Caduff: Mr. Hill, you like to be called “Mr. Family Office” in the German financial center. Why are you so interested in this area of business?
Hill: The original idea of a family office is to manage a family’s capital to the best of its knowledge and belief. What I find interesting about this segment is the possible variety of activities, depending on how the organization is structured: managing conflicts of interest, networking experts, neutrally evaluating and selecting products and services, and also the demand for “special services” (seeding fund concepts, direct investments, “M&A projects,” succession issues, governance, etc.). I experience the representatives of this segment as pleasantly inquisitive and with a wide range of interests, not only in terms of product topics. Art, culture, entrepreneurship, politics – one often senses here that there is active participation in the fate of the community. It is not for nothing that close ties to foundations and universities can often be found. Incidentally, some of these elements can also be found in fund boutiques: Entrepreneurship, independence, and the quality of being a “believer” – as is often found in family officers: You do what you love to do. I have been self-employed since 2005, and before that, I always had fields of activity in which I could exchange ideas with a very large number of experts from a wide range of disciplines. As an economist, I also appreciate the “eagle’s eye view” on certain topics, which I guess is also called the joy of networked thinking – in combination with professional expertise.
Caduff: The term “family office” is not protected, and some traditional asset managers use it as an embellishment. Does that bother you?
Hill: Not at all. Every pot finds its lid. Excellent family offices probably suffer less from this because they don’t want to sell “anything”. Since the job description of a family officer seems to me to be very attractive, it may even have a positive aspect: Many professionals may have learned for the first time through the controversial discussion that these very interesting jobs exist. Diffusion of knowledge in an industry does less harm, after all. Similar to the term fund boutiques, it seems to me that the term family office has not yet been exhaustively discussed and defined from an academic point of view. I am following the publications of various experts with interest. It is not yet clear to me who will ultimately win the upper hand on the definition. But I also understand the criticism of some representatives from the segment of classic single-family offices. Here I perceive a “nose-rubbing” from time to time when it comes to the topic of group-linked multi-family offices and the topic of “proprietary products & pseudo-neutrality”. One should always take a close look at the individual organizations and their representatives here: Of course, there are also excellent professionals here who know that they are competing in the family office services segment. I have no fundamental reservations about “proprietary products”. On the contrary, one of my current projects is to discover special fund concepts through exchanges with many family offices (in addition to asset managers, fund of funds managers, etc.), where initial due diligence and investments have already taken place. Especially here, one often comes across interesting funds that are hardly known, as these were primarily designed for the investment of family assets. Sometimes these are recommended to “Friends & Family” without much marketing effort. For this reason alone, I would like to see a more differentiated discussion on the topic of proprietary products in the family office segment. Family officers often discover and create products and services that then benefit “colleagues” and other investors!
Caduff: You are also heavily involved with funds from smaller and medium-sized providers. What’s so exciting about that? After all, there are more than enough large addresses.
Hill: That’s right. There are many large and good addresses, and I would like to make that clear at this point. In a fund selection project, I do not exclude this segment from the analysis. If a corporate flagship product should be “better” – why should one select a “bad” fund boutique? Fairness is not a disadvantage. The “small” independent houses, in my opinion, give a lot of pleasure in due diligence. Why is that? Many of these contractors have excellent expertise in their particular fields. This expertise is then combined with the factors of entrepreneurial biography, independence, and skin-in-the-game (“own money in own fund”). These concepts are often referred to as “high conviction”: In the truest sense of the word – conviction in the expertly managed segment (stocks, bonds, investment style, “exotic” asset classes, etc.) combined with conviction in one’s entrepreneurial skills. It is a pleasure to speak with many of these hidden champions of the financial industry. Incidentally, this is one reason why many family offices and independent asset managers enjoy exchanging professional ideas with the fund boutique representatives. And, it’s often forgotten, specific to these groups: They all do the things they are passionate about.
Caduff: Let’s move on to your business model – what exactly do you offer?
Hill: I come from the “special projects” corner. Manager search, seed money search, fund concept feedback surveys (direct professional exchange of ideas with the investor side), etc. At first, I worked in Product Management, later moved to Marketing & Sales, and then “slipped” back into the Fund Selection & Fund Boutiques segment by working with a fund of funds manager. Through the cooperation with Universal-Investment at that time, I came to write about the fund boutiques & private label funds segment. Two years ago the fund company Ampega gave me the impulse (impulse & support) to set up my website with the title fondsboutiquen.de. Because of this project, there is an additional opportunity to make smaller boutiques a bit more visible in the market. Social media, press, interviews, often also direct contact to investors (no substitute for sales – rather in the sense: ask directly if there is interest in direct contact to the boutique owner – he must score professionally as an interlocutor with the investor, offer added value in terms of education, there is no interest in pure “product promotion talks”), accompany and promote events, accompany thematic campaigns on certain asset classes, publish guest articles, “to the point whitepapers” on specialist topics, etc. On the one hand, these media activities support my projects, and on the other hand, they enable me to get to know a large number of interesting personalities, both nationally and internationally. It is perhaps interesting to note that over the years I have made many contacts in the “non-liquid products” sector – AIF segment, real assets, real estate, venture capital, private equity, etc.: There are also many interesting entrepreneurs who are dealing with the topic of visibility, positioning & branding.
Caduff: Do you still have free capacities for new clients?
Hill: I can currently attend to a specific number of projects. Particularly interesting for me are topics that I like to follow in terms of content. Things where I can associate my favorite topics. Fund boutiques, family offices, and Frankfurt as a financial center. I am not competing with PR agencies, event organizers, and trade publications, rather I can be seen as a supplement, “helicopter above the industry” – because I am constantly catering to special projects and am not a classic journalist. The area of market observation of fund boutiques/fund concepts alone takes up a lot of my time. The topics must interest me – I like to do what used to be called “sector marketing” (just enter the keyword Markus Hill & fund boutiques in Google, number of opinion comments on this segment in DACH region): How can you follow a subject area in terms of content, describe it, make it more visual without boring people with pure product info? The entrepreneurial personalities in combination with technical expertise are what lead to the fact that investors would also like to exchange ideas with them. In the end, this can result in a “ticket” for the provider. Especially since communication takes place via various channels here, the boutique sales department is in close contact with the investors anyway, due to my independent status I have a completely different role. With a genuine effort, one has a joyful, intellectual exchange of ideas from both sides, one appreciates each other’s interaction which leads to intensive cooperation. This bridge “pull-effect-through-professional-fascination” cannot be created by any sales or marketing representative. The ideal customer comprehends my approach, where I have to understand and appreciate the philosophy (DNA & passion) of the customer! Of course, humility is the order of the day – there is potential upside for me too: Just as there are many other representatives in the industry besides me, who exhibit excellent skills & communications providing top platforms for the industry with easy reach. These thoughts also led to the concept idea “Financial Center Frankfurt meets Switzerland”. Swiss fund boutiques in particular are attracting interest from German fund selectors; unfortunately, a lot of potential is not yet being exploited.
Caduff: What are you working on more intensively this year?
Hill: Similar to you, I like the personal exchange of ideas. Thank you very much at this point for the invitations to your Frankfurt events. You would be an interesting interview partner. What else is coming up in 2022? Various formats on the topics Family Offices (Impact Investing, Next-Gen) & Outlook 2030 survey on the topic “Family Offices, Foundations & Know-how” as well as a panel discussion on this topic in an extended form, as well as a panel on the topic “Global Investment Outlook”, a media partnership of fondsboutiquen.de and finanzplatz-frankfurt-main.de (5th Sustainable Investor Summit D-A-CH 2022). In advance I thank here already Tobias Karow of stiftungsmarktplatz.eu and the Marketsgroup, I look forward to the discussion on the topic Family Offices – I will be leading many discussions with specialized experts. I am still planning a small format for Frankfurt (“out of the box”) in the 2nd half of the year, the topic does not have to be commercially motivated at all. Also the discussion group “Frankfurt Dialog” will take place in September, the annual event with SIA Funds AG should take place again in that month. Topic areas I am currently following with more interest: value investing, real estate, commodities, digital assets, artificial intelligence & asset management, etc. About two years ago, I set up several independent “specialist channels” on LinkedIn: Frankfurt Financial Center, Fund Boutiques, Private Label Funds, Fund Boutiques, Cat Bonds. These channels have met with a good response. I am always grateful for inputs, ideas, suggestions for these formats. Next week, I will also take a closer look at the content of the training courses (specialist seminars from Fürstenberg) on the topic of family offices, as I am still in a special “debt to pay”. 2022 will be another interesting year, the financial center Frankfurt as a center of competence and pleasant place for the exchange of ideas should not be lost sight of – in advance I also look forward to your next event.
Markus Hill has been an independent asset management consultant since mid-2005. His professional background includes companies such as SEB Bank (marketing/product management, investment banking) and Credit Suisse Asset Management (sales, asset management). His fields of activity include the support of mandates in marketing, PR, and fund selection. As former Head of Sales mutual funds at an investment boutique (equities and fixed income) and in external cooperation with a fund of funds manager, small to mid-sized asset management firms are the focus of his interest. In addition, he shares his knowledge with media involved with the topics of fund boutiques (fondsboutiquen.de) and the use of mutual funds by institutional investors as well as with the topic of target fund selection in multi-management approaches. Additionally, the financial center Frankfurt am Main is close to his heart as a place for the exchange of various dialogue (finanzplatz-frankfurt-main.de).
- Family offices, fund initiators, and the “burning passion” factor (Interview – Markus Hill, Thomas Caduff)
- Family offices and fund boutiques have many similarities (Interview – Thomas Caduff, Markus Hill)
- Frankfurt is always worth a trip – not only for financial professionals! (Interview – Thomas Caduff, Markus Hill)