| The Role of the Multigenerational Family Office |  |
Technically speaking, all families are multigenerational, and most families care deeply about the relationships between and among members of all generations. However, some families consciously cultivate and strengthen multigenerational bonds. These 'multigenerational families' work hard to optimize their collective financial, human, and social capital across a time span of one hundred years or more. If they truly hope to endure for a century or more, a strong multigenerational family office becomes essential. ( Read more from Bradley Fisher.) |
| Approach Your Family Office Just as You Do Your Family Business |  |
Many families who wish to sell or have already sold their family business, think that letting go of the business will simplify their lives and relieve them of all the burdens of operating a company. In reality, selling a business and managing new liquid wealth presents a wide range of issues, each requiring specialized business acumen, skill and planning in order to successfully perpetuate that wealth over future generations. One must not only be prepared, but also meticulously attentive to all dynamics presented from what is referred to as "sudden wealth syndrome." ( Read more from Allison Taff.) |
| International Wealth Management When a Family Member Resides Abroad |  | |
Living and working abroad, international marriages... When it comes to international wealth management, issues related to having a family member who resides abroad affect an increasing number of families worldwide. The following points illustrate the complexity of this topic. As no two cases are alike, the management of international assets warrants close monitoring with the help of an expert. ( Read more from Cédric Meeschaert.) |
| The Value of Values Investing |  |
In the past, working to increase assets and to affect social change were considered divergent paths. There was assumed to be an inherent tradeoff between making money and accomplishing a social good. If you wanted to change the world, you donated to charity. This is no longer the only option. Now, due to trends involving talent, technology, markets and policy, that tradeoff no longer needs to exist. This ability to combine your value set and investment thesis will allow you to think about investing in new ways. ( Read more from Josh Cohen.) |
| Blanket Property Insurance for Geographically Diverse Properties |  |
Multigenerational families often own numerous residential properties either individually or collectively. Such properties are often located in areas known not only for their beauty and affluence but also for the potential for catastrophic storms, earthquakes, and wildfires. Family offices can be empowered to help organize the insurance needs of the family and implement group purchasing. Consolidating insurance for the family members and their various properties with one provider is a good first step. Another option for those families is a Blanket Property policy. ( Read more from Mary Gust.) |
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Greetings!
In conjunction with this special edition, Family Business Wiki will be hosting a Free Global Teleconference on Family Wealth and Family Offices on September 28, 2010. Moderated by Dennis Jaffe, the teleconference will include many of the experts featured in this newsletter. For more information, click here. |
 | Introduction to this Special Issue on Family Wealth and Family Offices: Dennis Jaffe | | The Complexity of Sustainable Family Enterprises
The old image of the family business as a two-generation, mostly male team working in a profitable business and then going home to their individual family, is only the tip of the iceberg of the real story. The family enterprise, as we have begun to call it, may contain several businesses, or a family foundation, or a family office that invests and takes care of the financial needs of several generations of a family. As generations evolve, if the family's enterprise continues to grow, the family has to do much more than just "mind the store."
This month's blogs focus on some of these areas and some of the considerations for a family that go beyond business management. This month, we have a distinguished set of commentators who will help make us aware of the complex challenges these families face. These issues are very well presented by... (Read more from Dennis Jaffe and add comments.) |
| Thought Leader Blog: Laurent Roux | What Do Families of Wealth Need During These Challenging Times?
Current events have never been more challenging to families of wealth and their advisors. Arguably, the evolution of financial, socio-economic, political, and other matters are always in a state of flux - that is the nature of the world in which we live. Having just returned from the Galapagos Islands and learned more about the theory of evolution, one is reminded that the world changes constantly and those who understand trends can adapt and survive while those who do not shall fail and even perish.
Families of wealth have been presented with numerous challenges the past few years including poor investment returns, mixed levels of communication and transparency from investment advisors, asset allocation and manager selection process missteps, risk management failures, uncertain economic times, greater government intervention and even intrusion, and more. The notion of TRUST continues to be revisited. Many families concerned about legacy and stewardship have postponed dealing with these issues choosing to focus their attention on dealing with the uncertainties first. (Read more from Laurent Roux and add comments.) |
| Dennis Jaffe | | From Family Business to Family Legacy
 The world is facing a generational crossroads as trillions of dollars in new wealth generated at the end of the century, is being passed down to the next generation. The elders (and not so elders) who have created this "new" wealth are beginning to confront the question of legacy: What will be the impact of all this wealth on society, and on their family?
They can learn something from looking at the patterns of the business patriarchs of the previous century, at the hundred-year impact of some of the great fortunes from the 19th century. That era produced some great fortunes that accumulated very quickly. The new industrial wealth was seen very differently than the "old" wealth of the landed families of the time. As today, some of the business titans and their families wanted nothing more than to be accepted in polite society. Their heirs were known more for their parties and houses, than for their accomplishments.
Some families pursued different paths, where they focused on re-creating their family legacy in each generation. ( Read more from Dennis Jaffe and add comments). |
| Ricci Victorio
| | How Do I Bring My Son Back into the Business After Botching It the First Time?
Recently I received an email from a business owner that stated his relationship had drastically dissolved with his son several years ago after circumstances caused him to fire his son, rather than lose half of his management team. He reported his son was naturally full of resentment, claiming he was stabbed in the back by jealous managers and that his career was ruined as a result. The father went on to say that he realized that he handled the situation rather poorly as he never really took the time to investigate the situation, reacted hastily and made a poor decision.
He went on to say that recently he shared this difficult realization with his son and they have tentatively begun the healing process to repair their relationship. They both want to give working together another try but there are still many of the same managers working there.
His question was - although we are both nervous, is there any chance this can be successful or are we fools? ( Read more from Ricci Victorio and add comments). |
| Robin Hays-Haun | | After the Sale: Continuing a Shared Family Enterprise
 Selling the business is a life changing event for most families. In addition to the details and negotiations of closing a deal, the operating business may be converted into a 100% liquid cash asset. Sounds like a great problem! After all, cash is easy to value and pass out to all the owners; liquidate the company and everyone gets their share, right? However, family members often have limited experience with traditional investing outside the company and older generations often have serious concerns about unsupervised access to spendable cash.
When family members have compatible goals for asset preservation, efficient investment management and retaining control over cash flow a family investment partnership should be evaluated as a tax efficient vehicle for continuing a shared family enterprise. Think carefully about the balance between shared assets and personal accounts - retaining some level of personal financial independence and flexibility is essential to a lasting relationship.
A family investment partnership, carefully drafted, can be an important tool for efficiently managing a consolidated pool of family investments. ( Read more from Robin Hays-Haun and add comments.) |
| Pascal Levensohn | | How Family Businesses and Venture Capital Backed Companies Face Similar Boardroom Challenges
Family businesses have a lot in common with venture capital (VC) backed companies. First, they are led by passionate, inspired individuals, their founders, who are determined to challenge the low odds of success for their new venture in order to realize their vision. They also both face major business challenges as they grow, and their early evolution can be characterized as operating from one crisis to the next- these are resource constrained companies in need of risk capital to grow.
For venture-backed companies, their future depends on whether the company can justify attracting the next round of preferred equity from insiders or from a new investor-with the latter being far preferable to the former. For family businesses, they rely on "friends and family" much like "angel" investors in early stage VC, to reach self-sustaining operations. The greatest similarity between these types of companies, however, lies in the fact that they are governed by a small, insular group, the board of directors. Most important, these boards, whether they are populated by professional investors or family members, are often dysfunctional.
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