The survey Family Office Report Brazil 2020 highlights that, until the middle of last year, the main investments of customers were distributed between fixed income (32.9%), equities (29.7%) and funds (11.5%). In addition, there were also investments in real estate, private equity, venture capital, among others. However, the paper mentions that after the pandemic, 83% of investors increased their interest in the equities asset class and 90% in assets of the technology sector. In addition, all family offices that responded to the survey have some portion of their assets abroad.
Investors worry about sustainability and ESG
Investments focused on ESG (Environmental, Social and Corporate Governance), philanthropy, and assets that generate social and/or environmental impact was also in the sights of the family offices consulted.
The concern is not new. According to an article in Capital Reset, for some years now, there have been stakeholders questioning whether allocating capital in shares of polluting companies made sense or whether the production chain of certain funds was suitable to receive resources.
For family offices, this concern makes perfect sense for protecting investors’ capital in the long run.
What are family offices, and how do they work?
Great fortunes need to be managed sustainably and, if possible, free of family interests. After all, several issues deserve dedication to preserve the wealth: asset management, accounting, governance issues, corporate, succession and tax planning, for example.
Thus, a family office is much more than an asset manager. Generally, these companies are hired by wealthy families because the more extensive the fortune, the greater the complexity.
In Brazil, there are two types of family office: the so-called single, when the family itself assembles the structure and has an exclusive service, and the multi-family office, a specialized offices that provide the service for several families.
Learn about some Brazilian family offices
Turim MFO (multi-family office)
The company has approximately US$ 20 million in custody and seeks geographically distributed assets. The priority is venture capital funds, although it has an eye toward sustainability in selecting investments.
“We believe that a family’s legacy is much more than money, assets, and businesses. It is also reputation, belief, values, virtues, history and ‘prepared opportunities’,” Turin says on its webpage.
Founded in 2007, G5 Partners is considered the largest independent financial services company in Brazil, with the management of R$ 13 billion from 200 families, with an average of R$ 65 million per family. The minimum to be part of the G5 portfolio is R$ 10 million.
With the exclusive service bias, Tera serves few families, bringing together a total of R$ 6 billion under management (average of R$ 430 million per family). Founded in 2015, at the demand of the partners of Pátria Investimentos, who were looking for a company for wealth management, today Tera is an independent multi-family office.
Created in 2010, Sonata initially focused on serving the female audience. In 2018, however, this profile began to change, and today 40% of the clients are men. The company serves about 20 families, with total assets under management of R$ 3 billion (an average of R$150 million per family).