Every problem presents an opportunity and for every risk there is a solution. That is, debatably, a suitable summary of today’s landscape for wealthy families. Today’s environment presents a plethora of opportunity for those astute to identify them, but also near-record levels of volatility and risk, not only in terms of the global opportunity set for investments but also in terms of geopolitical risk, physical security, and social tensions.
Constructing a portfolio that can navigate this set of circumstances requires establishing a clear set of priorities, an acute ability to anticipate and prepare for both opportunities and problems, and a more atuned focus on risk management across the entire family office program. On the investment side specifically, families are attempting to construct portfolios which are responsive to a range of potential scenarios, from the financial consequences of geopolitical events, to central bank-induced unpredictability on rates and money supply, to a dearth of viable, new investment ideas. On the family side, wealth protection, wealth transfer, and intra-family dynamics and communications issues remain top-of-mind.