Insights

Diversification

Families are diversifying their asset base geographically and into more sophisticated asset classes to ensure stability and longevity for their assets

Deloitte has been proudly serving tens of thousands of family-owned companies and family offices in all geographies including KSA, UAE, Bahrain, Kuwait, Oman and Qatar, for many years.

Outside their core business, families diversify their investments across asset classes and geographies. There is an increasing trend towards direct investments in real estate and operating businesses, and away from the fund model which was popular before the global financial crisis. Whilst control is easier, direct investment brings the need for careful planning, performance monitoring, and specialist execution of acquisitions.

 Key considerations for the family:
  • Does the family have a clearly defined investment strategy that meets their
    objectives?
  • Long-term asset protection usually needs to be balanced with the family’s cash flow requirements.
  • Is there appropriate oversight of consolidated exposure by geography and asset classes, and an ongoing risk assessment of individual investments?
  • Does the family actively monitor and manage debt and liquidity levels across the investment portfolio?
  • Are returns optimised by having appropriate expertise (either in-house or outsourced) to manage pricing and execution risk on acquisitions? Net returns will be impacted by local taxes which can change without notice. Does the investment team ensure that the asset holding structures are fit for purpose and tax-efficient? 
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