Strategy

EG: How important is it to develop a robust strategy in challenging times, to maintain the integrity of intergenerational wealth through several generations? 

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Romain Gerardin-Fresse: A crisis is a time when everything can rock if each parameter is not perfectly treated. The key element is to maintain composure and scrupulously plan each step of the strategy. Secure assets contain consequences and prepare for the aftermath. Clearly defining the axis of the strategy to adopt, taking into account each specificity both specific to the crisis itself, and to the profile of the client is an essential variable. This is obviously fully applicable in order to preserve the integrity of intergenerational wealth. 

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EG: And how different may the deployment of intergenerational wealth strategies look through successive generations with a Multi Family Office, as opposed to a Single Family Office?
 

RGF: The multiplicity of supports, which can be acquired only through a diversification of profiles and a raise in the financial areas of the assets under management, allows us to grasp with much more flexibility over the crisis, whose origin of which matters little elsewhere, because all of them – whether concerning the ecology, health, politic or environment– ultimately result in an economic crisis.
 

The financial markets are absolutely horrified by the uncertainty and the temporary lack of horizon. We saw it with the Covid-19 crisis, where VIX, VXN and VXD (US financial market volatility indices) reached record highs. The interest of a Multi-family office on a Single-Family Office is therefore undeniable.

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EG: What are some of the ways you think that investors can diversify portfolios in an era of heightened risk and capitalise on opportunities? 

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RGF: One part is to invest in safe haven assets, such as gold, real estate, or the Swiss franc. Bonds are still attractive over the long term. They have a negative correlation with risky assets. But many opportunities can flourish, precisely in correlation with the crisis.

As we have seen with Covid-19, the sectors dealing with biotechnology or some start-ups focused on the medical field have sometimes gained 2,000% since the beginning of the year.
 

Completely delirious bubbles induced both by pure speculative syndromes, but also by successive announcements according to the advances that are intimately linked to the crisis in itself are the same, like the approval of specific equipment such as test kits or the ratification of a major contract with a government.

EG: Tell us about the strategies you have deployed to help your clients emerge victoriously through some of the greatest crises in the past?

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RGF: Émile de Girardin, a French politician of the 19th century, said that ‘‘governing is planning; and not planning anything is running to its doom’’.
 

Effective crisis management is significantly improved if you anticipated different situations upstream that might have found a similar outcome. This is why constant legal and economic monitoring is particularly useful and effective. It saves time and efficiency.
 

Let us take the example of some major groups that we accompanied during this crisis; We have taken a firm stand with suppliers to temporarily suspend the financial obligations under Forced Majeure, resolved the salary component in accordance with related legislation, and established a clear communications strategy for clients.
 

At the same time, we have reorganised the archetype of work and rearranged the patterns to be applied for them, while strengthening their cash flow by taking advantage of the proposed mechanisms, including bank and state support.
 

EG: With expertise in legal, taxation and business strategy fields, what macroeconomic trends do you foresee impacting Multi Family Offices within the next 12 months? 

RGF: The economic impact will be long and particularly severe. In Europe, the recession is now inevitable. Non-essential services closed by government decree, account for about one third of production. It is estimated that every month that these sectors remain closed, this is transposed by a 3% drop in annual GDP. France already foresees that nearly 20 years of growth will be annihilated by the Covid-19 crisis. Between January and March, GDP fell by 6%. This is dramatically historic. The social impact will also be extremely hard. 30 million unemployed more in the USA. There won’t be a return to a normal situation. Tens of millions of jobs around the world are going to be destroyed. Millions of companies are going to close. Some airlines have dropped nearly 20% of their fleet. All the major states of the world have activated «the money pumps» by «turning the banknotes» in order to compensate. The problem is that this government debt, which is sometimes unheard of, raises fears of historic inflation. We will have to pay particular attention to it. As is a fact that states may want to bail out by raising certain taxes or inventing new ones. These are watch points to scrutinise.

EG: Explain why the need for your core competencies covering the breadth of law, taxation, business strategy and crisis communication in one holistic offering, may be more important now than ever? 
  
RGF: That’s exactly what I was explaining. The management of an effective crisis is improved if, upstream, you anticipated. This is why constant legal and economic monitoring is imperative, and in all areas: tax, regulatory, normative, and financial. The complementarity of the offer is a precious optimisation, in a period where time is limited, more than ever. You can act simultaneously, with precision and speed.  

EG: Being one of the top 10 legal experts in Europe, as well as advisor to governments, royalty, celebrities and directors of large international groups, how important is integrity in developing networks and relationships? 

RGF: There is a quote by Blaise Pascal that I like very much; “Integrity is the search for honesty to oneself and not the search for integration with others.” 
 

I firmly believe that. Moreover, integrity creates credibility. I strive to always improve our services, and to treat all our clients with the same respect and consideration. The recognition which I receive is the result.

EG: As an award-winning firm, how may Family Offices depend on GfK Conseils-Juridis as a beacon of stability and strength amidst the rolling tides of change?

RGF: We regularly exchange with our colleagues, and we gladly give them our opinion on the present situation or on a given subject when they ask us. I have also noticed that some people use our articles or publications on their websites as a reference value for their customers. I am proud and delighted to be able to contribute to a profession that must always be at the top of excellence for particularly demanding clients.   EG