Case Study: Why family offices need highly personalized solutions

Partner content by Andreas Hadjioannou, Founder and CEO, Nomuscapital

Forbes recently highlighted that family offices are moving away from traditional trusts as wealth preservation structures and are increasingly embracing new models for structuring and managing their investments effectively, such as Special Purpose Vehicles (SPVs), Private Funds or often hybrid structures.

Anyone familiar with SPVs understands the clear benefits they can provide, notably their ability to ringfence risk and to simplify exits.

The market for SPV services is already over $12B and expected to reach $20B by 2033, so expect to hear more SPV-related news. However, SPVs are just one option for modern family offices to consider.

Ultra-wealthy families and individuals looking for efficient, global-minded ways to protect their growing assets are increasingly looking beyond private banks and institutional wealth managers for solutions. 

And while family offices are all unique, in our experience we’ve found that they often face similar challenges when it comes to structuring complex multigenerational wealth and investment portfolios. 

What exactly are these challenges?

They vary greatly, but one thing is consistent: as the global footprint of family-owned enterprises and family members expands, the need for more personalized solutions becomes unavoidable and in fact critical for effective management and control of their assets and investments.

Understanding this is what led Nomuscapital to embrace a hybrid model in our offering, positioning ourselves as a partner that is both a capable service provider and a regulated investment manager. 

Exactly how this works is best illustrated through some of the ways we help family offices today.

Even the most accomplished finance veterans need the right partners: we recently assisted an individual whose career spanned three decades across Japan, London, New York and the Emirates.

This involved setting up three investment SPVs to manage his diverse investment activity in listed securities. Each SPV maintains multiple private bank accounts in Luxembourg, London and Switzerland, which we support as the signatory and instructing party on all investment activity.

This means we work closely with the external investment advisor appointed by the principal to place and manage orders, and manage the overall portfolio held by each vehicle with the time sensitivity that capital markets require. 

An Austrian family office diversifying across the United Kingdom, United States and Emirates was also entering multiple new industries, from mining and foodtech startups to AI projects.

This cross-border and broad nature of investment activity required several relationships in order to optimize investment flows, with SPVs established in Cyprus, Hong Kong, Wyoming and the United Kingdom. 

For each entity, we provided qualified directors to ensure statutory filings, monitor the investment requirements, and to review and sign transaction documents together with the family office legal team. 

The end result: each entity is properly maintained and operates in good standing,with up to date financial and legal records, for fast and reliable decision-making by the family office for the duration of the holding period of each investment. 

Sometimes it’s less about the needs of the family and more about their relationship with an operating company, as was the case when we were contacted by the owner of a prominent listed software group in Europe.

We helped his family office establish the main holding company, which holds the stake in the listed entity, and continue to support through participation in annual general meetings, managing key issues and regulatory filings, plus liaising with investment banks, investors and other key stakeholders in the listed entity.

A United Kingdom-based family office that manages over $300 million across mostly real estate, private credit, renewables and venture capital required support from investment vehicle structuring and governance to succession planning. 

Using our AIFM license, we’re setting up a private fund that will become the family’s global investment vehicle. Designed to offer better corporate governance mechanisms, it also provides wider access to investment channels and co-investment flexibility for their family office investment partners. 

The platform is purpose-built to empower the next generation to become involved in the investment activity and management of assets, initially by communicating and providing investment reports to them and then gradually adding them as investment committee members. This will allow them to express their investment views without losing sight of the Fund’s overarching risk management rules and asset allocation strategy which sits at the core. 

Having a trusted partner that can provide both family business ownership and structuring solutions as well as investment services usually makes sense for family offices.

We recently assisted a software entrepreneur restructure the operational business and create a family office structure that owns the intellectual property through an entity in Cyprus, bringing preferential tax treatment and elements to manage the next stage of growth. 

In addition, we helped the family relocate to Cyprus under the appropriate permits, even assisting with schools and other critical aspects of their relocation.

These examples help illustrate how family offices need tailored solutions to the challenges they face, and why working with a strategic partner that covers multiple needs brings added benefits. 

A modern service group with technology as a cornerstone, Nomuscapital deliberately takes this hybrid approach to offer more sophisticated structuring, solidify investment activity, support effective governance and ensure accurate investment monitoring.

And as family offices continue to grow and professionalize, we will continue to support them with the personalized solutions they need to evolve.

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Andreas Hadjioannou is the Founder and CEO, Nomuscapital, a strategic partner to global family offices. Nomuscapital provides bespoke solutions at the family, business, and ownership levels, each tailored to strengthen family relationships and enhance business effectiveness and investment objectives.

Discover more at nomuscapital.com