Peer-to-peer lending, family offices dialing up on risk, and big bets on gold: Top 10 stories of 2015
Peer-to-peer lending, family offices dialling up on risk, and big bets on gold– these were just some of the themes that kept CampdenFB readers hooked during 2015. What were the most read news stories on CampdenFB in 2015? The results may surprise you.
1) Luxembourg based family office launched P2P-focused asset manager
Yves Saint Laurent co-founder Pierre Berge made his wealth in the fashion business, but his family office this year stepped up its interest in an entirely different sector – peer-to-peer lending.
Shepherd Capital has committed $50 million to launch Eiffel eCapital. It will provide investors with peer-to-peer platforms across the US and UK with loans ranging from two to five years averaging 5% to 10% returns.
Research shows that the peer-to-peer sector in the UK generated over £1.7 billion ($2.52 million) of funding in 2014 – a figure expected to almost triple by the end of this year.
2) Oil tanker and shipping business Fredriksen Group appoint new CEO, then remove him
In June, readers heard that Norwegian industry giant John Fredriksen appointed Jo Lunder to the head of the London-based family office.
But in a turn of events the ex-professional footballer stood down from all duties in November after Norwegian authorities arrested him in a bribery probe connected to his former employer VimpelCom.
The Fredriksen family owns stakes in companies such as Seadrill, Frontline, and Golar where John's daughters have taken charge. Fredriksen, born in Oslo gave up his Norwegian citizenship in 1996 to become a citizen of Cyprus to avoid dividend-based tax.
3) The rise of financial technology
A FinTech expert claimed that the millennial generation are turning away from financial advisers and replacing them with technology.
Cofounder of Wharton FinTech Daniel McAuley says those born between 1980 and 2000 see technology as a safer alternative, having lived almost their entire adult lives during the global financial crisis. Millennials are also encouraging their parents to adopt online financial management tool over human advisers.
Banks face the highest risk of disruption, as millennials are more excited about the new offerings by tech companies like Google, Amazon, Apple Pay and PayPal than traditional banks.
4) New team investment firm for families seeking quality deal flow
Families seeking access to quality deal flow for co- and direct investments were able to access a new fund structure aimed at improving the calibre of deals seen by family offices.
Advisory firm Alberleen Group set up an investment vehicle designed to meet the needs of family offices and lets private investors co-invest in the proprietary deal flow seen by the firm's cooperative of investment banking teams.
“Far too often, family offices do not see co- or direct investment opportunities until they have already been reviewed by institutional investors and big private equity funds. This often means that the best deals have already been taken by larger investors and it makes it difficult for families to gain access to quality opportunities,” said Jolyne Caruso, chief executive of the New York-based company.
5) Boards carry weight of succession
It doesn't matter if you're a CEO or chairman, an EY business survey, Preparing or procrastinating? showed that 44% think the board of directors are responsible for succession.
In contrast, 23% placed responsibility with the shareholders and just 22% voted for the chief executive.
This is more common in emerging economies, as 51% stated that the board are likely to give succession-planning responsibility compared to 41% in developing countries.
The study surveyed 525 successful family businesses worldwide across the US, Asia, Latin America, and the Middle East.
6) Fleming Family & Partners profit falls ahead of Stonehage merger
Profits plunged for Fleming Family & Partners after it came out of the Russian market, according to accounts filed with Companies House earlier this year.
The multi family office sold off its Russian Real Estate Limited business in 2013, and saw profit before tax slump from £4.4 million ($ 6.52 million) to £2.7 million by March 2014.
However, things weren't looking all bad, as the company announced a merger with rivals Stonehage. The new group was named Stonehage Fleming Family and Partners and looks after 250 families and manage over £28 billion of assets.
7) Family offices continue to take on risks
Ultra high net worth (UHNW) families are no longer taking the preservation route, as 50% in family offices are now switching to a balanced strategy.
The number of families following a preservation strategy has now decreased to 21%, as family offices took more risks by reducing holdings of cash, increasing holding in equities, and also investing in hedge funds.
The Global Family Office Report 2015 also showed that the average family office would now spend £5.3 million annually with 20% of the figure going towards the performance fee of external managers.
However, one fear that remains is that a third of the offices do not have any risk management procedures to examine some of the more risky investments.
8) China's wealthy families take more interest in non-investment services
Good news for Chinese family offices, as China's population of ultra high net worth individuals grew by 18% in 2014, rising to 758,000.
However, many entrepreneurs are thinking more about the future in estate planning, tax planning, and education as they enter their 50s.
The Global Family Office Report 2014 showed that intergenerational wealth management was the first priority in family offices followed by functions of accounting, tax and estate planning, then family unity in third place.
9) The Duquesne family office makes a $324 million bet on gold
Stanley Druckenmiller once broke the Bank of England with George Soros in 1992. The self-made billionaire then made a huge gamble on gold in August, as prices hit a five-year low.
The Duquesne family office spent $324 million to buy 2.8 million shares in SPDR Gold Trust, which is the largest physical gold exchange traded fund.
The 62-year-old is a believer of precious metals, as he made further purchases of 1.28 million shares in gold miner Newmont Mining and 3.6 million shares in copper giant Freeport-McMorcan.
Large investments are a norm at Druckenmiller, which is also the largest single holder of social media giant Facebook, sitting in second place with 1.8 million shares.
10) Multi family offices complete merger to become Sandaire Investment Office
Before Stonehage Fleming's union there was the merger of SandAire and Lord North Street Private Investment Office, to become Sandaire Investment Office.
The two London based multi family offices joined forces in March 2014 and had spent nine month integrating the businesses across before the merger.
The new firm is owned by the Scott family, with professional board and management teams who manage billion of pounds and endowments for clients including Oxford and Cambridge colleges.
The firm has 50 employees and offices in London and Singapore. It manages several billion of pounds in assets for the Scott family.
