If not administered and managed correctly, family wealth is squandered in three generations. The success, happiness and peace of future generations depend on the ability of wealth managers, either of their own wealth or that of others. "The reality is that wealth is consumed in three generations. One of our functions is to eliminate or mitigate the possibility that the legacy is destroyed," says Ignacio Pakciarz, CEO of BigSur, in an interview with Funds Society.
Pakciarz is well aware of that fact because he has been managing wealth for many years, first from larger institutions and for the last six years at the helm of Big Sur, a “multi family office” which he founded with Rafael Iribarren in 2007, thanks to the support of six Latin American families who had faith on a group of professionals who were looking for a model capable of offering solutions tailored to clients’ needs, independently and without conflicts of interest.
In this respect, Pakciarz explained that previous experience of the BigSur team in large institutions, JP Morgan, Deutsche Bank and Goldman Sachs, to name just e a few, allowed them the opportunity to build a model without the shortcomings of the largest institutions and to give a bespoke service. “A business focused on avoiding many mistakes and conflicts of interest that occur in traditional private banking business."
At BigSur, says the manager, “we align the objectives, so there is zero conflict of interest and we are one hundred percent independent. It is about trying to provide a solution tailored to the clients: in terms of investment, fiduciary structure and the client’s stage of life. "
The average net worth of each of their client families is at about $ 50 million and the smallest around $10 million. Most are of Latin American origin, although many of them are international families, in which members are spread across countries, subject to different jurisdictions.
An advisory committee
As for its investment universe, Pakciarz said the firm has an investment committee which not only aims to improve clients’ returns, but also to minimize the risks, when faced with the possibility of negative market movements.
They invest according to the models developed in the firm, not only in stocks and bonds, but also in alternative products such as “private equity”, commodities, real estate and a small percentage in hedge funds, an asset that is not among their favorites. They have a team of 14 people with extensive experience in various financial instruments. "My focus as CEO is to assemble the best team in the market,” said Pakciarz. BigSur has appointed two new professionals in the last year with over 23 years of experience in "research" and "trading".
One of the features of BigSur is "always think of your clients as partners." After the crisis in the U.S. housing market, together with their clients, they found that the bond market had significantly decreased its appeal, and, on the other hand, that the property market had become very attractive, "both for the value of the properties as for the income which their rental produces.”A group of professionals, together with the firm's clients, detected the most efficient way to capture such an alternative, which benefits its Investors Club.
Pakciarz also explained that being independent; they associate with whoever may provide greater benefits to their clients-partners at any one time. These associations are based solely on the benefits to client-partners; since BigSur does not earn commissions on transactions or on products.
Finally, the executive said that BigSur wish to become the best alternative so that their clients do not suffer from one of the common characteristics of the financial market, “fear”. “This occurs when there is no transparency, the clients are uninformed, clients’ interests are not the same as those of the consultant, or a clear plan of investment is lacking. Families who come here are aware of what they want. They are concerned about their legacy and maintaining their wealth. "