Posts by Fiducia Partners

Fiducia Partners Insights - Fundamental Principles for Investing Success

Fundamental Principles for Investing Success

September 13th, 2019 Posted by Investment, Planning 0 thoughts on “Fundamental Principles for Investing Success”

No investment is without risk but as seasoned investors will tell you there are a few principles you can follow for making better investment decisions. The principles I have listed below all try to help you to focus on that which is in your control rather than taking chances on that which isn’t. 

1.Define your investment targets

Investing is not an end in itself. Whether you’re looking to meet a specific need or investing for future generations the target will define the strategy. However when defining targets I would never recommend investing for the ‘short’ term. Short term usually means high risk. When buying an investment at a favourable price it may take time for the market to recognise its true value and for you to make a healthy return. 

As Warren Buffet says, “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”

2.Find your risk tolerance

No one enjoys losing money but some can tolerate the risk of losing money more than others. I’ve spent a lifetime investing and working with investors and most set their expectations on returns too high but are not prepared to take the corresponding risks. Finding your risk tolerance should include an assessment of what you could withstand to lose, should your investments not pan out, and still remain in a stable financial position. If you’re not prepared to risk even that then you’re on the low risk, low reward path. 

3.Don’t be blinded by greed

No one likes to think of themselves as greedy yet it often blinds people from seeing reason. Many investors have regretted investments that supposedly offer high and safe returns but what they fail to see are the hidden costs and risks involved. It goes back to the saying, if something seems too good to be true, it probably is.

4.Diversification is vital

Diversifying so you’re not over-exposed to any given asset type, country, sector or stock is critical and a small amount of diversification provides enormous benefits. Five investments are better than two, ten are better than five but this is only true until you get to the point where the costs for adding additional investments become greater than the benefits. 

5.Think and act intelligently

Many investors are successful in building a sound investment portfolio but fall when they fail to stick with it when the markets falter. Successful investors don’t allow themselves to be swayed by the latest news and short-term variables. Patience and stamina are required. 

6.Review regularly

As asset values rise and fall your portfolio can shift away from your risk profile and objectives. You may need to adjust your original weighting and regular reviews also give you a chance to consider your own circumstances.

7.Remember what your money is there for

While there’s a lot to be gained from a good investment strategy and careful money management, remember, not every penny must be invested for profit. Money is also there to be spent on what makes you happy, on what makes other happy. That too is valuable. 

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For more of my insights into the world of family wealth visit the Fiducia Partners website

Fiducia Partners Insights - What Happens After Selling The Family Business

What Comes After Selling The Family Business?

August 30th, 2019 Posted by Business, Family Wealth, Planning 0 thoughts on “What Comes After Selling The Family Business?”

Succession planning can be one of the most challenging aspects of owning and operating a family business and sometimes the right succession plan is to sell. This might be the case for multiple reasons including destructive family dynamics, conflicts in vision, lack of interest by the next generation, lack of passion by the current generation but also reasons that any business might face such as concern about increased regulation or exposure to potential liabilities. 

Whatever the reason, after the decision is made to sell and the deal is done, both the family and individuals within it can struggle with the loss. Having worked with many family businesses over my life it is very clear that business and personal aspects are deeply interwoven in family-owned businesses. The business is often the result of generations of a family’s hard work and devotion and may have created expectations about continuity, tradition, unity, dividends and family employment.

On the positive side if the business is sold for a substantial sum it can provide financial freedom for the family or individuals within it to accomplish other goals. Some families may choose to create a family office and channel their shared goals and vision into its management and investment decisions. Other families might choose to start a new family venture, without the problems that led to the sale of the previous business. Others may choose to manage their money individually. 

Whether or not family members choose to create a family office or manage their money individually, a large amount of liquidity presents its own issues including how to preserve it. This would usually involve making decisions about setting up trusts, diversifying assets across industries and markets and how philanthropic they want to be. 

But even with a plan for what to do after the sale of the business, it is very likely that members of the family may struggle with feeling like they’ve lost a part of their identity. Particularly if the business was founded several generations ago, it can be hard not to feel a sense of failure and guilt of letting down the family or failing to fulfill the legacy passed to them. Without the company, the family’s perception of itself and its purpose can change. A company often holds families together by giving members a shared identity and closeness established by previous generations. It’s an unfortunate reality that selling the business that glues the family together may mean some members of the family slip away but it also provides an opportunity to create opportunities to connect with one another around social events rather than in the boardroom. 

Of course for some families, the sale of the family business is a welcome opportunity for individuals to choose their own paths. Whatever comes after the sale of the business, one thing that is certain is that having a solid plan for how to work, live and invest following the sale of the business is key. The family’s success may no longer be tied to having its name on the wall but its success may continue in other ways with family members following their passions or working together to preserve a financial legacy for the next generation.  

If you’re considering your options for business succession and would benefit from outside help please do get in touch with me via Michael@fiduciapartners.com. Among our services as a multi family office Fiducia Partners provides discreet introductions and expert support for strategic challenges.

If you enjoyed this article, please let me know by clicking on the thumbs up icon above. I really appreciate receiving the feedback.

For more of my insights into the world of investments and family wealth visit the Fiducia Partners website

Fiducia Partners Insights - How the 0.01% travel

How The 0.01% Travel

August 15th, 2019 Posted by Family Wealth 0 thoughts on “How The 0.01% Travel”

It’s August, which means London is empty as people fly off to enjoy sunshine, sea and relaxation. And for ultra-ultra-wealthy families this doesn’t involve a delayed flight and disappointing hotel, it means skipping the security queue and jumping on a private jet to arrive at their destination unflustered and well rested. It might also mean staying on a superyacht and enjoying the waters of Saint-Tropez or Santorini in complete privacy.

It’s reported that the mean average wealth of a private jet owner is around $1.5 billion, so those in a position to own one aren’t even the 1%, or 0.1%, they’re the 0.01%. The costs associated with owning a private jet only begin with the purchase price which can be anywhere between $3 million to $90 million. Depending on the size of the aircraft the annual running costs from the pilot, ground rent, fuel, air stewards, and insurance can be anywhere between $700,000 to $4 million. Then there’s the fact that according to The Jet Business founder, Steve Varsano, (you may have seen their magnificent showroom on Hyde Park corner) most jet owners change their aircraft every four to five years.

So while the idea of flying in unhassled luxury is a very nice one, with such enormous costs involved what makes owning a private jet worth it, even for a billionaire? The answer, I think, is that while it’s lovely to be able to have a private jet on hand to take you to your holiday, the reality is that most private jet owners use it to save precious time on business travel. Not only does it enable you to skip the security queues but also gives you the flexibility to fly at a moment’s notice and take off and land in an airfield close to home and the destination. It also means meetings can be conducted during travel, in total privacy and security. That said, it’s still not a purchase most billionaires choose to make with chartering private jets and memberships to clubs being big business.  

So, if owning a private plane is costly but does have its practical uses, what about owning a superyacht? I think it’s no exaggeration to say that of all the things a billionaire’s money can buy, none is more decadent than a superyacht, usually defined as being 80ft or longer. Britons actually own the second largest share of the world’s superyachts and unlike property or rare art, superyacht values depreciate so they’re certainly not a smart investment decision. For those that can afford one, they represent the ultimate in luxury, privacy and status. Head to Cannes, Positano, St Barts or Capri and you’ll probably see a superyacht, or two, out in the bay.

Eight out of the ten most expensive luxury acquisitions of all time fall in the superyacht category, led by the $600 million 180-meter Azzam, owned by Khalifa bin Zayed Al Nahyan, President of the UAE. The Azzam has 70 crew members and even its own missile defence system but is so large it can only dock at certain locations. I once heard someone say that owning a superyacht is like running a business except the balance sheet shows you in the red. The enormous costs involved include year-round employees, insurance, maintenance, fuel and dockage which in high season at the most sought after marinas can easily cost over £3,000 a night. When in use, stewards need to be hired with a ratio of one guest to one steward considered optimal. The rule of thumb is that the annual operating and maintenance costs will run at 10-15% of the boat’s purchase price. 

But for those that have the means to take on all these costs, the joy of owning a superyacht lies in the incredibly private and exclusive experience it affords, highly valued by the ultra-wealthy. Increasingly, they’re also being used to explore lesser travelled exotic places where luxury accommodation is lacking, unless you bring it with you. And the other reason the ultra-wealthy might buy a superyacht? Because they can. 

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Fiducia Partners Insights - Investing For Your Great-Grandchildren

Investing For Your Great-Grandchildren

August 2nd, 2019 Posted by Family Wealth, Investment 0 thoughts on “Investing For Your Great-Grandchildren”

For many ultra-wealthy families a successful investment is one that lasts decades and benefits generations. Making investments that will still generate income for your great-grandchildren is not easy but it is the way that many family offices need to think. Such investments don’t tend to be exciting and high-risk but are wellconsidered and require patience.

I see a lot in the news about how so-called millennials are shortsighted, wanting instant gratification and not looking beyond short-term goals. In other words, they don’t have patience. But in some ultra-wealthy families, millenials will now be inheriting investments and investment strategies that have spanned generations. They will become stewards of wealth that may have been preserved for 5, 6, or 7 generations. With this kind of wealth and legacy there is no short-term thinking and holding investments for 100 years or more and creating strategies to match is not uncommon. 

Creating an investment strategy that covers the next 100 years forces you think about how you might weather all the difficulties that could hit the market, be it a war, depression, economic crash, or climate change. Take family owned wine and champagne houses as examples. Many have been owned for generations and still nurture the soil in the vineyards that their great great grandparents bought. The Codorníu family has been producing wine for four hundred and fifty years and has had vineyards on their property since 1551. While the company leaders in each generation will have taken the business in a slightly different direction the overall aim to be able to pass the company to the next generation hasn’t changed. They may not have a detailed investment strategy that looks beyond 20 years but decisions about planting grape vines takes long term vision, as they can produce for hundreds of years. At the family owned Louis Roederer champagne house, they began preparing for climate change in 1999 by developing techniques to train the vine roots to push further down into the soil and started farming organically and biodynamically to adapt to the more extreme weather conditions that we’re seeing and will likely only intensify. Without this long-term view the increasingly dry summers and flash downpours could have ruined their much-prized vines. 

In other industries too you often see influential families leading innovation in the knowledge that it may benefit them in the long term. The Swedish Wallenberg family has recently invested around €300 million in AI programs in Sweden because it wants the country to catch up in the global AI arms race which is not only necessary for the country as a whole but also the companies that they control. Two of their companies, Ericsson and Saab use a lot of advanced software and antenna technology so if Sweden’s infrastructure falls behind in those areas so too does their company. The large investment they have made doesn’t directly benefit them and their company in the short term but will do in the long term, which is the time frame in which they are thinking. 

Outside of ultra-wealthy families very long-term investments are common in large institutions such as churches, universities and schools. Oxford and Cambridge university colleges collectively own 126,000 acres and have held on to some of their property assets for hundreds of years or plan to. Oxford University Queen’s College owns an Isle of Wight farm bought from Henry VIII and Trinity College owns a 999-year lease on the O2 arena indicating their long-term ambitions for the asset. 

Like Oxford and Cambridge, family offices also tend to favour growth assets like property, which often make up a large portion of their portfolios as they have historically performed the strongest over many decades. Such assets may be subject to market fluctuations in the short-term but in the long-term the trend has been up.

These are just a few of the ways ultra-wealthy families may use their investments to benefit their great grandchildren and beyond. It is sad however that I have also seen some families fail to think long term and preserve their wealth with one of the main reasons for failure due to a lack of preparedness on the younger generation’s part. It’s my opinion that families must fully prepare the next generation for the wealth transfer as if training them for any skilled profession. Managing and growing wealth is not a project that can be done on the weekends, it takes dedication, skill and of course patience. 

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Fiducia Partners insights - Investing in AI

Investing in AI: The Potential and the Pitfalls

July 18th, 2019 Posted by Entrepreneurship, Investment 0 thoughts on “Investing in AI: The Potential and the Pitfalls”

This week I wanted to write about something that might provoke you to think about a new investment area. Artificial Intelligence. I can’t profess to be an expert in this sector however AI is a technology many investors and entrepreneurs are very excited about so I have done my research and am continuing to do so as the technology evolves. 

Artificial Intelligence has been big these last few years and is only set to grow as the technology evolves. According to industry research firm TechEmergence, AI technology will have the single most radical, transformational impact on business and society. We all already have virtual assistants like Siri and Alexa in our phones and in our homes. But beyond virtual assistants, a PwC report estimates that between revenue from new services and the cost savings it delivers due to improved productivity, AI will add $15.7 trillion to the global economy by 2030

For personal use Google, Microsoft and Apple have been integrating AI technology across their products but it’s also a key technology in the development of self-driving cars and algorithms that e-commerce companies use to predict what you might want to buy based on your online behaviour. It’s also already being used in healthcare to preempt health issues – I read that in one UK hospital it managed to reduce cardiac arrests by 20%. And last month Amazon was granted a US patent for drones to provide “surveillance as a service” looking for signs of break-ins or people lurking around the property so it could inform the police. 

Industrial companies are using AI to automate machinery, monitor data about production processes and make adjustments in real time, learn and operate machinery and equipment without needing human help. With the advancement of the technology there are possibilities for autonomous trucks, which will allow for 24/7 runtimes. 

There is also huge potential in the water and electricity industries where companies are looking to replace aging and no longer fit for use infrastructure with smart solutions that integrate AI, sensors and internet communication. Such solutions are likely to allow for better data and analytics leading to more efficient use of resources and reduced costs.  

But however exciting the prospects for AI are, there are still lots of unknowns about it and how the technology will evolve and be used in households and businesses in the future. As many others will be, I am cautious about the future of AI and how its use will be governed. In terms of its commercial use, it seems to be being used in some fantastic ways but the debate often comes back to its negative role in society by making jobs redundant. In the news only this week the IPPR think-tank released a report projecting that 10% of women, and 4% of men are at high-risk of losing their jobs to machines. 

Beyond the risk of job losses, there are other concerns too about how far we go with the technology.  Elon Musk this week revealed plans to connect human brains to a computer as part of his vision to allow for “symbiosis with artificial intelligence”, as he put it. This to me seems quite alarming. Elon Musk is well known to be an eccentric entrepreneur with a high-risk appetite for investing but there’s no doubt he’s involved in the cutting-edge of future technology. Perhaps what for most of us seems futuristic and alarming right now could well be the norm in 10, 20, or 50 years time. As investors we have to decide whether we’ll take the risk and invest in the unknown or if we’ll stay true to our core industries. 

One family that has taken a giant leap into AI investments is Sweden’s Wallenberg family. The family is one of the foremost investors of artificial intelligence in Europe, investing around €300m in its AI program WASP, in a mixture of AI startups and a business transformation company. Their large investment is motivated by their hope that Sweden will catch up in the global AI race which they think is necessary for the country as a whole, but also the companies they control. They can’t afford to lag behind. 

I would suggest that for most investors AI remains a niche investment area that if they can tolerate high-risk they might consider entry into. Laith Khalaf, a senior analyst at Hargreaves Lansdown, advises caution saying that investors need to try and remember the lessons of the tech stock boom which had largely been littered with failure. In essence, I think it’s not for the uninformed or those who just have a ‘fear of missing out’. Early investors of success stories will no doubt make large profits but AI is here to stay so there will also be future opportunities to get involved when there are less unknowns. 

Fiducia Partners Insights - What is a family office?

What is a family office?

July 4th, 2019 Posted by Family Wealth, Investment, Planning 0 thoughts on “What is a family office?”

The term ‘family office’ is not widely known, and for good reason. While there is no strict definition, a family office is a wealth management company which invests assets on behalf of wealthy individuals or families. The term is not well known because quite understandably these families don’t need, or want, to advertise the fact that they have money to invest. If they did they would be inundated with requests. There are both single and multi family offices, single are normally run by a family member or appointed CFO who looks after one family’s wealth and multi are run by professionals who serve more than one family. 

Family offices tend to be so discreet they are only really contactable through highly selective referrals and trusted networks. As one executive said at a family office conference in Dubai last year, “we’re the most important part of the investment landscape most people have never heard of”.

And not only do family offices discreetly manage the family’s investments, they manage all the financial affairs of a family such as staff wages, accounting and tax planning, property and estate management and succession planning – while running businesses and making investments generates wealth, without proper financial planning and succession planning, preserving wealth is very challenging. Therefore family offices do everything it takes to generate and manage wealth to ensure it will be passed safely down from generation to generation.

Now, not every wealthy family has a family office, but those that do often choose to have one to avoid having to pay someone else to manage and invest their money, thereby increasing their margins. It also allows them to invest without the sector and time constraints that traditional VC firms have, usually trying to exit in 5 years or less. Because of the emphasis on passing wealth down through the generations, family offices tend to make long-term investments which is why real estate often makes up a significant part of family office portfolios. 

How do you find family offices for investment?

For those seeking investment from family offices, you will have to work hard to find them, let alone get in contact. Finding family offices is really a case of networking and receiving personal introductions. Without already knowing the right people finding a credible person, such as a capital raiser, to introduce you to family offices is a good way of starting. There are also several family office conferences each year which can provide a ‘way in’ however I am aware of several families who tend to avoid conferences, particularly those where start-ups pay a fee to present in front of investors. 

When seeking family offices for funding, to avoid wasting your and their time, it’s important to ensure that your business aligns with the family office’s investment criteria and philosophy. Many tend to invest in companies that directly or indirectly relate to the core business upon which their success is built. Also unlike VCs, who are often brutally focused on the figures, family offices value having good chemistry with the person they are funding. Therefore after having received an introduction, getting along with the family office decision makers, usually the investment manager and family patriarch, is essential to receiving their backing.

From my knowledge of family offices, however, all the hard work it takes to be introduced is worth it. Family offices make great investors for entrepreneurs because of their focus on relationships. Of course they want to see a return on their investment but because they take a long-term approach they tend to have more patience than institutional and private equity investors while also serving as experienced mentors with excellent connections. 

For more of my insights into the world of family wealth visit Fiducia Partners insights

Fiducia Partners Insights - Billionaires Giving Money To Charity Not Children - LI-W

Billionaires are giving their money to charity instead of their children

June 20th, 2019 Posted by Family Wealth, Planning 0 thoughts on “Billionaires are giving their money to charity instead of their children”

Children of ultra-wealthy families can usually grow up safe in the knowledge that a sizable inheritance will come to them. But now, it seems that many ultra-wealthy families are choosing to give their wealth away to charities rather than to their children. While charitable giving is often part of a person’s will, more and more families are deciding to give everything (or almost everything) to charity, leaving their children to make their own way and fortunes. It’s also a popular notion to leave enough for children to live “comfortably” but not so much that they will lead an idle, privileged lifestyle.

The idea of giving large chunks of wealth to charity instead of heirs was given lots of attention in 2010 when Bill Gates and Warren Buffett set up the Giving Pledge where wealthy families promise to dedicate at least half of their fortunes to charitable causes during their lifetimes or in their wills. Co-founder Warren Buffett is often hailed as the ‘most charitable billionaire’ and has planned for 85% of his wealth to go to charitable organiations with the remaining 15% to go to his children – although 15% of Warren Buffett’s wealth is still around $12.6bn. And Bill Gates, worth over $80bn, is reportedly leaving his three children $10m each explaining “I definitely think leaving kids massive amounts of money is not a favour to them”. 

Among the 200+ high-profile signatories who have joined the Giving Pledge are Richard Branson, Elon Musk, and MacKenzie Bexos, the ex-wife of Amazon founder Jeff Bezos and one of the wealthiest women in the world. 

While supporting charitable causes is one motivation for such a decision, another motivation that drives many ultra-wealthy people to make this decision is to protect their children from wealth’s pitfalls, as the examples below demonstrate. 

The action film star Jackie Chan, worth around $350m, isn’t planning to leave any inheritance to his only son saying; “If he is capable, he can make his own money. If he is not, then he will just be wasting my money.” Simon Cowell too, who is worth an estimated $550m says; “I don’t believe in passing on from one generation to another” and plans to leave his fortune to charities. 

I can well understand the concern that multi-billionaires may have with leaving such vast fortunes to their children without them having worked for it but families of more modest fortunes (although still multi-millions) are also considering limiting the funds they will pass down to the next generation. Having spoken with some of my families about their feelings on inheritance, some are concerned about the security of a large inheritance leading their children to lack purpose and the ambition to achieve their own success.

These are legitimate concerns but one has to execute such plans carefully. Limiting children’s inheritance without discussing it as a family can create unnecessary confusion and discord but working together to decide on core family values and how the money might be used instead is a good course of action to take. Richard and Joan Branson for example will leave most of their money to charity which their children are in favour of, both of whom already build their careers on working to make a positive difference to other people’s lives. 

Equally, gifting the money to a foundation of your creation can be a good course of action. As a family you can decide on how the money is used and what causes you want to support. It also allows children to have a say and to work for the foundation, should they wish. For example Chuck Feeney, once worth $8bn, has donated 99.99% of his fortune to his charitable foundation and is down to just $2m. His children are understanding having said about his plan; “It is eccentric, but he sheltered us from people using the money to treat us differently. It made us normal people”.

The advice I give to my families on this subject is that if they make the decision to limit inheritance and give a large portion to philanthropic causes, their decision should be properly communicated to all heirs so as to promote harmony and avoid any surprise or confusion.

Fiducia Partners Insights - Sibling Rivalry in the Family Business

Sibling Rivalry In The Family Business

June 14th, 2019 Posted by Business, Family Wealth, Planning 0 thoughts on “Sibling Rivalry In The Family Business”

Over my many years of working with wealthy families and their businesses, sibling rivalry is a problem I have seen all too often and has the potential to devastate both the family and the business if not properly managed. Family business leaders are usually most concerned about sibling rivalry when they start to consider succession planning and what will happen when they are not there to mediate disputes. But where siblings are actively involved in the family business before succession if sibling rivalry can be managed and squashed early on then the matter of dealing with it after the death of the business leader becomes far easier. 

When rivalling siblings are actively involved in the family business it is often either emotional or strategic and to find solutions to the rivalry it is first important to determine the underlying causes.

Emotional Rivalry

A common example of emotional rivalry that I have seen is where siblings compete for their parents’ approval or recognition. While this is common in personal family lives and particularly when children are young, it can extend into adulthood and competition in the family business. And as the siblings are in competition with one another, they are not working together to further the interests of the business as a whole. They may actively avoid working together so they can prove the success is theirs alone. In cases such as this, the solution is to work on the parent/child relationship rather than the sibling relationship. This might mean formalising recognition and reward to remove any potential for favouritism, or the perception of it. 

It might also mean putting in place the requirement that family members must take employment outside the family business before joining. While I often recommend this as a good way of gaining exposure to alternative business techniques, in the case of sibling rivalry it also allows siblings to achieve success that is recognised outside of the family. Where siblings have achieved success separate from the family, respect for one another and for oneself supersedes the desire for parental approval. 

Strategic Rivalry

Strategic rivalry in family businesses often occurs when siblings have conflicting values and business styles and perhaps different attitudes towards risk. While such differences may not matter in their personal lives, when working together in the family business and with their livelihoods depending on one another these differences can present problems. 

I suggest that the solution to dealing with strategic rivalry is found in solid business and strategic planning. Drawing up a solid business plan and then sticking to it should help to avoid disagreements over strategic direction. It’s also crucial to avoid relying on handshake agreements. Formalised contracts, job descriptions and operating procedures can’t be misinterpreted and therefore set out expectations from the beginning. 

One high profile case of sibling rivalry over the family business that I recall is when Reliance Industriesfounder Dhirubhai Ambani died in 2002 without leaving a will, let alone a succession plan for the business. His eldest son, Mukesh, took up the role of Chairman while his youngest son, Anil, was made vice-chairman. Mukesh reportedly tried to push Anil off the board which led to a nasty legal battle resulting in a de-merger of the company in 2005, led by their mother. Even when heading their own businesses their feud continued until 2010 when their mother intervened again to issue a non-compete agreement. Today, Mukesh is personally worth around $43bn whereas Anil is worth around $1.5bn. While it is unclear why the two brothers’ feud first started it is likely that their rivalry was both emotional and strategic and without solid agreements about how they would work together once their father past away their rivalry was free to spiral out of control. While no one can know for sure, it wouldn’t be unrealistic to speculate that the two arms of the split up business would have faired much better if it hadn’t broken up and the two brothers had been able to work together.

If you enjoyed this article please let me know by leaving a comment. I really appreciate it.

Blue-Marble-Private-Titanic

Ultimate Travel Experiences For Extraordinary People

May 9th, 2019 Posted by Family Wealth 0 thoughts on “Ultimate Travel Experiences For Extraordinary People”

With spring now in full swing I’m starting to think about taking some time away from London, which for me often means escaping to my beloved Mallorca. But what about when you’re looking to go somewhere off the beaten path or have a completely unique experience?

For many of my clients, this is what travelling is all about as they work extremely hard to create and sustain their family legacy so when they take a break, they want to use it to do something or go somewhere truly amazing. 

I am therefore delighted to announce that Fiducia Partners has formed an alliance with luxury travel company, Blue Marble Private, which curates some of the world’s most extraordinary and unique travel experiences I have come across and that we can now offer to Fiducia Partners’ extraordinary clients. 

When I had the great pleasure of meeting Elizabeth Ellis, the founder of Blue Marble Private, it quickly became clear that for those on a never ending quest to go one step further than most, Elizabeth is the person to go to. Before founding Blue Marble Private she spent two years travelling the world, making global contacts and expanding mindsets on what’s possible to be able to offer unique, creative and thrilling travel experiences.

One such unique experience Blue Marble Private offers is to take a submarine to 3,800 metres below sea level to reach the wreck of the Titanic. Elizabeth, a certified OceanGate Affiliate has been working with OceanGate Expeditions, the US firm who is operating the six-week scientific and exploratory expedition that provides adventurous citizen explorers an opportunity to work alongside researchers and content experts in an effort to document and preserve the historic site. This trip is the ultimate for those wanting an exclusive experience as far fewer people have visited the wreck of the Titanic than the number of people who have been to space or summited Mount Everest. As a certified OceanGate Affiliate, Blue Marble Private is authorised to offer space on the 2019 expeditions and whilst space is limited for this year there is space on the 2020 expedition. This trip is made even more exclusive by the fact that rust forming bacteria is rapidly consuming the Titanic which is expected to be eaten away within 15 to 20 years, so it really is a sight that not many people will be able to see. 

And for another trip of a lifetime, Blue Marble Private’s Antarctica trips sounds otherworldly. Elizabeth spoke of coming up close to Emperor penguins and flying over the frozen Antarctic Ocean to see its blue ice tunnels. I’m told that access to the interior of Antarctica is severely limited each year so this isn’t a trip many people can say they have done.

For something closer to home but no less exciting, Blue Marble Private also recently organised an experience where clients flew in formation with Breitling’s fighter jet team. Their clients flew at 400mph over France’s Burgundy wine region and continued the experience on the ground with the region’s exquisite food and wine – a perfect combination of exhilaration and relaxation.

If I’ve tempted you into forgoing the usual and wanting to take an extraordinary trip you can take advantage of our alliance and contact Elizabeth Ellis – Founder of Blue Marble Private – on elizabeth@bluemarbleprivate.com or +44 203 411 2191.

Fiducia Partners Insights - Passion Investing An Introduction to Classic Cars

Passion Investing: An Introduction To Classic Cars

February 14th, 2019 Posted by Investment 0 thoughts on “Passion Investing: An Introduction To Classic Cars”

Investing in your passions can be extremely rewarding and for many of the world’s wealthiest people this means investing in classic cars. Making passion investments not only allows you to enjoy your wealth but also diversifies your portfolio and has the potential to provide a return.

Today the London Classic Car Show begins and 40,000 owners, collectors, experts and enthusiasts will attend so I’ve decided to write an introduction to classic cars as a passion investment.

Firstly, like any passion investment, and I have previously said the same about investing in fine art, I don’t believe you should invest in classic cars unless it is a real passion of yours. That said, there are still returns to be made and over the past 20 years cars have made phenomenal tax free gains. While this has slowed over the last couple of years, according to the 2017 edition of the Coutts Passion Index since 2005 average prices of classic cars rose fourfold.

This increase coupled with the tax exemption of cars is a big lure for those thinking about them as investments but they also require a significant amount of upkeep and maintenance, more so than some other passion investments. Classic cars require huge amounts of maintenance and original parts can be rare and expensive. 

While investing in classic cars is not one of my passions, I have helped many of my clients find their next car investment or seek specialist advisors and over the years I have gathered that there are a few key considerations when it comes to investing in classic cars.

 

1. Seek Independent Advice

For those who want to start investing in classic cars the first thing you should do is to seek independent advice. For every model there are thousands of particulars that affect the value of the car and an independent advisor can steer you towards good investments. They can also help you by inspecting and verifying potential acquisitions for authenticity to make sure you’re not duped by unscrupulous sellers.

2. You Need To Love It

There’s no guarantee that any classic car you buy will appreciate so like any passion investment make sure you buy a car for the love of owning and driving it. To minimise risk it’s also a good idea not to view cars as a central component of your investment portfolio and to only use surplus funds after the base and core elements of your portfolio have been set. 

3. Rarity is Key

Rarity is a key driver of demand and asking price with classic cars along with owner history. The cars that command the most value have had as few owners as possible and come from low-production runs. Provenance and the profile of past owners also has an impact on the value and stability of a car’s worth. 

4. The Less Restoration The Better

A car in an unrestored state means it won’t have had patches cut out and welded in and it can be restored to the highest standard. Finding classic cars in an unrestored state is becoming more of a rarity but with the right connections or broker you have a better chance of hearing when such cars become available, often when an owner dies.

 

Along with these considerations, the main piece of advice everyone who invests in classic cars gives is to not lose sight of the joy to be had from classic cars and to remember that you’re buying them first and foremost as a hobby, rather than an investment.

If you’re thinking about investing in you passions, please don’t hesitate to get in touch with me and I would be delighted to make an introduction to the right specialist to help you. 

 

If you found this week’s article useful, I would be very grateful if you could let me know by leaving a comment.

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