Managing the interests of wealthy families

Munish Randev has been an avid trekker and has extensively walked the Zermatt region of the Swiss Alps. Cervin derives its name from the French name of the iconic Matterhorn peak in Zermatt, which Munish says stands resolute and epitomises a fiercely independent nature. When he decided to start his own venture to advise wealthy families on managing their wealth, he named it Cervin as he believes it embodies the basic tenets of his venture.

According to Munish, who in June founded Cervin Family Office & Advisors and is its CEO, across the world most large wealthy families work through family offices — privately held entities that handle their wealth and investment — rather than through banks or pure wealth or investment managers. The family office can be a single family office, meaning it is handling the wealth of one family alone or a multi-family office, an entity that handles the wealth of many large wealthy families.

A graduate in economics and mathematics and a postgraduate in management, Munish, who has over 25 years of experience in the wealth and investment management business with various companies such as ABN Amro Bank, Fidelity International and Waterfield Advisors, was advising wealthy families on an independent basis for the last one year before formally starting his company.

“The most important issue,” says Munish, “is for a family office to be truly independent to gain the trust and confidence of the family for which it is managing the wealth.” An investment manager or a wealth management firm may push products, but a family office has no product to sell and only gives advice for which it is paid a fee.

Gaining prominence in India

While the concept of a family office is quite common in the West, it has been taking shape in India only in the last decade or so, especially after a business moved from one generation to the next or when the original founders had money that they were not ploughing back into the business and wanted that to be either safe or multiplied. There are families that have come into a lot of wealth when they cashed out from their business. The idea is to ensure that the wealth does not lie idle and is properly invested across multiple asset classes.

The family office structure is also gaining prominence as the families were using the same set up they had in their business to take care of their wealth, but no longer want to do so. They want someone who is independent of their business to advise them.

Munish says that Cervin offers a range of services to its clients — advisory, governance, strategy and financial planning. It takes care of investment planning, family governance, wealth structuring and philanthropy. The company helps draw up a family governance code, a succession structure and even does a quarterly portfolio risk analytics. Each member of the family may have a different idea on what he or she wants and Cervin’s task is to take care of everyone’s interest. “We have a quarterly risk appraisal board for the family office board, it is almost like a company board meeting that we run. That helps the family members get updated on a regular basis,” says Munish.

Investment opportunities

He says they work with the families to look at the investment opportunities available — some of them may want to set apart some money for philanthropy, some may want to back socially impactful ventures, some may want to invest in and nurture start-ups, or some may want to back venture capital firms. Cervin takes care of all these interests. “There is a benefit of working with a family office advisor who is not going to sell them anything, they are only selling their knowledge and advisory,” says Munish.

In families where the third generation has entered the business, the challenge says Munish is “to have all three generations in the same room and have a solution which is acceptable to all of them. That requires a lot of interaction with the family members individually as well.” The main task is to ensure that there is no friction within the family as, otherwise, the wealth will be frittered away.