Choosing where to locate your family office and making the most of its offerings
Choosing where to locate your family office and making the most of its offerings.
Migration in search of opportunity from old to new worlds features strongly in the origin story of the wealth of several of the families we spoke to. Proximity to family and business interests, regulation, taxation, access to a professional network, and ease of recruiting are all considerations when deciding where to establish a family office. The five family offices we interviewed were able to share insights into Chile, Canada, the United States and Venezuela. In recent years, Calgary in Canada and Miami in the United States have emerged as family office hubs.
Networking with other family offices at home then travelling globally to strategically connect with others is proving effective for Max Fortmuller of the Vesta Family Office.
The Fortmuller’s Vesta Family Office is in Calgary, Canada. There are several family offices there and plenty of networking opportunities.
Fortmuller is part of several organizations, volunteers a lot of time to Family Enterprise Canada and the Family Business Network, and regularly attends family office conferences to maintain a continual growth mindset. He is also a member of a Next-Gen Business Group in Calgary that is made up of “second gens” dealing with taking over the family business.
“There are advantages and disadvantages to being in Canada,” says Fortmuller, whose family wealth has its origins in late 19th century Germany.
“Canada is a young country compared to Germany, the UK, or even the United States. Alberta specifically is a young province, having only become a province of Canada in 1905. We don't know what we don't know but, given my family background and the fact that I was born in Germany, speak German, and don't mind traveling, I can leverage other people's experiences in other parts of the globe.”
Fortmuller recently attended a Family Office conference in the UK, and was able to have valuable conversations with second, third, fourth, fifth, and even sixth generation members of high-net-worth families.
“In the family office world, leadership can be very lonely place. But there are professional networks and family office communities out there, and exposing yourself to them and realizing that you're not alone is a huge leg up,” reflects Fortmuller.
“One piece of advice I can offer is to start engaging and being part of Family Office organizations, like Family Enterprise Canada or FBN-The Family Business Network. These groups enable members to learn from each other. This includes learning best practices in the industry, which empowers all of us to grow. Learning from experience, and better yet, learning from other peoples’ experiences and not making the same mistakes is the best form of learning that there is. There are many reciprocal benefits in this process, one of them being developing a growth mindset, which can do wonders for the culture of an entire family office.”
Director of Huillinco Family Office and Vice President of the Chilean Association of Family Businesses, Andrés Del Río, estimates that there are around 200 family offices with AUM exceeding USD$5 million in Chile.
Like the Del Río’s family office, most of them are based in Santiago. "Here in Chile, we are a very centralized country. Everything happens in Santiago. We are trying to encourage family businesses outside the capital, through the work done by the Chilean Association of Family Businesses.”
Another way the family promotes business activity outside Santiago is through their foundation, Fundación Emprépolis, which focuses on creating opportunities for educational advancement and entrepreneurship in the fourth northern region of Chile, Coquimbo.
The office seeks investment opportunities in the United States and Spain, and strategically invests in Chile to support the economy and the country’s growth and development. However, Del Río reflects that it is becoming increasingly difficult to invest in his country due to economic deterioration and the legal and tax reforms affecting Chile's stability. As in many other countries, the current financial tightening Chile is experiencing can be attributed in part to external factors, including the impact of the COVID-19 pandemic.
The Maldonado family migrated to Miami, Florida from Venezuela in 2013, after carefully researching where it wanted to base its office and business.
“We decided to exit Venezuela because it was becoming increasingly hostile for the private sector. In 1998, we realized that, as a family that had gone through two generational successions and some liquidity events, we were essentially without a home country. We decided that we were going to make our home base in the south of Florida,” says third-generation family member and Family Council Chair for Grupo Económico Maldonado (GEM, or Maldonado Economic Group), Alexander Degwitz.
To achieve its goal, the family engaged one of Latin America’s leading private equity, mergers and acquisitions and advisory firms.
“They analyzed the status of our assets, and all of us; we did surveys, we tried to be all encompassing, about the needs of all our multigenerational beneficiaries. We then realized that in order to implement the consultants’ findings, we needed a structure that would enable us to organize our assets and give us some executing capacity.”
“Miami has historically been a second home for our family members, so it was a very soft landing. But more importantly, it’s the capital of Latin America. Additionally, in the last four years we’ve seen a massive influx of American wealth coming to Miami. It has become a point of congregation for Canada, the US, Mexico and all of South America. There is huge opportunity here.”
Family wealth creator Francesco Saputo set out for the United States from Sicily in the 1950s. The family landed in Montreal – and that’s where the Saputo’s family office, Placements Italcan Inc, is headquartered today.
“When my grandfather and my father, being the eldest son of eight children (seven at that time), were in Sicily after World War II, it was easier for them to come to Canada via Ontario to get to the States because the US was shutting the borders to new Italian immigrants. But they never made the trek to the US; they instead found opportunity in Quebec,” says third-generation family member and CEO, Patricia Saputo.
The way public philanthropy is structured in Canada appeals to the Saputo family, who prefer to fly under the radar in the realm of giving, and to give in an informal and individual capacity, rather than a formalized family one.
“In Canada our public foundations are more private than the private foundations because private foundations must divulge information about their financial activities, and it's publicly available. Whereas a public foundation doesn’t have to divulge what individual donors have given, as they do it as a whole.”
The Saputo family may explore a more formalized approach to philanthropy for Placements Italcan Inc in the future.
Like the family business it is incorporated into, the Vermeer Family Office is based in Pella, Iowa, in the midwestern United States.
The Vermeer Corporation and Family Office’s location are tied up in the origin story of the family’s wealth. Vermeer, which designs, manufactures and supports high-quality industrial and agricultural equipment, began life in 1948, as wealth creator Gary Vermeer’s one-man job shop on a farm in central Iowa.
Today the company has over 4,000 employees – most located in Pella but also in: Freeman, South Dakota; Griswold, Iowa; Piedmont, South Carolina; Okahumpka, Florida; Goes, Netherlands; Singapore; Valinhos, Brazil; and China.
Gary Vermeer’s home still stands just east of the Vermeer campus in Pella, a 40-minute drive from the Iowa state capital of Des Moines and is listed on the National Register of Historic Places.
Non-family member and Senior Family Office Manager Aaron Smith says that the family – now in its fourth generation and with 80 members – is gradually moving away from Iowa, and that the family office doesn’t necessarily have to remain in Iowa to flourish. Only about half of the family is living in an immediate 40-mile radius around Pella, Iowa, today – just 30 years ago, that figure was close to 100 percent.