Family Offices Are Active And Hunting For Bargains
Family offices are known for their discrete investment behavior and for cutting large investment checks. In this pandemic time, most of them are highly active and looking to bag some great deals. For them, the present is the best time to find good deals and investment opportunities to fill in the gaps caused by the coronavirus pandemic.
The one common theme among smart money is that they are all interested in the technology sector. The gains for the NASDAQ NDAQ index and the quick turnaround of the S&P 500’s highs to lows and back again has been astonishing. They have banked some profits during the coronavirus stock market crash and rally, but for them, the bigger game is in the equity play. Smart money among family offices is intrigued by the current work environment shift, and they see several opportunities.
Stocks like Zoom have more than doubled during the pandemic, and the smart money is after these sorts of platforms, which are addressing the real gaps. Some of the common investment themes among family offices are as follows:
- Healthcare diagnostics
- Supply chain
Biotech stocks, health care diagnostics stocks, and companies involved in this space are on the shopping lists of family offices. Sir Anthony Ritossa, Ritossa Family Office, held his 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. Companies in healthcare technology represent an immense opportunity, and a majority of our attendees reported that they are actively seeking to expand their investments in these sectors. These areas have been an important investment focus for several years now, but the recent global health crisis has increased the focus on pharma, Biotech, and healthcare sectors, especially on companies with promising new technological advances.”
Investors are concerned about the disruption to the supply chain caused by the pandemic. They are aware that the supply chain in a post-Covid world is likely to change and may look completely different. Smart money wants a piece of this action.
The pandemic has brought many challenges for the basic supply chain inventory, and several businesses have been taken out of the market because of the higher prices for basic inventory.
Higher prices have caused a liquidity strap, and smart money wants to help out. “Fortunately, private investors and family offices are stepping up to support critical efforts to help, stabilize, and expand. The fast-changing agricultural technology (AgTech) sector is receiving renewed attention as companies seek new ways to improve food chain efficiency and reduce food waste,” Ritossa added.
Similarly, the investment focus among institutional investors is also looking at companies that can make the supply chain process more efficient. Lord Carmine Villani, Executive Board Member to Saudi Crown Holding and Managing Director of Multi-Family Offices Global Partners Limited, said, “we are looking at a company which packs Amazon AMZN ’s parcels in seconds, and all of this is done via technology. This cuts down the time for Amazon parcel delivery.” He said, “It is technologies like that we are very much interested in.”
Family offices are eyeing several distressed businesses, and they have the liquidity to go straight in. For most of these family offices to invest, they must see a robust business model and a good team behind them. Carmine said, “They are chiefly interested in investing in those businesses which have been operating for several years and have been paying dividends to their shareholders.” He said, “We understand that businesses are under stress in the current environment, and for these businesses to adapt to the new environment and scale their businesses, they need capital; we are glad to inject capital in the right opportunity.”
Investors always wonder how much wealth from a family office is deployed directly into the stock market and how much attention this smart money pays to daily stock market moves. Markus Lehner, Principal of the Markus Lehner Family Office, said, “These are interesting opportunities, but from a family office perspective, we want to back companies that are capital strapped now. Their focus is to capture the upcoming trends.”
Ritossa said, “There are many stocks which 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 co-investments. Indeed, they are eagerly looking for excellent opportunities to invest in, but at the same time, they do not want to take all the risk. For them, it is much better to have a partner who can share the risk and bring their expertise and contacts, which can help the business grow.