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INTRODUCTION


Leveraging opportunity for family offices


The importance of family offices is growing, particularly in the current credit constrained conditions. They have extensive funds and a long-term approach to investment, looking for good but not spectacular returns in low to moderate risk investments. They are also discreet and even secretive, not wanting to make a major effort to be noticed. These characteristics currently give rise to a unique opportunity.


F


amily offices might have been at a disadvantage in recent years compared to private equity competitors, but this is no longer the case. The lower leverage employed by such


offices also makes them much more attractive to sellers who view the “execution” risk of bidders needing to raise finance as very high. Despite this, the problem remains as to how owners


of assets for sale (or their advisors) can find their way to the appropriate family offices. Whereas there are many databases and tools to guide them to private equity buyers, the same is not true for family offices. The challenge remains: How can the family


offices make themselves more identifiable, without compromising their secrecy or confidentiality? It is a paradox that has defeated many attempts to resolve it – until now. There is no doubt in the ability of technology to


match two sides to a bargain – it is used in the auto, property, jobs, holiday, even personal relationship


The rise of family offices


Ö There are in the region of 6000 family offices globally and the number is growing.


Ö Growth is especially strong in the Asian markets, where only about 500 family offices exist at present.


Ö Family offices serve the interests of single families whose wealth is typically US$100m and above.


Ö Smaller funds are often grouped into multifamily offices for convenience and to spread costs.


Ö Typical staffing for a family office is 10–15 people. Ö The main purpose of the office is to preserve and pass on the wealth of a family by diversifying from the feeder business or re-investing the proceeds from the sale of that business.


markets. It was only comparatively recently that a safe way was found to enlist technology to support the mergers and acquisitions market. The marketing activities of buyers, such as meeting with banks, attending conferences and sending out deal case studies, is not the norm for family offices. Given a vetted and curated environment, however, they have proved willing to place their acquisition criteria under their control in the very secure environment offered by a company such as MergerID, a business owned by the Financial Times/ Pearson Group, a listed FTSE 100 company. Information placed on MergerID is not viewable or


searchable in any way. In fact, the existence of the brief details placed on the platform are only ever available to reputable advisers representing genuine sale mandates – and this is the key – which directly match the family Office requirements for size, sector and geography. In other words, family offices can use MergerID to


identify and view quality transactions meeting their requirements in a passive manner. Transactions are fed through to a customized dashboard and interactions with the seller can be conducted over the platform to establish initial interest. The time is ripe for family offices to take advantage


of their position in the market. To do so they need to respond to the opportunity and the excellent value that can be obtained from cash buyers in a buyers’ market.


Daniel Confino Founding Partner of MergerID For further information on MergerID contact IFOA – info@ifoa.com.au


FAMILY OFFICE: ASIA TOMORROW 11


INTRODUCTION


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