Family offices come from all walks of life whether they made their fortunes in the financial industry, manufacturing or anything else you can imagine, and once you reach that pivotal point as a family you have to start thinking about the future and investing in generational wealth, which is what inspired this post.
First and foremost, even though investing in real estate has historically been a sound move, it’s also important to diversify your portfolio in undervalued non-correlated assets that promise safety of principle and favorable risk-adjusted returns. At the same time, how do you diversify and choose where and when to invest whether it’s in the stock market, real estate holdings, etc.?
Secondly, timing is everything and bringing in outside experts that have their finger on the pulse in their respective areas/markets can be worth their weight in gold. For example, if your family office is looking to acquire single family rental properties around the globe, why not bring in top consultants that have the experience, track record and tenacity to help you understand the multitude of risks and potential rewards?
And what’s most critical: How do the dollars actually make sense in the end? Your family office may see more value in acquiring hundreds or thousands of single family homes to rent them out in pursuit of predictable income streams whereas another family office wants to gamble on new developments that may or may not pay off.
It all comes down to risk tolerance and the most efficient allocation of capital to the best risk adjusted opportunities at opportune times.