Spanish Family Office
๐ธ $B++ Single Family Office in Spain is investing for the future 3rd generation.
Principal of an UHNW Single Family Office (SFO) based in Spain advises his investment team: โYou are not working for me & my family, but for the future 3rd generation!โ
The insights below come from a conversation with the CIO of an Ultra-High-Net-Worth (UHNW) SFO based in Spain, who made wealth in financial services.
๐ง Investment Philosophy
Reputation is paramount: Prefer to work with people who are kind and respectful. That is in the DNA of the family and the operating business.
Long-term view: Endowment model with a 20-30 year investment horizon. Consider themselves stewards of capital for future generations. Working for the future 3rd generation of the family.
Slow & steady: Prefer not to lose money vs. win big, e.g., prefer 2x consistent return vs. 50x one time. Very disciplined about investing in high quality assets.
๐ Portfolio Construction
50% real estate (residential & commercial)
25% private equity buyout
20% preservation portfolio (2 years of cash flow as buffer for catastrophic event / no distributions from investments)
5% venture capital
Financial services operating business
๐ Venture Portfolio
2 fund of funds ($1.5M avg. check size)
4 direct funds ($1M avg. check size)
Digital Health, Healthcare, FinTech
๐ฎ Looking Forward
Not reinvesting with all funds
Exploring US-based healthcare buyout funds ($1B - $3B)
Looking for European buyout funds
โ๐ผ Lessons Learned
Deepen relationship with GPs: First time funds are tricky with high risk & high volatility, and not sure if GPs will go the distance. Depth of relationship with manager is critical in understanding why they are raising a fund.
Do your homework: Meet with as many fund managers as possible before making a decision. Comparing strategies, thesis, portfolios, teams, and communities will help you make an informed decision.
Diversify and donโt rush: Donโt invest in just one PE or VC fund; need to diversify across stage, sector, vintage, and geography. After a liquidity event, donโt rush to invest.
๐ Special thanks to the CIO of this SFO for sharing their insights (shared with their permission, on the condition of anonymity).
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