In the dynamic world of family offices, a significant trend is emerging: single family offices increasingly collaborate with multi-family offices for complex administrative tasks. Nienke Bollen and Maartje van Casteren, partners at Providence Capital, have observed this shift in their daily operations. Leveraging their extensive experience, they offer valuable insights to multi-family offices, maximizing their expertise.
«The smaller single family offices are more receptive to cooperation,» Bollen stated in an interview with Investment Officer. «They handle a lot themselves, but show interest in outsourcing, especially in specialized areas like cash management advice.»
«At Providence, we’re well-equipped to offer these services,» Van Casteren added. «Working with diverse families exposes us to a variety of solutions, which we can then share. Larger family offices may have this knowledge, but smaller ones, due to their limited staff and advisers, might not.»
For Providence Capital, a recurring name on Chambers› list of top wealth managers, such new client categories have spurred steady growth.
‘Under the radar’
When asked how new clients are acquired, Bollen explained, «It’s mostly ‹under the radar›. Families discuss among themselves or are referred by our partners. Our clientele is predominantly entrepreneurial families, aged from their 30s to 60s, a young demographic for our industry. The variety of sectors they operate in adds excitement to our work.»
«The investment strategies vary widely,» Van Casteren noted. «An active entrepreneur might prefer direct investments, while those with family businesses adopt more defensive strategies. For larger assets, our approach is akin to that of a pension fund, where direct subscriptions are possible without banking intermediaries.»
The family office within Providence Capital, jointly managed by Van Casteren and Bollen, operates independently from the asset management side. This entity also holds a trust licence from the Dutch Bank. «We function as a distinct unit, with our own systems, staff, and premises. While some families we manage assets for might be our clients, it’s not a necessity. Conversely, we have client families who do not invest with us,» Van Casteren elucidated.
Regarding sustainable and responsible investing (SRI) preferences across generations, Bollen observed, «Younger families often make more sustainable choices and show a growing interest in philanthropy, sometimes to the extent of donating 99% of their assets. They prefer doing this discreetly. Engaging children in these philanthropic efforts is also a common goal, focusing on poverty alleviation and causes aligning with their expertise.»
Private markets
Discussing the shift towards private markets, Van Casteren said, «Our work with large, multi-generational assets allows for strategies that include some illiquidity. Family preferences may range from real estate to private equity or infrastructure investments. Diversification across economic cycles is key. We also focus on accessing top private equity managers through our private markets team.»
On the topic of challenging discussions with families, Bollen mentioned, «The difficulty lies in aligning family members on their true desires and strategy. Allowing younger generations a voice is crucial. It’s a learning curve for families, and guiding them to a cohesive plan is rewarding. For families keen on newer ventures like cryptocurrencies, we engage in thorough discussions and bring in expertise.»
When asked about cooperation with other parties, both laughed. Van Casteren said, «We could spend our entire day meeting people with great initiatives. However, we are selective, understanding the unique needs of the families we serve.» Bollen added, «As a multi-family office without preferred advisers, we encounter a variety of parties. This allows us to gather a comprehensive understanding of available services and ensure we protect our families from potential pitfalls.»
Client warnings
On client warnings, Van Casteren highlighted privacy concerns, «Clients prefer discretion. We help them understand the digital footprint their families might leave, especially while travelling.» Bollen noted, «Navigating legal and regulatory frameworks is also part of our role. The extensive documentation required by KYC legislation often raises concerns among families.»
Finally, discussing the secret to their success, Bollen concluded, «It’s primarily our people, followed by our collective knowledge. Our low staff turnover and team cohesion are key. Finding the right fit for our team and aligning with client expectations remains our biggest challenge. Ensuring stability and continuity is paramount for us.»
Further reading:
- At Commenda, family assets strive to improve the world
- Anthos attracts ten new clients in first year as multi family office
- Multi-family office approach ‘correct answer to the market’