One of the main responsibilities of a family office is to prevent risks to the family assets. We implement an integrated risk management system tailored to the requirements of large family assets and which, if necessary, makes dynamic interventions into the allocation of assets.
Our experience with crises in the past has shown that this can prevent loss of capital and generate stable returns.
Our risk management is based on four guiding principles:
- Avoid risks that cannot be evaluated or adequately covered by expected returns.
- Reduce risks that threaten the preservation of capital or are too high in terms of your individual risk acceptance.
- Transfer risks that only require low insurance premiums and that should temporarily not be borne.
- Accept risks with attractive prices and that promise good returns.
With our tactical risk management system, we are able to make forecasts about the development of the financial markets. Moreover, our excellent network of contacts in leading banks, asset management firms and companies allows us to gain valuable insights into future risks. This holistic approach to data collection and processing ensures that we always use all available information to protect the assets of a family.
Another component of our risk management is a coordinated, strategic asset allocation comprising nominal and real values which promises excellent levels of security even without active interventions. Direct investments in real estate and other investments play a central role in this context. Unlisted investments can generate returns regardless of the capital market – these serve to stabilise the assets whenever the markets are performing poorly. A forest in Canada or a vineyard in France has almost no interaction with the stock or bond markets.
‘No matter how sophisticated a method of making forecasts is, one thing remains true: the future is not totally predictable. This is why we ensure that our asset allocations keep the assets as stable as possible, even in the event of an unexpected development.’
Dr. Nicolas Schoeller
Senior Family Officer