Family Office

Some Single Family Offices Benefit From Turmoil - Data

Alastair Graham 31 March 2020

Some Single Family Offices Benefit From Turmoil - Data

The volatility caused by the pandemic has hurt a swathe of sectors and benefitted others, such as internet-based working tools, forms of medical services and food logistics. In Europe family offices are significant owners of such businesses - what has been the gain to their bottom line?

A few days ago we published findings from Highworth Research, the UK-based organisation tracking the affairs and data of single family offices, about how a number of prominent SFOs were being affected by COVID-19. 

In this article, Highworth’s founder, Alastair Graham, examines a number of specific European family offices. These are mini-“case studies” and we hope readers find this interesting. To find out more about the Highworth database, click here. 

Of course no single family office is likely to escape the adverse financial impact of the coronavirus crisis which, in particular, has severely affected those families with substantial investments in sectors such as airlines, hospitality, oil, and retail property. That said, the majority of single family offices, even in these hard-hit sectors, have well-balanced portfolios which will be impaired but not devastated. 

At a time of such investment gloom there are, however, some single family offices which, either through foresight or chance, are to varying degrees protected from the economic fall-out from COVID-19 and may benefit from the crisis. 

The Single Family Offices Database from Highworth Research and its partner WealthBriefing holds data on a number of SFOs which fit this category. Here are half a dozen examples:

Greybull Capital
Greybull is a “double single” family office for the Meyohas and Goldstein families and is unusual among family offices in its exclusive focus on distressed assets. Greybull’s track record over the 12 years since the firm’s founding has been mixed. Its successful exits have included Metalrax, and Plessey Semiconductors and its alleged failures have included Monarch Airlines and British Steel. That its investment strategy continues suggests that in aggregate the firm has the skillset and the nerve required to make money from distressed assets, for which many opportunities will sadly arise in 2020. 

Orascom TMT Investments S.à.r.l.
The family office of Luxembourg-based Naguib Sawiris might be said to have an unbalanced portfolio since about one third of the value is attributable to gold. Sawiris is continuing to build a portfolio of significant holdings in the gold mining sector which he regards as appropriate for an investor to hold “when there are crises around” or “for someone who wants to have a balanced portfolio” as he commented presciently in an interview in 2018 with CNBC. 

His vehicle for investment in gold is La Mancha Holding S.à.r.l., registered in Luxembourg, supported by an investment team in London, and with gold mine assets reported by the company in April 2019 as amounting to $1 billion in value. 

However, between 3 April 2019 and 30 March 2020 the gold price has risen by 33 per cent. Thus the value of Sawiris’ gold assets were $1.33 billion by the end of March 2020, and may be likely to rise further given the current demand for the yellow metal.

Mobilis Gestion, France
The family office of the several hundred members of the Mulliez family of Roubaix, France, owners among other assets of the French supermarket giant Auchan, with 2019 sales of €46 billion ($50.7 billion). Auchan is the 11th largest food retailer globally. In the midst of the COVID-19 crisis, food supermarkets are almost the only retailers to benefit.

dievini Hopp Biotech Holding
This is a family investment company for Dietmar Hopp, one of the five co-founders of German software multinational SAP. He has been investing patiently in biotech for the past 12 years, with his current portfolio comprising holdings in 11 companies. Among them is a company called CureVac.

CureVac is a clinical stage biopharmaceutical company founded in 2000 which develops mRNA-based drugs for vaccines and therapeutics.

Dievini participated in 2010 in a venture round which raised €27.6 million for the company; then in 2012 in a Series D fund-raising round which raised €80m, and a series F round in 2015 which raised €98.5 million. 

CureVac is one of the leading serious contenders in the race to develop a vaccine for COVID-19. Dievini Hopp is the major shareholder in CureVac, holding 80 per cent of the equity capital. 

Weybourne Ltd
The family office of Sir James Dyson has two ways of resisting impairment of assets from COVID-19. The first is through reliable and sustainable food production. There are few if any family offices in Europe with agricultural landholdings valued at over £0.5 billion. The Weybourne affiliate Beeswax Dyson Farming’s 2018 accounts show net assets of £527 million ($652.8 million), up from £461 million in 2017. Holding over 14,100 hectares of prime agricultural land in England, Sir James is committed to the asset class for the long term. 

As if the stability of this asset were not sufficient, Dyson is fast-tracking the development a portable ventilator, the CoVent, and received an order in March 2020 for 10,000 from the UK government.

Carl Bennet AB, Sweden
This is the family investment company of Swedish industrialist Carl Bennet.There are just six companies in the private equity portfolio of Carl Bennet AB. Of these, the longest held (since 1989), with the largest by sales revenue, and the most valuable, is Getinge AB. 

Getinge is a developer and manufacturer of sophisticated medical equipment for international hospital markets. But its present significance is that it controls 25 per cent of the global market for mechanical ventilators. 

As of March 2020, the company plans to increase production of its ventilators by 60 per cent in the coming months, manufacturing 16,000 units in 2020. The company’s share price has increased from SEK 106.5 ($10.6) in April 2019 to SEK 195.6 on 27 March 2020, a growth rate of 84 per cent. On 27 March 2020, the Getinge market cap was SEK 48.86 billion, valuing Carl Bennet’s 20 per cent stake at $982 million. 

Bennet has held the stock for 31 years, a true example of patient capital.

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