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Founder story: Petr

Fifteen years ago, Petr, one of the founders of Family Office Partners, first felt the need to diversify his business earnings, which represented his first significant pool of capital. Like most people in a similar situation, his initial impulse was to find the “right” private bank. He assumed they would take care of everything, and that is exactly what happened.

This led to allocations across various funds and, in retrospect, some highly unattractive bond investments. Nevertheless, the money was being managed, and he felt a genuine sense of satisfaction with his choice at the time. In parallel, he invested part of his capital in land overseas and purchased physical gold and silver, also held abroad. Overall, it was likely better diversification than keeping everything in one currency and in one place.

As time passed and his knowledge grew, the first shortcomings in the management of his wealth began to emerge:

  • The portfolio did not adequately reflect the desired allocation across individual asset classes,
  • asset classes such as private equity (PE), venture capital (VC), or art were not represented in the portfolio at all,
  • land investments and real estate development, on the other hand, accounted for a disproportionately large and therefore risky share of the portfolio,
  • the portfolio was unable to generate regular passive cash flow and was almost entirely illiquid,
  • management was expensive,
  • the managers did not invest alongside him and therefore could not fully align their interests with his,
  • there was a lack of periodic feedback regarding the long-term direction of the portfolio and the role each asset class was intended to play,
  • and there was no centralized overview of the financial, accounting, and legal information relating to each investment.

Above all, there was the lingering uncertainty of whether, in a worst-case scenario, the family would be able to take over, understand, and manage the individual parts of the portfolio.

Although it was not a crisis, gradual self-reflection and education led Petr to look for a better solution. One that would provide greater transparency across his entire wealth while addressing the shortcomings above. The flexibility and performance of the private bank fell short of his expectations, so the decision to leave was easy, even at the cost of giving up an otherwise good relationship with his personal banker.

Where could he find managers with long-term experience and access to alternative asset classes such as PE, VC, thematic funds, agricultural land, and art?

Petr spends part of his life abroad, including in places with a high concentration of ultra-high-net-worth individuals (UHNWIs). Conversations with people who had already faced many of the same wealth management challenges led him to explore multi-family office services. Not in traditional wealth management centers like Switzerland or Luxembourg, but, because of his family ties and connection to his home country, in the Czech Republic.

Back in 2016, however, it became clear that, with very few exceptions, the multi-family office sector had yet to develop in the Czech Republic. And so the story could not continue there yet.

Petr spent the following years reallocating his assets and restructuring the way his portfolio was managed. He did this with the help of wealthier, more knowledgeable friends abroad who had gone through a similar process years earlier.

He waited for a competent player to emerge in the Czech Republic who could comprehensively oversee the family’s entire wealth, support its transfer across generations, and protect its value from inflation over the long term. A team with firsthand experience across a broad range of asset classes and investment strategies, while ensuring that the portfolio did not become unnecessarily complex and opaque.

The Czech wealth management market is gradually maturing, but true multi-family office partners remain few and far between (2019).

When the multi-family office industry in the Czech Republic still hadn't developed to the level Petr was looking for, the natural solution was to build one himself. By coincidence, he connected with other partners with relevant experience and similar needs, and a multi-family office for UHNWI families and individuals based in Prague was formally established.

Family Office Partners is a multi-family office originally created to manage the wealth of its founders.

In other words, in the absence of a suitable domestic solution, the founders decided to build on their own long-term experience of managing family wealth. Over time, it became clear that they were not alone in looking for a comprehensive and effective way to manage their entire wealth.

Today, Family Office Partners works with other UHNWI families and remains open to a limited number of suitable new partner families. It provides access to a broad range of investment opportunities, with an emphasis on currency and geographical diversification, including outside the Czech Republic and Slovakia.

It also coordinates related services with leading external experts in law, tax, accounting, and other disciplines. Our journey is inherently long-term; a multi-family office partnership is measured in decades.