La belle province is a hive of monetization, and multi-family offices are capitalizing on it. Numerous multi-family offices have shifted their attention to Quebec as they eye a surge in liquidity events and a new set of clients.
“It’s so busy right now – the market is full of opportunities,” says Catherine Janson, chief investment officer at Samara, a multi-family office in Montreal.
The Quebec market has traditionally yielded clients from manufacturing or real estate, but new ones are emerging: CEOs of former tech start-ups who have sold their businesses to private equity firms. These newly minted millionaires tend to be younger, accustomed to disruption and seeking partners who can meet their needs.
The trend has led new family-office entrants into Quebec who seek to capitalize on these new high-net-worth clients.
“It’s mainly a younger crowd – they’re selling their businesses and have not worked that closely with a bank,” says Janson. “Working with a bank is not their first reflex; there’s a tendency for these types of individuals to work with a non-bank institution or a multi-family office.”
More sophistication required
Business has been brisk, Janson says: “We’ve had seven or eight families who’ve come from this technology world who sold to private equity.”
Allison Comeau, chief experience officer at Grayhawk Investment Strategies in Calgary, says her firm’s experience has been similar.
“It’s definitely one of our busiest markets,” she says, adding that the company’s focus has been on Quebec for the past year. She says that she recently learned that eight new billionaires had been created in the province in the past year alone.
Montreal has been a hive of tech activity. The city is a big draw for start-ups – especially video game, IT, cybersecurity and media firms – due to its proximity to the U.S., low rents and access to tech talent. In fact, the city landed in 16th place in a 2021 ranking of top tech talent markets in North America, according to CBRE Group.
Justine Delisle, a partner with Richter in Montreal, notes, “We see a lot of enterprises looking for a family office.”
They want a one-stop platform, something that is integrated. They also want a partner that can connect the dots between the family office platform and the business advisory side.Justine Delisle, Richter
These entrepreneurs are not novices, Delisle says. “They are used to working with a lot of sophisticated people in their office and they expect the same level of sophistication,” she says. “They know much more what they want from their family office.”
Many have less-conservative investing interests, too, which mirror their aggressive approaches to growing their businesses, says Janson. They are interested in exploring alternative asset classes such as real estate, infrastructure, equity and private debt, she says. They want access to an open architecture – asset classes typically available only to pension funds, she says.
‘They’re new to wealth’
And they want a personalized, out-of-the-box approach to handling their money, something that family offices are well-versed at providing. These clients are not looking for the traditional balanced investing model the banks can provide – they’re looking for intimacy and continuity, and they want to ensure “wealth is transferred to the next generation in a most seamless way,” says Janson. “Their first goal is to protect their wealth – and not see it fluctuate.”
That’s because “in many cases, they’re new to wealth,” says Comeau. “They started at ground zero and their needs are more around helping them to be thoughtful around their family: What’s the purpose of their wealth? How do they declare their family values? How do they ensure the wealth has a positive impact on their family? What kind of structures can they set up to make sure they can continue to grow their wealth for their family?”
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These new clients are also supportive of other start-ups. Comeau says. “They want to share their success by going and investing in other peoples’ tech ideas,” she says. “They like sharing their expertise and their experiences to allow other families to be as successful as they were.”
This quest for something new means family offices need to stay on their toes, Delisle says. “These clients, they’re on to the next project. That entrepreneurial mindset keeps moving along. What they expect from a family office is that it’s run in an optimal manner.”
Looking for a white-glove approach
Family offices have a lot to offer these clients, says Comeau. Education is a focal point, as many clients have young children and want to ensure that their kids know how to manage wealth and make sound investing decisions. “Families are always worried that the money will cause more issues than positive outcomes,” she says. To that end, family offices can connect clients with advisors who can help navigate these issues.
Many also want more of a white-glove approach. “They’re looking for things that are more boutique, more customized,” says Comeau. This might include connecting them with advisors in tax and succession planning.
Delisle says many families seek a strategic-thinking partner rather than a product or services to determine what direction they’d like to take. “They want a one-stop platform, something that is integrated,” she says. “They also want a partner that can connect the dots between the family office platform and the business advisory side.”
Family offices can assist them in such things as selecting a trustee, she says, or help them map out the intent of a trust. Deeper conversations are needed to translate what that means to the family.
“They want to know more,” says Delisle. “They want to be educated, supported and have someone next to them to pilot their family enterprise with them.”