The volatility caused by the pandemic has hurt a swathe of sectors and benefitted others, such as internet-based working tools, forms of medical services and food logistics. In Europe family offices are significant owners of such businesses - what has been the gain to their bottom line?
A few days ago we published findings from Highworth Research, the UK-based organisation tracking the affairs and data of single family offices, about how a number of prominent SFOs were being affected by COVID-19.
In this article, Highworth’s founder, Alastair Graham, examines a number of specific European family offices. These are mini-“case studies” and we hope readers find this interesting. To find out more about the Highworth database, click here.
Of course no single family office is likely to escape the adverse financial impact of the coronavirus crisis which, in particular, has severely affected those families with substantial investments in sectors such as airlines, hospitality, oil, and retail property. That said, the majority of single family offices, even in these hard-hit sectors, have well-balanced portfolios which will be impaired but not devastated.
At a time of such investment gloom there are, however, some single family offices which, either through foresight or chance, are to varying degrees protected from the economic fall-out from COVID-19 and may benefit from the crisis.
The Single Family Offices Database from Highworth Research and its partner WealthBriefing holds data on a number of SFOs which fit this category. Here are half a dozen examples:
Greybull is a “double single” family office for the Meyohas and Goldstein families and is unusual among family offices in its exclusive focus on distressed assets. Greybull’s track record over the 12 years since the firm’s founding has been mixed. Its successful exits have included Metalrax, and Plessey Semiconductors and its alleged failures have included Monarch Airlines and British Steel. That its investment strategy continues suggests that in aggregate the firm has the skillset and the nerve required to make money from distressed assets, for which many opportunities will sadly arise in 2020.
Orascom TMT Investments S.à.r.l.
The family office of Luxembourg-based Naguib Sawiris might be said to have an unbalanced portfolio since about one third of the value is attributable to gold. Sawiris is continuing to build a portfolio of significant holdings in the gold mining sector which he regards as appropriate for an investor to hold “when there are crises around” or “for someone who wants to have a balanced portfolio” as he commented presciently in an interview in 2018 with CNBC.
His vehicle for investment in gold is La Mancha Holding S.à.r.l., registered in Luxembourg, supported by an investment team in London, and with gold mine assets reported by the company in April 2019 as amounting to $1 billion in value.
However, between 3 April 2019 and 30 March 2020 the gold price has risen by 33 per cent. Thus the value of Sawiris’ gold assets were $1.33 billion by the end of March 2020, and may be likely to rise further given the current demand for the yellow metal.