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GLOBAL FAMILIESCOVERSTORY


The pandemic has highlighted the need for financial service providers to be more than executors


be ROCHELLECLAR CLARKE SUCCESSIONSTRENGTH


FIG 1 STRATEGIC PRIORITIESFORGROWTH


Growth into an adjacent business activity/sector or subsector Entry into a new overseasmarket


Entry into a new geographical market within our borders


M&Aaquisition opportunities Increasing market share


Divestment opportunities (sale of whole or part of the business) Digitalisation/ technology investment


05 10 15 20 25 30 Per cent


Family business Source: DBS Private Bank/EY: The Asian Family Office Non-family business


more, that we can now do good things and also achieve healthy portfolio results.” Private banks have joined their


clients on “journeys” reflecting a fast-changing environment around suitability of investments. “So far we have excluded the ‘red flag’ industries fromportfolios, including arms, nuclear weapons and tobacco, with zero exposure to gambling in direct equity stocks,” says Delyth Richards, head of the client solutions group at Kleinwort Hambros in London. “But how can we take that further


about environmental, social and governance (ESG) investing are becoming more central to the relationship precisely because Covid has highlighted previously hidden elements. “Investors have started to see


the tangible effects of that way of thinking on how corporates function and perform,” says Dina de Angelo, executive director of Switzerland’s Pictet Wealth Management. “The pandemic has accelerated this discussion, because supply chain issues have become more visible. Families today understand much more than a year ago about how pharmaceutical companies work and how quickly research and development has progressed globally. The story has played out in front of our eyes.” This means ESG has become a


central tenet of families’ investment portfolios, one expected to grow further in coming years. “This is part of a shift whereby the wealthy no longer see philanthropy as the sole route to having a positive impact,” says Matthias Lehmann,


head of the global family office for Western Europe at UBS Global Wealth Management. “They are now seeking to do good across both investment and business activities.”


HOTTOPIC The generational shift of responsibilities and assets has further amplified this trend, says Gerard Aquilina, partner at Cone Marshall, a lawfirm advising family offices. “The younger generation is insisting these topics are discussed with their parents. I don’t see concern about what we are doing to the planet in any way diminishing. If anything, because of the pandemic, there is more consciousness there.” A watershed moment in ESG


investing came when investors realised the resilience of returns. “It used to be that ESG and impact investments had a reputation of not necessarily being profitable,” recalls Mr Aquilina. But the tide has turned, with ESG funds among best performers in 2020. “They have shown that it’s not just charity any


and engage with companies? That is something we need to improve, taking more of an active role in voting against certain positions, when boards are not fully representative. We want to build on this shareholder engagement element.” Within most firms, these


sensitive, holistic conversations with the highest echelon of clients are handled by an “elite squad” of private bankers, better rewarded than peers dealing with lower segments. UBS, the world’s largest wealth manager, restructured its offering in early 2020 to create a global family office unit along these lines. In order to target a handful of rich, sophisticated, international families, says Mr Lehmann, the bank selects “the very best advisers in the industry and services from across the whole of UBS, to meet the full range of their private and business needs”. Back in 2010, when Cone


Marshall’s Mr Aquilina headed international private banking at Barclays Wealth, he warned a Zurich audience to “beware of the complexities” of dealing with top-tier family clients. Their “demanding and often


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