Few months ago, I read a post in the Cluster FO’s blog called “What is an Outpost Family Office?“. They emphasized the SMOs/MFOs needed to move from local to global, and sometimes that meant involving more wealth managers or advisors to broaden expertise. On the opposite direction, there are specialized wealth managers who need to align global mega trends to the local markets they work with. Both of them probably follow similar paths (local/specific-global-multi local).
* Local knowledge could be their first approach to create a traditional portfolio.
* Global knowledge could send them to include a wide variety of add-on investments, such as natural resources, fine art, biomedics, or aging.
* Multi local knowledge addresses deeply the previous investments to specific markets. Generic drugs, health care, hospitals, etc.
For wealth managers and advisors:
* Specific fields in which they possess in-depth knowledge: currencies, real estate, start-ups, fine art, etc.
* Global trends: Old continents losing power in favour of emerging countries, currency wars…
* Multi local approach comes from a second derivative after mixing up the previous global trends. I.e., one of the ways to invest in a closed-economy like China could be through its art market, as there are few chances of investing in its currency, and its government controls most Chinese companies.
There are cost efficient ways of filling these gaps to offer the broader services to the Family Offices’s clients. In AXIFIA Fine Art Management we offer FOs privacy and control within a selection of bespoke investments on fine art, so SFOs/MFOs could focus on their main strategies.