Identifying the most relevant and appropriate systems and sources for information, data analyses and protection
Identifying the most relevant and appropriate systems and sources for information, data analyses and protection.
Single and multi-family offices alike must have robust information technology systems in place to effectively manage and monitor assets and performance. Multi-family offices in particular must meet stringent internal and external reporting requirements, to both regulatory bodies and to their clients. All of the offices we spoke to draw on research and data from external providers alongside their own internal data analyses and keep careful records. Information from the likes of the Bloomberg Terminal provides valuable insight to investment trends and industry changes.
An interest in innovation, an openness to change and a keen awareness of Chile's economic strengths and relationships underpin the Huillinco Family Office’s approach to technology.
“We don’t have any investment interests in AI, but we are very focused on trying to understand how technologies are changing and affecting the industries we have interests in – insurance, real estate, automobiles, retail for home improvement, and banking – in order to implement new developments in the companies we own or invest in, to remain competitive in the future,” says Director Andrés Del Río.
The office uses Bloomberg for “everything,” along with a software system that can manage the idiosyncrasies of multiple currencies and investment types.
Chile has two currencies: its legal tender, the peso, and the Unidad de Fomento (UF); a non-circulating currency used to determine principal and interest in a range of situations, including domestic and international loans, private or special financing, purchases and investments on installments, contracts, par value of stock, and the capitalization of companies. The exchange rate between the peso and the UF is constantly adjusted for inflation so that the UF’s purchasing power remains stable.
“It’s important to have accountability in the UF, so we use fit-for-purpose software. This includes the US and is very important for the Chilean fixed income market. It is very important for family offices and for the Latin American market because our fixed income market has higher rates.”
The Saputo’s family office, Placements Italcan Inc, has decided to maintain separate accounting and investment software for the time being but anticipates evolving to a data interface in the future.
“We’ve realized that accounting and investment reporting are two totally different things, and that you need an interface between the two, so last year's project was looking for the right service provider – one that can aggregate all of the data that we have,” says CEO Patricia Saputo.
Having done her research, and with a background in tax accountancy and company management, Saputo has concluded that for now, separate systems – Masttro for its investment needs and reporting and QuickBooks for its accounting needs – amply meet the office’s needs. She plans to manually pass and share data between the two systems, but anticipates exploring a single system or interface to connect the two, down the road.
Saputo is cautious about AI but imagines Placements Italcan Inc will make more of the technology going forward as it is further developed.
“I think we're living in an age where it's inevitable and everything is moving in that direction. It's one of those things that if you're not keeping up, you're quickly going to feel like you're very far behind. It's a matter of understanding when it's useful and when it's not and using it in a way that protects and maintains the integrity of your proprietary information. You have to be careful and conscientious to ensure it works for you, and not against you.”
Two key technology platforms underpin the operation of the Vermeer Family Office, which is embedded in the Vermeer Corporation.
The Vermeer Family Office was established in 2014, and is embedded in the Vermeer Corporation, of which many second and third-generation family members are shareholders. The family office is subject to the corporation’s IT, governance and regulatory structures, but makes use of two platforms designed specifically for family offices.
The first is an encrypted platform that it uses for managing documentation related to committee meetings and taxation, and the second is a real-time equity management platform.
“The encrypted platform we utilize for our committee meetings is a wonderful place to upload all our documents. Knowing that it is encrypted is very helpful. It’s also been a wonderful thing for our tax advisors, as it has a private vault feature. We upload income tax forms to family members there, so they don't have to send those out. It’s a great time saver for them,” says Senior Family Office Manager, Aaron Smith.
"And then, the equity management platform essentially gives a real time view of each shareholder’s holdings. This helps facilitate our gift transfer regime to family, as most of the family take advantage of the annual exclusion gifting. And then also their individual trust structures.”
Accessing the latest and best in technology and news is business as usual at the Vesta Family Office and Vesta Wealth Partners, says President and CEO Max Fortmuller.
From a business perspective, Vesta Wealth Partners uses a variety of technology solutions, including a Bloomberg Terminal subscription, to understand the risks of its public and private market portfolios, conduct attribution analysis, and perform scenario stress tests, which provides instant access to risk metrics and market data.
Vesta Family Office is beginning to explore AI as a tool. Its CIO has recently started working with a new product that integrates generative AI and proprietary platform capabilities to aid private markets investment data, analysis and decision making.
It undertook an extensive process to select accounting, investment and fund management tools, as well as the strategic use of third parties for specialized activities such as fund administration.
“From a family office perspective, it is important to stay informed of what is going on in the industry, and keeping up with the current best practices,” says Fortmuller.
Information is organized digitally and stored within several secure software packages at the Maldonado’s family office, Grupo Económico Maldonado (GEM, or Maldonado Economic Group, or GEM).
The cloud aids record keeping with automation and broadening access to enable the family to query its historical decision making when it wants insight into the why of a particular investment, or to be able to track its growth.
“We have organized our information into filing systems and applications, that will guarantee that you're compliant and up to date with all the information you need for each asset that you own.
“There are software solutions out there that can really help a family office manager tremendously,” says third-generation family member and Family Council Chair, Alexander Degwitz.
“If we want to remind ourselves why we decided to invest $100,000 in a company in Venezuela in 2019, an authorized person can download the documents, and see who decided what. This kind of oversight tool is important to increase accountability. In an environment where there are business interests as well as investment portfolios to manage, one of the family office’s fundamental roles is to be the gatekeeper of information and to apply best practices for the information to be available and used as well as possible.”
GEM is now undergoing a major revision of its systems and governance structure to ensure it is fit for its purpose for the coming decade.