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Navigating the Family Office Landscape: The Do’s and Don’ts to Maximize Opportunities

In the family office landscape, selecting the right investment strategies is vital for maintaining and increasing generational wealth. Recent trends show a significant shift towards direct investment, with 68% of global family offices preferring this hands-on approach for greater control and potentially higher returns, as highlighted by Campden Research and supported by UBS’s 2020 report. This preference extends to private equity, valued for its alignment with long-term goals. However, this changing field brings new challenges, requiring careful choices to avoid pitfalls. Our analysis aims to guide family offices in this environment, focusing on key investment strategies while honoring their legacy-focused goals.

The Do’s:

Pursue Comprehensive Due Diligence: Depth Over Breadth

A deep understanding of both macro and micro-economic factors in investment decisions becomes essential in the family office context. McKinsey & Company’s Analysis provides a compelling argument for this meticulous approach, suggesting that investments subjected to rigorous due diligence typically outperform those that aren’t by a significant margin. Further emphasizing the evolving landscape of due diligence, Deloitte’s 2020 Due Diligence Report highlighted the increasing trend of integrating ESG factors into family office due diligence processes. Echoing this sentiment and shedding light on the practical implications of such strategies, Ana Judith Alma, Board Member of Directors at CEVALDOM, remarked during a recent Club family office gathering, “In our family office, we prioritize investments that we understand deeply and have shown consistent returns. By maintaining low debt and focusing on industries we’re familiar with, even during challenging times, our investments remain resilient and continue to yield dividends.” This statement not only underscores the importance of a hands-on, informed approach to investments but also emphasizes the value of depth over breadth in investment strategies, ensuring that family offices are not only profitable but also resilient and adaptive in the face of market uncertainties.

Foster a Culture of Continuous Learning

Continuous learning and adaptation are more than just buzzwords; they are essential pillars that drive success. Emphasizing team skill development, integrating market intelligence and staying abreast of industry trends are pivotal in the ever-evolving landscape of family office investments. During a recent Club Forum, Craig Astill, CEO of The Caason Group, underscored the necessity of adaptability and foresight in investment, stating, “It’s crucial for family offices to focus on industries that are not only profitable but also future-ready.” He illustrated this by recounting his pre-2008 actions: in late 2007, amidst market uncertainties, they strategically divested, positioning themselves with substantial cash reserves. Although not precisely predicting the impending crisis, this prudent move fortuitously secured their stability through the economic downturn, highlighting the significance of readiness and adaptability for long-term resilience and growth. This forward-thinking approach aligns with the broader trend of embracing digital transformation. As the investment landscape becomes more complex, leveraging technology and digital tools becomes indispensable. Capgemini’s 2021 Digital Transformation Report underscores this, noting that over 70% of family offices that embraced digital transformation reported improved operational efficiency and better investment decisions. Moreover, the emphasis on continuous learning is further highlighted by a recent PwC’s Family Office Survey, which showcased a significant increase in investment toward learning and development tools and platforms. This growing trend indicates that family offices are not only recognizing the importance of staying updated but are also actively investing in resources to ensure they remain at the forefront of industry knowledge and best practices.

The Don’ts

Overcentralizing or Overdecentralizing Decision-Making

Decision-making is a critical component that can significantly influence outcomes in the investment landscape. Striking the right balance between centralization and decentralization is paramount. On one hand, overly decentralized structures, as highlighted by a study from the Stanford Graduate School of Business, can lead to challenges in maintaining cohesion. With too many decision-makers, the process can become cumbersome, resulting in delays and potential misalignments with the family office’s overarching objectives. This lack of agility can be detrimental, especially in a rapidly evolving investment landscape where timely decisions can be the difference between seizing an opportunity or missing it. Conversely, an overcentralized approach, where power and decision-making are concentrated within a tight-knit group or even a single individual, presents its own set of challenges. While it might offer the allure of swift decisions, it runs the risk of becoming an echo chamber, devoid of diverse perspectives and innovative ideas. This narrow viewpoint can stifle growth, innovation, and adaptability, making the family office susceptible to biases and potentially overlooking lucrative investment avenues. Ana Judith Alma, Board Member of Directors at CEVALDOM, highlighted the importance of adaptable governance in family offices in a recent forum, advocating for structures that evolve with the family and its leadership, rather than remaining overly centralized and static. This approach ensures decision-making processes are resilient, responsive, and reflective of the family’s values and vision. KPMG’s 2019 Global Family Business Report supports this, indicating that the most successful family businesses often strike a harmonious balance in their power structures, integrating legacy-driven insights with external expertise for an approach that’s agile, informed, and poised for success.

Undervaluing Soft Skills and Interpersonal Dynamics

In the intricate and often complex realm of family offices, where business decisions are deeply intertwined with familial relationships and legacy considerations, the role of soft skills and interpersonal dynamics emerges as a cornerstone. Beyond the realms of technical acumen, financial strategy and investment prowess, lies the nuanced world of emotional intelligence, which often dictates the harmony and success of family office operations. Mina Nozari, Chief of Staff at LVC Global Holdings, during a recent Club family office gathering, noted that: “Family offices often face challenges when members have divergent values or moral standards. It’s vital to address these differences early on, establishing safeguards to protect both the family office and its enduring legacy.” This perspective is further bolstered by the Family Business Institute’s research, which revealed that interpersonal relationships and a deficiency in soft skills are often the primary catalysts for family business breakdowns, even more so than business strategy or financial missteps. This highlights the undeniable fact that the human element, characterized by effective communication, empathy, mutual respect and understanding, plays a pivotal role in the success or failure of family-driven ventures. 


The family office realm often requires a blend of strategic acumen, emotional intelligence and a keen understanding of both the macro and micro dynamics at play. As we’ve explored, maximizing opportunities isn’t just about rigorous due diligence or embracing digital transformation, though these are undeniably crucial; It’s also about fostering a culture of continuous learning, striking the right balance in decision-making and valuing the often-underestimated power of soft skills and interpersonal dynamics. The most successful family offices blend family insights and values with external expertise, maintaining agility and forward-thinking to safeguard their legacy and ensure sustained growth as the investment landscape evolves. To have first-hand access to the exclusive insights presented in this article, be sure to register for our upcoming family office gathering: https://pif.events/registration-form/