Better than a family office

A family business is planning to hand over the reins to the next generation. In addition to the operational aspects, they want to define a new setup for managing the company’s investments. Focusing on their own professionally led investment committee proves to be more productive than creating a family office.

Generational change is no easy task within a business. Established structures are called into question by changes in personnel. In addition to aspects related to the business, the management of assets is also subject to this process. In the past, the chair of the board and the CFO handled the investments. These tasks now need to be redefined.

ZWEI Wealth is brought into the process to make the necessary adjustments to the company’s investments. The first thing ZWEI Wealth does is to develop an investment strategy within the overall context and take over the leadership of the investment committee. Next, it is important to ensure that the wealth management setup continues to develop in line with the adjustments made to the business. This means adapting the investment strategy to the changing liquidity requirements and developing a suitable governance for the investment decisions. This way, structures and processes can develop over a period of around three years and align with the new conditions to come into effect once the next generation has taken over.

Today, the company’s wealth management has a new setup. The structure includes an efficient banking platform with global custody and a combination of five active managers and a passive investment portfolio. This enables the newly formed investment committee to focus on the investment strategy and the monitoring of the results.

« In the case of family businesses in particular, it’s extremely important to understand the business and its leaders before calibrating its wealth management to its needs. That only works if you can act independently and respond flexibly to new requirements. »

A ZWEI consultant

Facts & Figures

  • Investments of around 200m
  • Formed an investment committee including family members
  • Developed an investment management strategy aligned to the company’s other assets
  • Set up a global custody solution
  • Assessed offers from 46 banks and wealth managers
  • Evaluated five active specialised managers and one passively managed core portfolio
  • Annual management costs are 48% below the market average