Article written by Simone Grogan. Published in The West Australian on Friday October 18, 2024.
A wealth manager owned by Liechtenstein royalty is on the hunt for more advisers to service the high-net-worth families of WA, who are looking for more than just a punt on mining stocks.
LGT Crestone chief executive Michael Chisholm said there had been a big uptick of inbound demand for the global wealth management firm’s services in WA in the past couple of years, as the State’s rich ponder the best way to future-proof their millions through a tempestuous economy.
“As their wealth grows, they tend to move and more into diversification beyond just domestic equities, into perhaps international equities, private equity, venture capital, infrastructure, global property,” he said.
“The diversification approach means that you’re prepared, regardless of what happens, you can deal with unexpected shocks and crises that come out of the blue.”
The firm is among the global wealth managers with offices in Australia, as well as local players, that are clamouring to offer funds, advice or help set up and run family offices for the wealthy and ultra wealthy.
It’s become a big business, and many are betting it will get bigger.
According to Deloitte, there is $US5.5 trillion ($8.2tr) tied up in family offices and the big four firm tips it will grow to $US9.5tr by 2030.
After only having one adviser stationed in Perth, LGT Crestone has hired two more in the past 12 months. The firm is yet to cement a formal presence in town, but Mr Chisholm says the firm is looking to grow.
“With three advisers onshore, we’ve seen a lot more interest from clients, and we see a very significant growth path ahead for our business over the coming years, certainly we’d be looking at hiring new advisers,” Mr Chisholm said.
On the money front, LGT chief investment officer Scott Haslem’s view is that the usual mix of equities and bonds isn’t going to deliver the best risk adjusted returns in the unpredictable 2024 global economy.
Because of that, he said wealthy investors were looking to push further into assets “uncorrelated” to the two traditional classes, particularly to avoid the sting of inflation, which Mr Haslem expects to remain elevated for the next decade.
“Beyond those sort of, let’s call it more familiar, unlisted assets of private credit, private equity and hedge funds, we’re really pushing out into what we’re now calling alternative alternatives, really, truly uncorrelated investments,” he said.
“That might include investments in things like litigation finance or (music) royalties, life insurance runoff, areas that are really uncorrelated. And so the more uncorrelated things you can put in a portfolio, the better the risk adjusted returns will be.”
As is true of most families, CEO Mr Chisholm said preventing disputes over money is a big priority in an increasingly wealthy WA.
“We all see, unfortunately, too many headline articles of families where the children or siblings are suing each other, pursuing each other in court,” he said.
“Family governance, family advisory, dispute resolution, succession planning ... values as well. That’s really increasingly important for really wealthy families and family offices.”
After being spun out from UBS wealth management in 2015 to become Crestone, the firm was taken over by Liechtenstein royal family-owned LGT in 2022. LGT is chaired by Liechtensteiner Prince and businessman, Max von Liechtenstein.
