Family Offices are active and bargain hunting

Family offices are known for discreet investment behavior and cutting large investment checks. In this time of pandemic, most of them are very active and looking for great deals. For them, the present is the best time to find good deals and investment opportunities to fill the gaps caused by the coronavirus pandemic.

The only common theme among the smart money is that they are all interested in the technology sector. Earnings for the NASDAQ
index and the rapid turnaround from the highs to the lows of the S&P 500 and back again has been astounding. They have racked up some profits during the coronavirus stock market crash and rally, but for them, the bigger game is in the equity game. The money smart among family offices are intrigued by the current change in the work environment and see various opportunities.

Stocks like Zoom have more than doubled during the pandemic, and the smart money is looking to these kinds of platforms, which are addressing the real gaps. Some of the common investment themes among family offices are as follows:

  • Biotechnology
  • health care diagnosis
  • Supply chain

Biotech stocks, healthcare diagnostic stocks and companies involved in this space are all on family office shopping lists. Sir Anthony Ritossa, Ritossa Family Office, held its 11th Global Family Office Investment Summit in Monaco under the High Patronage of Prince Albert II of Monaco. Speaking about the event, Mr. Ritossa said: “Family Offices and private investors have a keen interest in biotech companies and stocks. Health technology companies represent a huge opportunity, and most of our attendees reported that they are actively looking to expand their investments in these sectors. These areas have been a major investment focus for several years, but the recent global health crisis has increased the focus on the pharmaceutical, biotech and healthcare sectors, especially on companies with promising new technological advances.”

Investors are concerned about supply chain disruption caused by the pandemic. They are aware that the supply chain in a post-Covid world is likely to change and look completely different. Smart money wants a piece of this action.

The pandemic has brought many challenges to supply chain core inventory and several companies have been driven out of business due to higher core inventory prices.

Higher prices have caused a liquidity squeeze and the smart money wants to help. “Fortunately, private investors and family offices are stepping up to support critical efforts to help, stabilize and expand. The rapidly changing agricultural technology (AgTech) sector is receiving renewed attention as companies look for new ways to improve food chain efficiency and reduce food waste,” added Ritossa.

Similarly, the investment focus among institutional investors is also looking for companies that can make the supply chain process more efficient. Lord Carmine Villani, Executive Board Member of Saudi Crown Holding and Managing Director of Multi-Family Offices Global Partners Limited, said: “We are looking for a company that packages Amazon
The packages in seconds, and all this is done through technology. This reduces Amazon’s package delivery time.” He said, “It’s technologies like that that we’re very interested in.”

Family offices are looking at several struggling businesses and have the liquidity to jump right in. For most of these family offices to invest, they must see a solid business model and a good team behind them. Carmine said, “They are primarily interested in investing in those companies that have been in business for a number of years and have been paying dividends to their shareholders.” He said: “We understand that companies are under stress in the current environment, and for these companies to adapt to the new environment and scale their businesses, they need capital; we are pleased to inject capital into the right opportunity.”

Investors always wonder how much wealth from a family office is deployed directly in the stock market and how much attention this smart money pays to the daily movements of the stock market. Markus Lehner, Director of the Markus Lehner Family Office, said: “These are exciting opportunities, but from a family office perspective, we want to support companies that are now capital-challenged. Their focus is capturing upcoming trends.”

Ritossa said: “There are a lot of stocks that have been on a roller coaster ride since the pandemic. Family offices are eager to support research initiatives.”

Finally, family offices are also interested in joint ventures. In fact, they are eagerly looking for great investment opportunities, but at the same time, they don’t want to take all the risk. For them, it is much better to have a partner who can share the risk and bring their experience and contacts, which can help the business grow.

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