Where «old money» mainly sought to leave wealth intact, «new money» is going out into the wide world - to make that world a better place. Frederik Redelé, managing director of Amsterdam-based multi-family office Commenda explained to our Dutch colleagues in a Q&A session how he helps high net worth entrepreneurs make an impact.
How many families do you serve at Commenda?
About 15 families. That’s not that many, but we financially take care of several family members, including extremely wealthy ones.
Most of our clients are first generation, as we call it. For some we do everything, we have independent authority in the clients› companies because we have a trust licence, but there are also clients who do a lot themselves, in which case we only take care of the administration, for instance.
We don’t actually serve “old money”, you find that more with classic single family offices. We are at the Amsterdam Zuidas, with twenty-five people. It’s not super formal, you don’t see three-piece suits here.
Do your clients strive to keep their assets intact as much as possible?
With old money, without an active business, you see that more often. But you have to deal with taxes, divorces and the transfer to the next generation, so assets get scattered and diminish. If you don’t really add value to assets, it’s hard to stay rich with investing, especially if you also have to live off it.
With us, things are different. For example, we serve a number of tech entrepreneurs who have earned a lot in a short time.
Often it starts with traditional investing and then moves on to impact investing, then to philanthropy with venture capital and then giving away follows. This is a striking trend, many of our clients would rather improve the world than keep everything together to bequeath to their children.
How do your clients invest?
Entrepreneurs like to win. Making money is almost like a game to them, which is more fun than being rich. While for investing, what my grandmother always said applies: making money is done with your bottom, by staying on it. I always ask first: what have you done in the past, how did you make your money?
That offers predictive value about how people want to invest. In the beginning, the risk profile is usually moderate. But when people are wealthier for longer, and they find that their spending patterns don’t change much, they become open to investing with a bit more risk.
Then private equity comes into the picture, with more risk, but with which you can also make a greater contribution to the world.
How did you get started?
I come from entrepreneurial families, my grandmother was a Van Houten descendant, from chocolate, and my grandfather’s family made the Victoria biscuits. So you get that. My father unfortunately died young and then I had to continue to discover it on my own.
I became an asset manager at Kempen & Co, with targets, you had to bring in money. But sometimes you noticed that clients were very dependent on your advice. And independent advice is important.
Through some wandering I started for myself as part of a trust office. With the idea: I want to unburden wealthy families financially. And that went well, my first client was immediately a very large international entrepreneur. If you work on those kinds of assets, you have to create overview, make reports.
I continued to grow through those reports; I had bought beautiful software for that. After an incident at the trust office, I withdrew from it and continued on my own. Now I have been here in the Zuidas, in this building, for over 15 years.
Can you say that you don’t have your own investment philosophy but tailor everything to what the client wants?
Completely. Completely. Because we customise, we are less likely to share our research with other clients, for instance. We look for a suitable fund, we make an analysis of that and the client then decides whether to enter or not.
Sometimes we are also approached as initial investors in a new fund to be launched. For instance, we have supported the Wire Group but also the Rubio fund.
They were able to show potential investors through our support: look we already have some big investors of ten or twenty million, so join us. I think that kind of innovation is also an appropriate role for family offices that focus on impact
How do you get new customers?
I talk to everyone and do crazy things. But only the things I like myself, I don’t golf, for instance. So I love being in Scotland and I’m absolutely crazy about ballet, again I talk to people there.
Because of my board position with the National Opera & Ballet Fund Foundation, I am on the jury of the Alexandra Radius Prize for new talent. That takes quite some time, but you also have to give something back to society, besides financial support.
In that respect, you automatically get the clients that suit you. In that respect, a family office is very different from a private bank or a major bank. Those need scale. By the way, we are soon going to put our principles and how we are organised clearly on paper. So that we can properly answer the questions we ask external parties ourselves.
You are very enthusiastic about impact investing.
True, we started about four years ago and then a large amount of money was allocated to it. After that, more money was added every year. We work a lot with foreign asset managers, they have more expertise because they are bigger and specialised.
We look for nice projects in what our clients want, which could be something with the energy transition or biodiversity, for instance. Nowadays, people also come to us with projects, because they know we do this.
We recently started working with Qdrop to measure and report realised impact, which is important to be able to adjust properly and know what is effective.
Can you give an example of a project that has social impact?
We are working on a project in social housing, Cokopen, by Bart Hartman. My clients are co-funding his foundation. We are going to provide affordable housing for middle-income people up to 75,000 euros. And if people move on after a period, they get a part of the increase in value - if any - as initial capital for a new home of their own.
In case of depreciation, they don’t have to pay extra. We want to make that big. It has gradually become a social duty to create affordable housing.
Do you have any new things in the pipeline?
We will never get much bigger in size than we are now. My wish list does still include the desire to create a passive investment portfolio and I would like to advise impact private equity funds. Especially to create a simple solution, something you can get in and out of easily, so that more people can participate in positive investing. Another idea is a feeder structure, but we are working on that further.