Exclusive Investments and Special Solutions
A family office must enable the family members to contact and meet decision-makers and financial experts face to face. It must provide individual access to exclusive investment opportunities with attractive, institutional pricing conditions. This enables the clients to have all advantages of direct investments which would otherwise remain exclusive to institutional investors. To meet these standards, a family office must be able pool several clients in order to reach investment amounts that are often required to get access to successful institutional investment opportunities. This allows the family office and our clients to avoid high costs which would massively reduce the investment returns. This is a great advantage to more broadly accessible investment products.
Co-investments are a particularly attractive option. Co-investments are joint investments with partners and initiators. The objective is to align the interests of the originator of the investment with those of the investor family by doing the investment jointly. The key source of returns for the originator in such situations is not commission or management fees, but is rather a share of the returns from the underlying investment. However, a performance fee alone is not sufficient to align the parties’ interests. Families also expect the originator of the investment to cover at least 10% of the equity itself. If the investment fails, the initiator should be affected by a loss of its own capital as well as by a loss of profit.
‘We are particularly driven to making special investment options a “bankable” option for our clients. With our access to exclusive opportunities beyond the institutional “mainstream” due to structural requirements and volumes, we are able to structure attractive offers as part of co-investments.’
Björn vom Hofe
Head of Department
Private Equity Management