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Jaume Sabater on real estate strategy and evolving the family office

By James Beech

Family entrepreneur Jaume Sabater is capitalising on the real estate, technological and lifestyle trends accelerated by the pandemic by investing in green residential property developments, revitalising tourist hotels and exploring blockchain opportunities.

Sabater, 42, is the second-generation Swiss founding partner and chief executive of Stoneweg, headquartered in Geneva. He said his fully integrated real estate investment company has invested more than $5 billion in multiple real estate transactions since he launched it in 2015.

“Our current portfolio represents more than €4 billion [$4.5 billion] of real estate assets value under management, of which there are many family offices we have helped deliver significant returns and portfolio optimisation,” he said.

Sabater is well versed in family offices in his dual role as the chairman of the investment committee of the family office set up by his financier father, also named Jaume Sabater. The family office is based in Andorra and oversees a portfolio worth more than €1 billion ($1.1 billion), combining financial assets and private investments.

Sabater described Stoneweg as a “fully integrated real estate platform”, which meant it has real estate professionals on the ground, who have the network and the expertise to source and execute a defined strategy within a given timeframe.

“To be more efficient, we have these resources based in any country we operate,” he said.

“This gives us more control and reactivity than peers. This is the reason why Stoneweg is now attracting worldwide asset managers, keen to rely on our know-how, such as M&G, which has decided to partner with us and create a €500 million ($566 million) equity platform, where we build to rent new residential developments in Spain, mainly in central Madrid and Barcelona, to satisfy a demand for new lifestyle buildings, including all facilities, concierge, gym club, pool and so on, taking into account ESG criteria.”

CampdenFB asked Sabater what inspired him to venture away from his family office into real estate investments, how he factors in technology and sustainability, and why he thinks succession will be easier for his family.

What global investment trends are you seeing in real estate and how are you directing Stoneweg to take advantage of those trends?

Central banks cannot afford to disrupt the current support they are offering to the economy through low interest rates and thus, this will continue to benefit the real estate industry.

Obviously, the big factor in recent years has been the emergence of Covid-19 and with this pandemic we have learned how to adapt and live our lives. In fact, the pandemic has very much sped up trends that were evolving, from more flexible working environments and living locations, to how we acquire things and the digitalisation of our age.

There was already a shortage of residential homes and ones that were modernised and eco-friendly.  People are more flexible in where they live and, as we should be, are conscious of the environment, and thus we are building and developing residential living in the United States and closer to home here in Europe.

The way we consume has revolved around online trading and this has sped up, as we all know, and clearly to the detriment to the traditional retail high street, but this has its challenges leading to more deliveries and faster and this is an area where Stoneweg are developing providing support to the “Last Mile Logistic” theme within cities and near people.

And the other area we are helping to support is reinvigorating the hospitality sector within southern Europe, many hotels are in great locations, but need to be modernised and given some care and attention. So, we at Stoneweg are buying and developing hotels in core holiday destinations.

Yes, the sector has suffered through the pandemic however, we have seen already from this past summer the desire of the tourism industry to return and we expect it to return to full bloom again in the very near future.

You worked as first vice president with Edmond de Rothschild (Suisse) SA Asset Management in Geneva for 11 years. How did that experience of a family-based entity compare with your family office, in terms of culture, governance and investment strategy, and what do you apply from that experience at Stoneweg?

Edmond de Rothschild was a great place to work. There I had, with my team, the opportunity to launch the first Real Estate Sicav in Switzerland, ERRES, which was worth more than a billion Swiss francs. Of course, Edmond de Rothschild is a big institution, but nonetheless, you could still feel the family’s touch in most aspects of the business, in a good way. Personal connections and relationships were built in this period that very much helped me form the basis of the growth and success of Stoneweg that we see today.

When creating our own family office, of course, the structure was much lighter, offering a feeling of freedom and with a big responsibility at the same time. Real estate is only one component to consider, but as time passed and with more ideas and opportunities coming in, we felt the need for more resources which very naturally led us to create Stoneweg.

What prompted you to venture beyond your family and launch Stoneweg in 2015? What was your father and family’s reaction? How have you funded Stoneweg’s rapid growth?

As mentioned before, we were lucky enough to be proposed many opportunities on top of our own ideas and projects. While conducting these projects and assessing those opportunities we met so many interesting partners that our activities grew naturally beyond the pure ‘family office’ business.

My father’s and the whole family’s reactions were very positive and supportive as this seemed to be the logical evolution of our activities.

Venturing beyond the family allowed us to finance bigger projects as well and led to the growth we are currently experiencing at Stoneweg today.

The new Global Family Office Report 2021 by Campden Wealth revealed three-in-four families’ wealth increased over the past year, despite the Covid-19 pandemic. What do you put this increase in wealth down to? Has this increase been your family office’s experience as well?

My family office has benefited from the rise of capital markets, but also from all the real estate strategies implemented by Stoneweg, in which my family office has participated. Creating durable business relationship between Stoneweg’s professionals and my family office’s executives is a value add in the sense that Stoneweg’s employees learn to be more familiar with the needs of a family office, whereas the family office executives become more exercised to screen real estate transactions.

How is Stoneweg and your family office adapting to technological disruption, from cyber-attacks to cryptocurrency?

Our reliance on digital technologies is more important every day. We are developing a cybersecurity policy to implement the proper processes and best practices to avoid as much as possible cyber-attack related incidents.

In terms of the blockchain technology, we are currently exploring tokenisation opportunities. But unlike some other market participant, our goal isn’t necessary to be the first, but to do it properly, with a project for which it makes sense and that, in case of success, will be replicable.

A Roadmap to VC Success, the first of a new four-part research report series called Family Offices Investing in Venture Capital—2021-2022 by Campden Wealth, revealed that venture capital was the highest ranked area for next generation family members to be involved at 39%. VC took second place as the most common area last year at 33%, but the space has now proven more popular among next gens than philanthropy at 37%, management/executive roles at 24% or ESG/impact investing, also at 24%. Does this increased next-gen pursuit of venture capital investment match your experience and, if so, why are next-gens getting so involved?

Technology is indeed a trend we are monitoring closely, and we do perform investments either in direct or also via venture capital fund. We have also approached the tech angle from a real estate perspective, via a partnership with Glovo. Glovo is backed by Prosus and Delivery Hero and is a competitor of Uber Eats. It operates in southern and eastern Europe mainly. Stoneweg oversees the sourcing of dark kitchen and e-grocery stores to be rented to Glovo. The aim is to expand such initiatives to other peers of Glovo and create a multi-tenancy portfolio.

Nearly half (45%) of European family offices engage in sustainable investing, compared to an average of 34% in North America and 57% in Asia-Pacific, according to The Global Family Office Report 2021. How and in which areas has your family office embraced sustainable investing?

My family office is investing in projects designed to respect ESG criteria. Stoneweg holds more than $1 billion in multifamily housing in the south of the United States. These units are designed to host medium and low-income individuals. It is important to offer high quality premises, have energy- efficient facilities to retain and attract new tenants. The sustainability needs to be considered in all that we do and the projects we deliver and participate in.

Within the next 10 years, one-third of family offices will be taken over by the next generation but concerns loom about their preparedness, The Global Family Office Report 2021 says. Are you prepared to take over your family office and does your family have a formal plan in place?

The question of transmission is crucial to any business and even more with a family office where multiple branches are concerned. The fact that we clearly evolved beyond the classical family office model makes me think that the transition will be easier for us.

We have a solid structure in place with a team of very skilled specialists for every aspect of our activities and business continuity is guaranteed.