BANKING FLAVOUR 85 SIX STEPS 95 TO FUNDRAISING - MIDDLE EAST PHILANTHROPY TRUSTED FAMILY 93 ALTERNATIVE119 RISK MANAGEMENT INVESTING IN FINE ART 125 2 WWW.FAMILYOFFICEELITE.COM FERRARI’S HOMAGE TO HOLLYWOOD AND BEYOND To celebrate Enzo Ferrari’s birthday, Hollywood is not limited to its role to include the F430 Schumacher a new exhibition was unveiled at in the films themselves. Many actors voiced in ‘Cars’, complete with big the Museo Enzo Ferrari in Modena, and actresses are or were devoted cartoon eyes. We also picked the entitled ‘Red Carpet’. As the name Ferrari owners also. Paul Newman, Thomassima, an American-style suggests, the exhibit is a tribute to for instance, even competed a 365 Ferrari sculpted by designer Tom Ferrari’s role on the Silver Screen GTB4 in legendary races such as the Mead on 250 GT running gear, to and beyond. 24 Hours of Daytona, while Steve symbolise the many Maranello cars McQueen owned a whole slew of that have appeared on screen in This exhibition brings together the Ferraris now much sought-after by disguise, not least in the Fellini- models used on screen with clips of collectors. directed segment of ‘Histoires them in action in an homage of sorts Extraordinaires’, ‘The Racers’ and to the world of film and television Marilyn Monroe adored Ferraris ‘The Love Bug’. which was so quick to spot their star too – the white 250 GT Cabriolet quality and give them their moment Pininfarina featured in this On a racing track, movies of the likes in the spotlight: from the famous exhibition was one of her favourites, of ‘Grand Prix’, ‘Le Mans’ and, more Magnum P.l. 308 GTSs to the Miami in fact. Peter Sellers, Nicholas Cage recently, ‘Rush’ are the reasons why Vice Testarossa, the 512S used in Le and many other famous faces a contemporary Formula 1 car is Mans and the 375 America driven also fell under the Prancing Horse the symbol of the event. Because by Sofia Loren in Boy on a Dolphin. spell. Like any exhibition, this one Ferrari would never have existed But Ferrari’s relationship to has taken a little artistic licence without the track. 3 FAMILY OFFICE ELITE MAGAZINE FERRARI’S HOMAGE HOW PRIVATE BANKS CAN HELP FAMILY OFFICES By Jeffrey Sacks, EMEA Capital Markets Strategist, Citi Private Bank There is a growing recognition that sometimes not. Family offices are for wealth to be sustained over typically dedicated to providing several generations, collaboration professional and personal duties and good communication is for the family. They centralize the required between family members. execution of investment strategy, This lessens the potential tax services, insurance planning, impact of family disputes, poor philanthropic advice and personal decision-making, unprepared services. heirs and feelings of entitlement. This is especially the case with Given the breadth of the multi-branch families that are institutional level of access and geographically disbursed. This service needed by UHNW and article explores how private banks family offices, some of the needs technology solutions to support can be integrated into this process, are outsourced to the larger private consolidated reporting and risk and why is can be advantageous to banks. The demand for outsourcing management. In outsourcing, some do so. is growing rapidly, particularly or all of these areas have a higher amongst a handful of bigger global probability of better transitions A family office architecture has private banks. In particular, the of wealth from generation to three elements: private banks that are succeeding generation – a key advantage, as 1. Size: This is the number of in partnering with UHNW and research has shown that, in 90 family members, the number of family offices are those that can percent of cases, family wealth staff and the amount of assets offer a mix of positive investment dissipates by the third generation under management. results, deep intellectual capital, (source: The Williams Group, 2. Complexity: This includes quality research, unique products Raymond James). investment types, number of and dedicated advisory teams generations in the family and legal that can deliver exceptional client A large Private Bank can assist in entity structures. experience and have corporate four main areas: 3. Autonomy: The degree to reputations for ethics and 1. Family mission statement. which professional functions innovation. 2. Investment Strategy. are outsourced, what the typical 3. Governance Structure. professional services are and what While the decision to outsource is 4. Wealth education curriculums. the advantages of outsourcing are firstly driven by considerations of if done with private banks. cost, flexibility and confidentiality, The family mission statement’s family offices typically look to purpose is to assist the family The burdens that come with outsource functions where there in developing and establishing significant wealth can be complex are diseconomies of scale (i.e. too fundamentals for the extended and challenging. This is why much volume), specialized skill family to follow and learn from. The ultra-high net worth (UHNW) needs (e.g. aircraft maintenance, objective of the mission statement individuals and wealthy families estate law), low-cost access to is to define the core purpose of the are creating family offices. alternatives like external fixed family, and in so doing establish a Sometimes, a family office can be income managers and new guiding force for relevance of the separate from the family business; current and future generations. In 5 FAMILY OFFICE ELITE MAGAZINE considering the mission statement in order to achieve strong long- products, and independent advice purpose and objectives, some key term returns. The private bank (i.e. private banks that do not own questions need to be addressed, partner can assist in all areas of a hedge fund manager, do not run such as what the meaning of the process: a private equity business, and the family wealth is and why the 1. Investment policy statement – do not own a fund management family business exists. Ultimately, defining objectives, benchmarks, company). In addition, private the family mission statement roles and responsibilities. banks that can offer the family should help to align family core 2. Asset allocation – considering office access to their institutional values and ideals and facilitate potential risks and potential trading platforms should be leadership. These core values rewards across all asset classes preferred. In particular, access should be regularly reviewed and and regions, also taking into to a capital markets platform periodically re-confirmed. account liquidity and behavioural can offer speedy and efficiently biases of the family. priced execution with smooth In formulating an investment 3. Portfolio construction – using settlement. Some larger private strategy, the first step is to establish the bank’s research and analytics banks are also able to offer access an investment committee. This capability, establishing minimum to their institutional teams, so involves selecting experienced and maximum exposures by enabling family offices to create investment professionals – both asset class and region, as well as uniquely structured hybrids and generalists with broad experience rebalancing rules. Performance customized structured products as well as specialists in key areas reporting - regular in-depth