The term family office (FO) is a hot buzzword in the financial services industry today
(Bowen Jr., 2004). As their wealth increases, families will at some point likely turn to
advisors to assist with the management and protection of their prosperity. These
professionals working under one roof are commonly referred to as family office
(Cestnick, 2011).
Like any business operating in the capital markets, family offices focus on the
achievement of superior performance and investment return maximization. Yet, in a
globalized world, markets have turned out to be fairly volatile during the past two
decades. In particular as a consequence of the 2008 financial crisis, markets have been
turbulent all around the world (Adair, Berry, Haran, Lloyd, & McGreal, 2009). Still
today, Europe - as an economic entity - appears to be sensible to the offshoots of the
financial and economic depression (Adair et. al., 2009).
During such times, the axiom for a family office may be contrasting: If only few
reputable investments turn out to be profitable, the primary objective rather has to be
the diversification and securitizing of assets and risks (Basel Committee on Banking
Supervision, 2011).
Hedging against inflation and economic disruptions, both gold and real estate, often
considered the classical alternative investments, have lately received increasing
attention by academic scholars and practitioners (Bond & Seiler, 1998; Enns, 1979;
Preston, 2011; Worthington & Pahlavani, 2007). Real estate, in particular, is
considered favorable by some as, unlike for gold, capital gains are not the sole source
of income and positive cashflows on income properties may be achieved on a
reoccurring basis (McKnight, 2010).
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Problem Definition and Research Objectives
- Course of the Investigation
- Family Office Business
- Family Offices
- Scope of Services and Outsourcing Considerations
- Asset Allocation for Family Offices
- Synergy Considerations for Real Estate Investments
- Real Estate Investments by Family Offices
- General Real Estate Investment Strategies
- Real Estate Market Entry Challenges
- Geographical Diversification into Foreign Markets
- Macro Perspective - Real Estate and Other Economic Forces
- Micro Perspective - Market Particularities
- Case Studies
- Outsourcing Opportunities at Ernst & Young LLP
- Club Deal Structure at Taurus Investment Holdings, LLC
- Conclusion
- Summarizing Reflection
- Prospectus and Future Research Possibilities
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper examines the decision-making process for family offices regarding real estate investments in foreign markets. It analyzes the considerations of insourcing versus outsourcing such investments and explores the complexities of asset allocation and risk management in a globalized financial environment. Key themes covered include:- The role and evolution of family offices in managing wealth
- Outsourcing and insourcing decisions for real estate investments
- Asset allocation strategies and diversification within family offices
- The benefits and challenges of investing in real estate across borders
- Case studies showcasing successful approaches to real estate investment by family offices
Zusammenfassung der Kapitel (Chapter Summaries)
The introduction of this paper defines the problem of optimizing risk-return ratios for family office investments, highlighting the need for diversification and asset allocation in a globalized market. Chapter 2 provides an overview of the family office business model, focusing on the scope of services offered and the rationale for outsourcing considerations. Chapter 3 delves into the intricacies of real estate investments by family offices, discussing general investment strategies, market entry challenges, and the importance of geographical diversification into foreign markets. The chapter explores both macro and micro perspectives on real estate investment decisions, taking into account economic factors and market-specific nuances. Chapter 4 presents case studies of real-world family office investment scenarios, exploring outsourcing opportunities and the advantages of club deal structures in real estate transactions.
Schlüsselwörter (Keywords)
This paper focuses on family offices, real estate investments, outsourcing, asset allocation, risk management, international diversification, and case studies analyzing the decision-making processes and strategies employed by family offices in a globalized financial market.- Quote paper
- Florian Manz (Author), 2013, Structuring the Family Office. Insourcing versus Outsourcing Decisions for Real Estate Investments into Foreign Markets, Munich, GRIN Verlag, https://www.grin.com/document/294248
