A Germany-headquartered multi-family office, which won a capital market licence earlier this year, talks about how UHNW investors can and should work with such firms to tap into expertise and gain insights.
While enthusiasm for “direct investing” (cutting out the fund
route) hasn’t fallen off a cliff since rates rose more than two
years ago, there appears to be renewed appetite for working with
experts via pooled vehicles such as funds instead of trying to
find investment gems all by oneself.
At Hamburg-headquartered multi-family office Lennertz & Co,
the case for providing expertise to other family offices, and
other investors remains as solid a proposition as ever, it
told this publication recently.
“If you are starting out and have limited experience [in private
markets] then every investment opportunity sounds very good, but
you need experience to differentiate between good teams and bad
teams as well as good and bad deals, get access to the top GPs
for an above-average performance compared to the market,” Oksana
Tiedt, head of funds at Lennertz & Co, said.
The best-performing funds tend to be off-limits because they are
already locked up and filled by the largest institutions,
especially in the US venture markets. This means that access to
top-quality investments can be challenging or take a very long
time to develop for a swathe of the wealth sector, she
continued.
“The Lennertz & Co team has a lot of experience from their
backgrounds. We have been in the market for a long time and
we have a big network, which is key,” she said. Clients can
leverage that network to help with access and understanding of
where the new opportunities are. “We co-invest, we do our own
deals, create access to GPs via feeders and offer fund of funds
for those who seek a diversified portfolio. Funds also see us as
a key source of information.”
“We hustle, we develop long-term relationships, we share
networks, and we tell our story,” she said.
Tiedt, originally from Ukraine and a German national in the
meantime, has worked in the US and London in various roles,
including Bain Capital and Goldman Sachs. After that she was
running a fund of funds business in the private equity space for
a German bank. She has been at Lennertz & Co for seven
years.
Lennertz & Co, founded in April 2015, has created an alternative
investments platform, for asset classes such as PE, real estate,
and foremost venture capital, etc. The family office started one
of the first blockchain venture fund of funds in 2019.
In late February, the MFO appointed
Neil Steinberg as chief commercial officer, who focuses on
the Germany, Austria and Switzerland (“DACH”) market. He
previously worked for 15 years at NetJets – the private jets
business – as regional sales director for the DACH region.
Earlier in February, Lennertz & Co was
granted a licence to operate as a capital management company
by German regulators. It also appointed Christian Piper to join
the management board of Lennertz & Co Capital GmbH. Its
supervisory board also consists of Prof Dr Klaus Trützschler
(chairman), Prof Dr Klaus Wucherer (former board member at
Siemens, SB Infineon, and SAP), and Prof Dr Heinrich von
Pierer (former CEO Siemens, SB Deutsche Bank and Berenberg
Bank).
The alternative team
Lennertz & Co’s alternative investments team has 15 people, and
the platform hosts about €900 million of assets. (The MFO doesn’t
disclose assets under custody/advisory of its family office
business.)
“The fastest growing asset class is venture capital and its
market which is driven by the emergence of AI technology and
blockchain innovations, in tandem with increased infrastructure
development, broader adoption, and agile investment strategies
that provide overall liquidity to the market. Private debt and
private equity are slower currently, given the macro uncertainty
and low liquidity,” Tiedt said.
The changed economic environment since rates rose more than two
years ago has had an impact on what people want to invest
in, she said.
“The deals driven by access to cheap financing and very high
valuations are no longer attractive to private equity players.
However, the private equity playbook is very broad, and we will
likely see more complex transactions with a high component of
operational work. Our recommendation is always to continue
investing across the alternatives landscape and focus on finding
the best teams and best strategies that adapt to the macro
conditions,” she continued.
Lennertz & Co charges an annual management and performance fee.
Tiedt said the fee levels are “in line with the global standard
in the alternative investment sector.”
“As a result, our family office clients and investors gain access
to the top tier of private equity and venture capital funds,
thereby achieving outstanding returns on their investments. They
also benefit from top-class PE/VC reporting from our in-house
fund administration and access to our PE/VC investment team,
which serves as a sparring partner for all PE/VC-related topics,”
Tiedt added.
