CAMPDEN FAMILY CONNECT DIGEST - October 2021
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Membership | Events | Research | Education | IPI
CAMPDEN
FAMILY
CONNECT
DIGEST
October 2021
Expert for the Month: First Global
01
Going Global to Maximize
Family Potential
03
Devansh Jain of INOX Group on
powering family business and
renewable energy growth
05
Beyond Business: Salil Musale,
Classic Stripes & Astarc Ventures
16
Membership | Events | Research | Education | IPI
Index
◆ Expert for the Month: First Global 01
◆ Global Family Features
- Going Global to MaximizeFamily Potential 03
- Devansh Jain of Inox Group on Powering Family Business & Renewable Energy Growth 05
- Marc Puig Guasch On Family Business Growth, Succession & The Legacy of His
08
Father Mariano Puig Planas
- The Impact on Philanthropy & Charities When Ultra-Wealthy Divorce 12
- Managing Wealth as a Business : A Family Office-To Be or Not To Be? 14
◆ Beyond Business : Salil Musale, Classic Stripes & Astarc Ventures 16
◆ Campden Global Webinars & Forums: September 2021
- Virtual Member Meet 17
- Family Enterprise Seminar : Driving Growth Post Covid 17
- Cyber Security Seminar : Cyber Extortion & Ransomware 18
- Member Needs & Leads 18
- China in the Eye of the Storm 19
- MedTech Investing Europe Conference 19
- Women of Wealth Ivory Snow Series 20
◆ Campden Global Webinars & Forums: : October 2021 21
Membership | Events | Research | Education | IPI
ANNOUNCING
Indian Family Of fice Forum
24-25 November, 2021 (Virtual)
Key Discussions:
Family office boom in India
Evaluating & managing digital assets
Expanding your horizons beyond your home country
Impact Investment: Small beginnings leading to vast developments
Main Partner Professional Partners
REGISTER NOW
info@campdenfamilyconnect.com
01
02
Going Global to Maximize
Family Potential
If there are two trends that feature prominently in most family office
discussions today, I would bet that one of them is global
diversification (the other may well be alternative investments). It
would not be wrong to say that High Net Worth families the world
over have a much more global outlook today, and mainstream
investments are not the only things on their minds.
In India, the closest data point to support the trend is the steady rise
in outward remittances made by Indian residents under the
Liberalised Remittance Limit (LRS). In FY 2020-21, the outward LRS
remittance by resident Indians stood at $12.7 Bn, from just $1.3 Bn in
FY2014-2015! (Source: RBI)
While only ~10% of this $12.7 Bn was routed to global deposits,
equity, debt and real estate investments in FY 20-21, a significant
portion was spent on maintenance of close family members overseas
(21%) and for global travel (25%). Foreign education got the largest
share of 30%.
Shilpa Menon And this seems intuitive. The next generation of HNI families is
Senior LCR Capital Partner becoming more global, with many young members of the family
pursuing foreign degrees and choosing to live abroad. And yet,
when it comes to making investments, a significant number of
families continue to focus on the domestic markets, resulting in a
Based in Mumbai, Shilpa is responsible for home bias of over 98% in their portfolios.
LCR’s growth in India, including expanding The question to ask then is, given the global aspirations and
and managing LCR’s channel partnerships requirements of your family, would a purely domestic investment
and deepening LCR’s engagement with strategy suffice? What about hedging the risk of INR depreciation
against the dollar? Over the past two decades, the Indian rupee has
existing clients and prospects in the region. depreciated annually by about 2.3% against the US dollar and 3.9%
Shilpa has around 12 years of industry against the Euro. What about access to ideas that are not yet
experience across wealth management, available in the domestic market? Or about reducing the overall risk
investment banking, financial writing and in your portfolio by allocating to “safer” capital markets in the
content marketing. developed world? And are there strategic investments that can
deliver a global lifestyle, provide access to better education or
healthcare and open doors to new career opportunities for the next
gen?
Depending on the need they are looking to address, families can
categorize their global investments in three main buckets:
1. Investments that build assets in a foreign currency: These cover
mainstream investments made from a pure asset allocation
perspective. The focus here is to hedge against rupee depreciation
and domestic economic uncertainty, while reaping the benefits of
portfolio diversification. It is crucial to work with an advisor who a)
has presence (preferably regulated) and expertise in the offshore
market b) fully understands your requirements and risk profile and,
c) is 100% aligned to your interest at all times
2. Investments with Residency or Citizenship benefits: These include
a wide range of Immigrant investor programs, e.g: programs like the
US EB5 program or the Portugal Golden Visa Program, that can help
gain permanent living, working and studying rights in a foreign
country. These investments are made with the objective of fulfilling
the family’s lifestyle goals such as better education and career
prospects for children, access to better healthcare, personal security,
asset protection and global mobility. These are fairly involved, life
changing decisions. It is extremely important to fully understand the
implications, in terms of lifestyle, assets and taxation before you
commit to the process
03
3. Access to new ideas: The focus here is on emerging ideas that are not yet available in your home market. Families often
scout for investments in the alternative or private market space here. Working with a partner with strong sourcing and
manager/investment selection abilities in the foreign market is key
As American philosopher and naturalist Henry David Thoreau famously put it, “Wealth is the ability to fully experience
life”. All families want to achieve their full potential and global investments can very well be a path to a richer future that
goes beyond financial return.
About LCR Capital Partners
LCR Capital Partners is a private investment and advisory services firm that serves families interested in global
opportunities. Founded in 2012, the firm’s primary focus is working with clients interested in immigrant investor programs.
LCR has helped over 850 clients move to the United States using the EB-5 Immigrant Investor Visa. LCR also works with the
E-2 Investor Visa, the Portuguese Golden Visa, and Grenada’s Citizenship by Investment program. The firm offers additional
services to help foreign nationals moving to the United States through two a¬ffiliated companies: International Investors
Mortgage LLC and LCR Wealth Management LLC. Over the past 5 years, LCR has built long-term, trust-based relationships
with a global client base of high-net-worth families in over 30 countries around the world. LCR is headquartered in Westport,
CT, and runs a global network with teams in Miami, San Francisco, São Paulo, Dubai, Singapore, and Mumbai.
To know more about how your family can go Global, please feel free to reach out to me at smenon@lcrcapital.com
04
Devansh Jain of Inox Group on
Powering Family Business &
Renewable Energy Growth
Jain (pictured), 34, is the third-generation founder and executive
director of Inox Wind Ltd, the wind turbine arm of the Jain family’s
$4 billion Inox Group. Since 2009, Inox Wind has grown into one of
the largest and most valued renewable energy companies in the
world.
Inox Group is one of India’s largest and most successful business
conglomerates, holding interests in chemicals, industrial gases,
engineering plastics, cryogenic engineering, entertainment and
renewable energy. The group employs more than 20,000 people at
more than 200 business units across India and overseas and has a
distribution network that is spread across more than 60 countries
around the globe.
Before he chairs the upcoming virtual forum held by Campden
Family Connect, Devansh Jain told CampdenFB how he absorbed
the family business as a youth at the dinner table, what inspired him
to venture into manufacturing wind turbines and why ESG
investing has not just become a buzzword, “but is the need of the
Devansh Jain hour.”
Founder & Executive Director What are the key messages you want to send to families as
chairman of the virtual Campden Family Connect Indian Family
of Inox Wind. Office Forum on 24-25 November, 2021?
Devansh Jain, the next generation Family offices, particularly from an Indian perspective, are gaining
increasing importance given that this is no longer just about
entrepreneur of the Inox Group family
preserving wealth, but increasingly about growing wealth for future
business in India, says family enterprises generations.
have proven themselves quick to adapt and
Given the recent pandemic and the challenges everyone has faced, it
lead in the Covid-19 crisis and will play an
is commendable to mention that family-managed businesses have
increasingly important role in co-investing in been quick to adapt to changes and provide requisite leadership to
emerging asset classes. emerge out of this unprecedented situation.
Various global studies show family run businesses have
outperformed non-family-owned companies by a significant margin
in this period. In today’s increasingly digitised and globalised
world, family offices will be playing an increasingly important role
in co-investing in new emerging asset classes in India such as digital
ventures, startup funding, late-stage venture capital funding,
amongst others. The ability of financing through family offices could
play an exponential role in fostering entrepreneurship, risk taking
and idea generation from an Indian context.
What inspired you to launch Inox Wind and what was your
family’s reaction?
Right from my early days as a young boy, I recall that we have
always discussed business, be it at the dinner table or going to office
with my father and grandfather. Given we ran one of the largest
Clean Development Mechanism (CDM) projects in one of our group
companies, climate change was a subject which became extremely
close to me and I wanted to do something which would have an
impact in helping achieve our climate goals.
This was the reason, I wanted to do something connected with
climate change, and renewables turned out to be the perfect fit for
that. This also meant that while there was an identified area for
investment, it required a detailed business plan with proper advice
and detailed business case studies; so as to be able to implement a
project around this.
We worked closely with McKinsey to work out an execution model
and a business plan and then ventured into manufacturing wind
05turbines with an initial corpus of Rs. 10 crores invested by the family to launch Inox Wind.
Given I was all of 23 years when I wanted to do this, the initial reactions from the family were to stick to getting involved with
one of the family businesses and avoid going through the pains of building a new business from scratch. Moreover, some of
India’s largest corporates had failed to succeed in this segment, even though there was tremendous interest from global
investors in building wind farms in India.
I was fortunate that my father agreed to let me try and build out my own business. While for me there was no question of
failure, fortunately it played out well and we have been successful at building one of India’s largest wind turbine companies.
What is your growth strategy at Inox Wind and how do you intend to finance it?
We grew Inox Wind exponentially from all of zero revenues to about Rs. 4500 crores in a span of five years and we were
booming. Albeit in 2017, there was a very abrupt stop to this growth given the transition from the feed in tariff regime to the
auction regime was not grandfathered in India which led to a lot of pain in the sector, eventually leading to the collapse of
many wind turbine manufacturers.
We managed to survive only because we are one of the lowest cost producers of wind turbines globally and we are pretty lean
with regards to our debt. The sector has now bounced back and we are once again looking at exponential growth in the years
to come. The profitability of the business coupled with leveraging our equity should hold us in good stead in enabling us to
ramp up significantly in the coming quarters.
Families are increasing their investments in sustainability— 70% of respondents in the new Investing for Global Impact: A
Power for Good 2021 research report by Campden Wealth see the transition to a global net zero emissions economy as “the
greatest commercial opportunity of our age”. What is your advice on the risks and rewards?
Globally, ESG has not just become buzzword, but is the need of the hour. The recent Intergovernmental Panel on Climate
Change report was arguably the hardest hitting wakeup call for individuals, governments, industries to do their bit ASAP to
save our future generations and make the world a liveable place.
This is now not a question of risk or rewards, but is becoming an increasingly important aspect, with global investors and
customers looking at ESG compliance and giving premium to companies who are carbon neutral.
In the years to come, I believe the buzzword will shift from carbon neutral to carbon negative. So, it’s increasingly important
that all the family businesses adapt to this reality be it in terms of sourcing renewable energy and green raw materials; or
building green supply chains amongst various other such initiatives. These could lead to a significant re-rating of companies
by investors for early movers given that in due course of time people will anyways need to make this an inherent part of their
organisations. Clearly, it’s not a question of risk because laggards will be significantly beaten down by global funds and
investors as well as customers.
06Which have been your toughest business decisions during the Covid-19 pandemic and what are your expectations for the
recovery?
Of the two toughest decisions during this pandemic, one was deducting salaries, which we chose not to do. While we had a
tough time in the wind sector in the past 3-4 years, given the transition pain, but keeping in mind the long-term growth of
the sector and the aspirations of the team, we decided to bear the brunt of not cutting salaries.
The other tough decision we decided on was to take an enabling resolution to dilute equity to some extent so as to be able to
handle the situation as the need may be, given that there was no visibility of cash flows under the lockdown scenario.
Post Covid lockdown-1, we have seen a significant recovery across various sectors and even though Covid lockdown-2 had
a significant impact on many industries again, we truly believe that business should be back to pre-Covid levels in the near
future.
One significant change underlying this recovery is that stronger corporates and larger companies are increasingly becoming
stronger by gaining market share, given their access to capital and their ability to withstand short term pains.
Which family values do you abide by in your ventures?
I think there are three family values which come to my mind in all our ventures—firstly resilience, secondly perseverance
and thirdly staying away from debt.
I think being dogged about goals in the face of adversity and failures is extremely important for long term success. And as
difficult as it may sound, perseverance is key to overcoming challenges as well as achieving long term objectives
The third important family value which we follow is to stay away from debt. I firmly believe this holds companies in good
stead and can enable long-term growth without the challenges of short-term cycles. It ensures that you are always the last
man standing in your industry despite any downturn.
You have won awards for your leadership; what qualities does a robust family business leader need in the 21st century?
The most important qualities required are resilience, perseverance, being optimistic and being nimble footed given the
significant changes occurring globally. Being resilient is to be able to cope adaptively and bounce back after changes,
challenges, setbacks, disappointments and failures.
Being optimistic and nimble footed is equally important to have a positive mind-set which motivate people to achieve goals.
Passion and empathy are things which are equally important to build successful business leaders.
How will you manage the risks some business families anticipate this year and next, namely rising inflation and interest
rates?
Inflation is something which all businesses need to deal with in today’s global scenario. The way we are dealing with it is
looking at costs very closely, relooking at supply chains very closely domestically as well as globally and also increasing the
product prices to ensure bottom lines are protected to the greatest extent possible.
On the interest rates front, from our perspective, I think the best solution we are looking at is probably making ourselves
virtually net debt free so that we do not deal with any potential interest cost increases as we move forward. And we are
working towards that both from achieving operational profitability as well as raising adequate equity. I think this is
something which all businesses should look at closely to kind of deal with both these impending realities.
How were you engaged by your family to join the family Inox Group business?
From the earliest days as I have mentioned earlier, I have always wanted to be a part of the business. We are a business family
and have always discussed business at dinner and all my conversations with my father are around business. So, it was not a
question of them wanting to engage, but a question of me wanting to get engaged in the business at the earliest. In fact,
instead of a typical four-year degree, I did a dual degree in three years. I was always in a hurry to get back and do something
on my own on the business side.
My initial days of engagement involved working closely, following and trailing the senior management of various group
companies as well as my father, so that I could understand the nitty-gritties and the realities of dealing with people,
situations and scenarios.
Where do you see yourself in the succession plan of Inox Group?
Our role as owners or promoters of the Inox Group is to build strong management teams and oversee governance as well as
strategic actions so that strong professional teams can run the operations of these companies on a day-to-day basis.
I think, having spent the past 14 years in various businesses and building Inox Wind from scratch, I have been groomed to a
significant extent to oversee various companies in the group as well as embark on new ventures of which we have already
started working on some.
07Marc Puig Guasch On Family
Business Growth, Succession &
The Legacy of His Father Mariano
Puig Planas
The chief executive and president of Puig went on to tell
CampdenFB why the family is determined to retain control and
grow the enterprise but discourage its fourth generation from
management.
Puig was founded by Marc’s grandfather Antonio Puig in 1914 and
expanded globally by his father and former president, Mariano Puig
Planas.
The Puig family business announced the passing of Mariano Puig
Planas in April 2021. The 93-year-old is survived by wife María
Guasch, four sons and one daughter.
Born in Barcelona in 1927, the chemical engineering and IESE
Business School graduate forged enduring business relations with
the United States, the Caribbean and France. He sealed
collaboration, distribution and representation deals with Max
Factor, Paco Rabanne and Agua Lavanda Puig among other brands.
Marc Puig Guasch He spearheaded both Puig’s international expansionism and the
Chief Executive & President of family business community as a founding member of the Family
Business Institute in Spain. He served as president in 1995-97.
the Puig Family Business.
In 2020, Puig recorded sales of €1.5 billion ($1.8 billion) from selling
Marc Puig Guasch, third-generation principal products in 150 countries and operating 26 subsidiaries. The
company restructured its portfolio into three divisions—Beauty and
of the global $1.8 billion Spanish Fashion, new majority acquisition Charlotte Tilbury and
family-owned fashion and fragrance Derma—from January this year. Puig declared its ambition to reach
business Puig, hails his father as a “titan €3 billion ($3.5 billion) in sales in 2023.
with a human touch” who led by listening CampdenFB asked Marc Puig how his father has shaped his own
and brought out the best in people. approach to family business, how he plans to double growth and
about his attitudes to engaging the next generation, technological
disruption and sustainability.
What is the legacy of Mariano Puig Planas?
My father was a titan. He really was a pillar of what Puig has
become. Even if he left the day-to-day management and the
governing bodies, because my father together with his brothers
decided to put end dates on their involvement in the company.
My father left the Puig business in 1998, he left some of the
responsibilities of governing bodies in 2003 then by 2008, he was just
a shareholder attending shareholder meetings. It’s been 18 years
since he was involved in the business. Nevertheless, he made his
stamp, without interfering with the business. He used to talk to
people, he used to listen, and he had this human touch which
permeated everywhere in the organisation. He led by asking
questions, that’s something that I think he left in his legacy.
I would also say his drive. I can tell you an anecdote he used to tell
me, one of many in our Puig, 100 Years of a Family Business
anniversary book. When Spain was still under Franco’s regime and
the country had blocked borders, there was a brand that was famous
at that time in the 1950s, Max Factor. The brand used to arrive in
Spain through Africa, probably from smuggling.
He wrote to the Max Factor people in Los Angeles saying: “I really
like your brand. Your brand is being sold in Spain, but illegally
somehow. I would like to manage your brand. I’m going to take a
flight to Los Angeles and would like to meet you.”
08They sent him back a telex saying: “Mr Puig, thank you for thinking about us, but we are happy with the situation and we
don’t want to change.”
He let them realise he had not received the telex and wrote again: “I’m on my way to New York then I will come to see you
in LA.”
They wrote to him at his New York Hotel: “No, Mr Puig, we are fine. No thank you.”
Next telex: “I’m on my way to LA, I will be landing at this time and hope to meet you.”
Finally, he arrived there with my mother. They saw this young elegant couple who were simpatico, and they finally gave
them the licence. Flying to LA from Spain at that time was impressive. When he wanted something, he would just go for it
and it’s a typical example of my father in that case.
What are the guiding principles and values in family business that you learned from him and apply in your work?
He really led the business through his teams and he used to lead by questioning. He would listen more than talk. He always
said, whoever asks the questions, gets to lead, and that’s something he was very good at. By the way people responded to him
or by the things that people didn’t tell him, he found out more about those people that they even thought about.
There’s a sense of fairness in the way he dealt with people that’s also a part of our company. We don't lead by fear within, we
try to help people do the best, to places they don’t think they can go by giving them ambition and pride in what they can
accomplish. It’s a culture of reward, not fear that I see other companies have.
How has the family and family business coped with his passing?
He had long been away from the day-to-day management and had many other activities besides, like colleges and museums,
so there’s less impact from the business point of view.
From a personal point of view, it was a big impact for the family, although he was not a young man anymore.
He always said to us: “I know I have the Sword of Damocles hanging over me, but I am so happy. I enjoy myself so much that
as long as my body allows me, I’m going to keep travelling and doing things.”
He did that until the last minute. Except for the last six or nine months, he was in good shape and high spirits with a very
clear and sharp mind, with an ability to really dig into what was important rather than superficial. It was tough for my family,
particularly for my mother.
Have there been approaches from outside parties, such as private equity firms, to acquire a stake in Puig? What would be
your reaction to such approaches?
09No, we haven’t, and I guess because we have been open about the fact that we wanted to continue this project on our own.
We have made some moves in the last few years that prove the company is healthy, is a cash generator and can grow
inorganically when it is necessary. From a business point of view, we don’t see the need to change our structure.
The question would be when we think about what’s best for the next generation, but in my generation there’s no need to
consider different approaches.
What advice would you give to family businesses which operate with both family and non-family governance?
We say a family functions with love as the main driver. Our family companies require hierarchy and meritocracy. Sometimes
when two systems combine, there are clashes. What we have done to solve, or help solve, this dilemma is basically what we
call self-disempowerment. For instance, in the operating boards we have more non-family members than family members.
In the compensating and nominating committees, we have all non-family members who make recommendations for the
boards to decide. We make those decisions objective so that leadership is not a subjective matter.
Non-family members in certain governing bodies can be very helpful, particularly in issues that have to do with leadership
and hierarchy in family roles.
As businesses grow, the chances that you have the best leadership within a family are lowered, so non-family members at
the board level and in certain governing bodies can help you assess whether you are well-equipped or not and can also help
you have high calibre people in certain roles where decisions are very critical.
Where does the Puig family fit in the governance of the business?
We have the family level because we have a holding company above operating companies. In that holding company we have
branch representation and then non-family advisory board. We have the family Puig Foundation and the family council.
Below the holding company, we have operating boards and in these boards there are always more non-family members than
family members, by definition. The decisions to buy and sell, leverage at a certain amount or beyond a certain amount are
made at the holding company but otherwise the operating companies are very autonomous.
Is the fourth generation being prepared to join the family business?
We have told the fourth generation that they will not work in the company. They will eventually participate in governing
bodies, but they will not be part of the management team, unless they go through several difficult filters; that the board, the
holding company, the family council and shareholders approve. We’ve made it very difficult because we went through a
period in my generation when the processing of choosing the leadership went through choppy waters. We felt that when a
company reaches a certain size it is healthier to think of family members participating in the governing bodies than in the
management teams.
How did you come to join the family business?
Although I worked for a while for another company, I had no doubt my family wanted me to work at our company and that’s
how they raised me. I prepared myself to do that. Now we have told the next generation, for some time now, they must find
their own path. We tell them be happy with whatever you do, just make sure you learn the minimum about business, so you
can read an annual report and in case you want the possibility of joining some of the governing bodies. It’s a different
scenario.
What have been your toughest decisions as a family business during the Covid-19 pandemic?
When we started the Covid period, we had excess cash and a healthy balance sheet. Then Covid came and it did have a
significant impact on our industry. We knew during 2020 we would be losing money for the first time in many years and it
would take time to recover from the pandemic.
Despite that, we made the largest acquisition in our history. In June 2020, we realised the acquisition of Charlotte Tilbury,
which is a British company, and we had to go from excess cash to a high in-debt position. We felt it was a very good
opportunity to really position ourselves for the future, but we didn’t know whether it was a future in a year or three years or
five years, or whether we’d be able to survive well that period.
Questions came from the family: “Why do we have to do this now? We have a healthy balance sheet, why do we take debt
now? How is this going to affect our own business?” There were a lot of uncertainties and no one had the answers, but we
decided to make the acquisition, so that was a tough decision, along with many others.
What made you want to complete the acquisition despite the uncertainties?
Because we had a solid business prior to Covid, but it was not exposed to the big growing waves in our industry, which are
digital transformation and the China revolution. By this acquisition as well as another we did in December 2020, we are now
well exposed to these trends. To project growth, you have to make it happen and compared to our 2020, our plan is to double
in three years and triple in five. It’s only six months of sales from Charlotte Tilbury but we have the right portfolio to benefit
from these growth waves.
What do you look for when making acquisitions?
If we buy, and we done this on many occasions, a minority or majority stake in a company that includes the founders, which
is often the case, we would want to make sure we have similar values as the founders.
10We have bought majority stakes in companies in the past, like Carolina Herrera, Dries Van Noten, Jean Paul Gaultier, Paco
Rabanne and now Charlotte Tilbury. Eventually we’ll but 100% but in order to do that, we have to feel comfortable that we
will be able to overcome the challenges that in business you will always have with a founder. You must have similar ways
of thinking and values.
We also ask, is there the capacity to create value to justify the price paid?
What are Puig’s strategies to navigate and benefit from technological disruption?
We created Puig Future, which is a platform where we look for technology and advances and we have identified certain
opportunities from that. Now we have fragrance profiling, which is the ability to help people identify their fragrance liking
through the internet, which is very interesting and one of the most sophisticated in the industry.
Through the acquisition of Charlotte Tilbury, we have one of the most sophisticated make-up websites in the industry and
sales penetration in digital is very high. That’s a way for us to learn more about applying technology in our industry.
The penetration online is very different for makeup and skincare because they are visual categories compared to fragrance.
Anything that engages your human senses of eyes and ears goes very well through the web, but not so much products of
scents and tastes.
How do you incorporate sustainability into your everyday business practices and longer-term strategy?
At our centennial anniversary in 2014, we made the commitment to be a greener company, so we had ambitious plans which
ended in 2020. We made all our commitments, like zero-waste landfill, all our factories use green energy and our office was
awarded the Gold LEED energy-efficiency certification.
But in the last year, we have had a mandate from the family to say that in whatever business or industry we participate, we
want to be among the most respected in terms of ESG and at the forefront. We say we build highly desirable, unique fashion
and beauty brands in a family company that aims to leave a better world for the next generation.
There is a commitment because since we told our kids they will not work in the company, if we want them to be engaged,
excited and proud of the company they will be shareholders of, eventually, we know we have to be very empathetic with the
needs of the new generation. Our kids are clearly even more keen to make sure that as a company we do the best we can.
We have a new moving target, to be among the most respected, and that is what we’re going to do. What that means is what
the board must translate and that why we designed our 2030 ESG plan, which is very ambitious and will be soon online.
11The Impact on Philanthropy &
Charities When Ultra-Wealthy
Divorce
Charitable giving is increasingly becoming a keystone in
ultra-high net worth family estate planning. Therefore, in
considering how to unwind an estate plan on divorce, thought
must be given to how to disentangle the family’s charitable
activities.
How a philanthropic programme can be bisected such that each
party can pursue their own independent path depends significantly
on the form of that programme; at its most complex it involves a
close investigation of UK charity and trust law to determine the best
way to separate the two individuals.
Charity funds are public funds
In the first instance, a distinction must be drawn between funds on
the one hand that have been nominally earmarked by the couple to
be given to charity, and funds on the other that have already been
given to charity, perhaps to a charity controlled by the family. If
funds have been set aside under the expectation that they be applied
Aidan Grant for charitable purposes, but those funds still remain under the direct
control and ownership of the couple, then these assets can simply be
Senior Associate at Collyer divided in accordance with the general rules governing the division
of assets upon divorce. This remains the case unless and until those
Bristow assets have been specifically ringfenced for charitable purposes, for
example if they are held within a family trust.
Aidan Grant is a senior associate in the
trusts, tax and estate planning team of However, once assets have been donated to a charity, those assets
are no longer under the unilateral control of the couple. The assets of
Collyer Bristow. He joined the firm in 2016 a UK charity are in effect public funds held for public benefit. It is for
and advises resident non-domiciliaries, UK this reason that charities attract a wide range of tax reliefs. The quid
and international trustees and domestic pro quo is that, once donated to charity, a donor cannot demand the
clients on matters spanning pre-immigration funds back. A charity is only permitted to apply funds in pursuance
planning, residency and domicile rules, of its 'objects' (i.e. its purpose) and returning funds to a donor would
not satisfy this obligation.
international tax planning and UK wills and
estate planning. Continuing as co-trustees
It may be that the couple are both happy to continue as co-trustees of
the family charity for the time being, as for example Bill Gates and
Melinda French Gates have recently announced they intend to do for
the Bill & Melinda Gates Foundation. In such circumstances the
couple needs to be aware that trusteeship is a fiduciary role; charity
trustees are obliged to act in the best interests of the charity’s
beneficiaries, as defined by its objects. In continuing as charity
trustees, the couple must be able to work together in furtherance of
the charity’s purpose and, in doing so, they must put aside all
enmity and personal differences. This is particularly important if
one of the couple also performs another role for the charity, perhaps
as an employee. In such circumstances the other spouse must
continue to perform their role as a trustee with impartial oversight
over all charity matters, including employee governance.
With both parties remaining as trustees, thought should then be
given to whether there would be merit in adding new trustees. New
trustees often bring a fresh perspective to affairs, but equally the
trustees should be aware of the risk that the new trustees could be
exposed to conflicts of interest. For example, if the new trustees are
the adult children of the couple, they may be conflicted out of certain
decisions that pertain to their parents. For this reason, the
appropriate balance of family and independent trustees should
always be considered. If the couple already both act as trustees then
this should have already been considered, given that spouses are
12also a class of individuals in which potential conflicts of interest most commonly arise. It is also worth reviewing the person
with whom the power to add and remove trustees resides. This is commonly the existing trustees, but if for example that
power resides within the unilateral control of one spouse then this matter must be navigated carefully.
A clean break
Conversely, if the couple would prefer to part company on their future charitable affairs, then reallocating funds held within
an existing charity can be very difficult if the couple’s charitable goals differ. If, for example, the objects of the existing charity
are promoting animal welfare, that charity would be unable to transfer funds to another charity whose purpose is the
advancement of the arts.
The objects of the existing charity could in theory be amended and broadened, but this would likely require prior consent from
the Charity Commission, who might ask the reason why an animal welfare charity now wishes to support the arts. The Charity
Commission’s primary concern will be over the charity’s existing objects and, were they to grant permission for widening the
objects, whether this would be to the detriment of its stated purpose. In such circumstances, the Charity Commission often
refuses to permit such radical changes.
On the record
Finally, it is worth noting that the activities of a registered UK charity are matters of public record. Therefore, steps like the
retirement of a charity trustee eventually make their way into the public domain. Charity trustees are under a statutory duty
to notify the Charity Commission of such a change, although there is no specified time limit imposed on charities. As such,
divorcing trustees should expect that a trustee’s departure will eventually be known to the wider public. If the couple wish for
their private affairs to remain private, then this public disclosure should be managed appropriately.
Please note, if the charity is also a company then, notwithstanding the lack of a Charity Commission deadline, it is still bound
by the filing deadlines for companies. The directors (i.e. the trustees) must notify Companies House within 14 days of a person
ceasing to be a director, which shortens the timeframe within which the couple must plan for public disclosure.
As with most forms of financial restructuring, it is impossible to give blanket approval or denial to a proposed rearrangement
without seeing the detail of the restructuring. Meeting the couple’s wider collective goals can often be achieved, but when the
interests of charity are introduced then a third party has been added to the conversation, whose independent voice and
interests cannot be ignored.
13Managing Wealth as a Business :
A Family Office-To Be or Not
To Be?
Does it make sense to professionalise the management of my wealth
(or that of my family), treating it in a manner comparable to how I
treat my company or other businesses? In other words, should we
create a family office?
More and more business-owning families are asking this question as a
consequence of the problems and upheavals that affected family
companies after the crisis of 2008. The answer to this question is not as
simple as it appears. In my opinion, it requires an in-depth analysis of
the reality and circumstances of each case—especially if the intention is
to do things well with a realistic perspective on the medium-and
long-term to achievability of sustainable family wealth. If this is not the
intention, as the French painter, Francis Picabia, said: “It is better to do
nothing than anything.”
It is necessary to ask specific questions in advance, about the
requirements of the business-owning family—what are the objectives,
the areas to develop for the scope of action, localisation, and reserve
requirements? Other good questions include: What material and
human resources will be needed for the family office? How will it be
Inigo Susaeta financed? Will it be created alone or with the help of third parties?
Founder & Managing Partner of As we know, each family enterprise has its peculiarities and requires a
personalised approach. There are a variety of objectives for creating a
The Arcano Family Office family office: having a platform of services for the family, enhancing
family cohesion among generations, stimulating the entrepreneurial
in Madrid. spirit of the youngest members, or structuring the family protocol,
among many others.
Inigo Susaeta, CFBA, CFWA, is founder and
For these reasons, an important preliminary step is to clarify the
managing partner of the Arcano Family objectives for the family office, given that these objectives will
Office in Madrid. He has 30 years of determine its mission, which generally allows for the alignment of
professional experience in private banking family member interests as well as clarifying the functions that the
and wealth management. family office will perform. The most common function is to perform
services of an economic nature (wealth management), but there are
companies that manage their family office in a more integral and
strategic manner, including business planning, legal and fiscal
counselling, education and training of family members, and
philanthropic activity or social responsibility. In some cases, solutions
to conflicts or personal problems are included.
Nonetheless, the essential point on which family business
sustainability operates is the creation of a strategic family plan. I often
use the fact that a successful business owner, who wants the company
to grow, does not hesitate to make a strategic plan, as a way to suggest
that this also is the first step in preserving and creating wealth.
The strategic family plan, if done well, must be constructed from a
global, 360-degree perspective and inevitably lead to a diversified
investment portfolio (real estate, business, private equity, and
financial), which is to say global and strategic asset allocation. Let us
not forget that, while there are those that think differently, the decision
to invest is not a simple one. In the words of Stuart Lucas: “Wealth
without values is just money!”
Before investing, we must have a plan that truly distributes money
according to the interests, needs, and values of the family. There are no
two family offices that invest the same way for the mere fact that no
two families are alike. However, it is also an inarguable fact that all
family offices, just as all business-owning families, must have a
long-term objective and a plan to achieve it. In the words of Roman
philosopher, Lucius Annaeus Seneca, in the 4th century BC: “If a man
knows not what harbour he seeks, any wind is the right wind.”
A strategic family plan is nothing more than the task of defining the
14current state of the business-owning family, a task on which the medium-and long-term objectives are established and
constructing the process for achieving them. In every strategic family plan a strategic global portfolio for family investments
must be constructed. There are profitability objectives and risk metrics that allow monitoring and managing the investment plan,
making wealth work in accordance with the desires and interests of the family.
There is, however, another fundamental element for all of this to work: the team, and with it, the investments that are going to
be made in material and human resources to effectively and efficiently meet the needs of the family.
The alternatives that arise are basically: (a) have a structure or “family office” with the hiring of an exclusive management team
for the family, which will be responsible for managing the wealth like a distinct business unit; or, (b) replicate the structure of a
“multi family office” with a professional team, which will assume all the functions of the family office as its own; lastly, (c) create
a small structure, “mixed solution,” that may be sustained in a “multi family office.” A multi family office is a business that, by
employing a multidisciplinary team (specialists in taxes, law, investments, risk management, administration, and systems),
allows for the operation of the family office of different families with independence and a guarantee of proven experience.
The creation of a family office is a strategic decision that requires the establishment of clear objectives with a strategic plan that
reflects the reality of the family from all angles. Only with a firm commitment from all family members, who consider as
intangible values the alignment of interests, greater family trust, greater professionalisation, and an improvement of familial
relationships, will the desired result be obtained. As Benjamin Franklin once said: “Peace and harmony are the greatest wealth
of the family.”
In conclusion, I offer 10 questions that serve as a guide for those families that want to begin this process:
1. Where are we?
2. Where are we going?
3. With whom are we going (member of the family)?
4. What function/role does each family member perform?
5. What needs must be met?
6. What present and future wealth do we have?
7. How does this wealth need to operate in order to meet the needs of the family?
8. In what environment and situations will we manage the wealth?
9. How do we professionalize the management of this wealth?
10. How do we submit the wealth (including the business) to a process of risk management to allow for rational
strategicdecision making over time
15Salil
Musale
Managing Director,
Classic Stripes &
Astarc Ventures
BEYOND BUSINESS
Your favourite destination?
South Africa safaris and Italy
Your favourite read?
Many favourites. Recent one is "No Rules Rules:
The Netflix Way and The Culture Of Reinvention"
Your fitness mantra?
Morning gym
What is your best way to unwind after
a long day of work?
Nowadays spend time with my little daughter
The one quote you live by?
Keep yourself positive always and help others
Who is a person you look up to and Why?
My father because of what he has built and the
values and principles he has inculcated in me
What’s next on your bucket list?
Start meditation and Kriya every morning
16Campden Global Webinars
Membership | Events | Research | Education | IPI
Virtual Member Meet Family Enterprise Seminar :
September 3, 2021 Driving Growth Post Covid
Exclusively hosted for Members, this meet & greet September 13, 2021
session had participants share their experiences and To grow a more valuable company, avoid disruption,
learnings in equity investments via multiple and have successful generational transitions, a family
break-out rooms. enterprise needs to have four key strategies each
focused on: growth, capital, shareholder liquidity and
generational transition. This seminar captured the 7
drivers of family business growth which are key to
creating a strategy and developing understanding in
order to help families achieve their growth ambition
17& Forums: September 2021
Membership | Events | Research | Education | IPI
Cyber Security Seminar : Cyber Member Needs & Leads
Extortion & Ransomware September 16, 2021
September 15, 2021 Capped at 20 participants, this IPI member-led session
tapped into the business & investment insights and
As part of the 1st of four virtual Cyber Security
connections of fellow peers in a confidential setting.
workshops, hosted in partnership with
Management Analytics, this 1st session deep
dived into the important issue of cyber extortion
and ransomware and precautionary measures
that can be adopted
18Campden Global Webinars
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Membership | Events | Research | Education | IPI
China in the Eye of the Storm MedTech Investing Europe
September 17, 2021 Conference
In an exclusive webinar hosted in partnership September 21-22, 2021
with Julius Baer, Mark Matthews, Head of Riding on wave of innovation in healthcare, life sciences
Research- Asia, addressed how investors should and biotech in COVID-19 era, the 31st edition was held
read recent policy moves in China and its in-person in Switzerland and chaired by Dr. Benoit
probable implications on Indian economy and Dubuis. The conference addressed the biggest topics in
markets. the industry today, from investment topics such as
“Where is the money coming from?” and “What do
family offices look for and how do they invest?” to
wider challenges such as “How does healthcare
economics playout in the real world?” and “How do
you plan and execute a successful exit”.
19& Forums: September 2021
Women of Wealth Ivory Snow Series
September 28, 2021
Capped at 20 participants, The Women of Wealth
Network is an evolution in IPI’s Women in
Wealth series. There’ll still be the same high
quality, interesting, and relevant speakers, but
there’ll be a renewed focus on introductions and
mutual support.
20Campden Global Webinars & Forums: : October 2021
6
Oct
Family Enterprise Seminar (Virtual)
Institute of Private Investors
6-7
Oct
European Family Office & Investment Forum (in-person)
Campden Wealth
NextGen Webinar: Motivating NextGen for a life of
8
Oct
triumph (virtual)
Campden Family Connect
12-14
Family Investing With Impact &
Innovation Meeting (in-person)
Oct Institute of Private Investors
13-14 MedTech Investing Europe Conference (virtual)
Campden Wealth
Oct
20 Women of Wealth (virtual)
Institute of Private Investors
Oct
21
NextGen Series : Protecting Family Wealth &
Creating Your Own Legacy (virtual)
Oct Institute of Private Investors
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