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Exploring Family Office Investment Strategies

November 27, 2023

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Family office investment strategies are tasked with preserving their client’s wealth and managing risk for long-term asset stewardship and growth. Data suggests that for family offices that are focused on strong performance and returns, there is a noticeable pivot toward exploring non-traditional asset classes.

As the investment landscape continually evolves, family offices and RIAs are increasingly looking beyond conventional assets, seeking new strategies to diversify and strengthen their portfolios. This blog will explore why, and what family offices can gain from alternative asset investment strategies.

The Limitations of Traditional Investment Strategies

Traditional investment strategies, heavily reliant on stocks and bonds, can face limitations in terms of volatility and market correlation. For family offices and RIAs, this reliance can lead to concentrated risk and vulnerability to market fluctuations. Consequently, diversification beyond these conventional assets is becoming more and more important for finance professionals who are entrusted with the high net-worth portfolios of their clients.

Alternative asset investing can support the construction of a more balanced portfolio, reducing some dependency on the stock market’s ups and downs and providing a potential cushion against economic downturns.

The increasing Importance of Alternative Assets

Alternative asset investments include assets like real estate, private equity, hedge funds, and Merchant Cash Advances (MCAs). Alternative assets are gaining traction among family offices and RIAs due to their potential for higher returns, effective risk mitigation, and strong diversification qualities.

Alternative asset investments can contribute to reducing the overall risk profile of a portfolio while also offering opportunities for growth. By complementing standard asset classes with these alternatives, investors can achieve a more robust and balanced investment strategy.

Digital rendering of a hand holding a stopwatch in front of a credit card and dollar bills for ‘Exploring Family Office Investment Strategies- Beyond Traditional Assets’
Alternative assets can bring in vital diversification. Photo by Monstera Production.

The Role of Merchant Cash Advances in Family Office Investment Strategies

Merchant Cash Advances are gaining traction as an attractive alternative investment option for family offices seeking diversification and potentially higher returns than many traditional asset offerings.

MCAs work by providing businesses with upfront capital in exchange for a percentage of future credit card sales, creating a flexible repayment structure. This unique mechanism allows for potentially higher returns compared to traditional fixed-income assets. Including MCAs in an investment portfolio can offer family offices not only a diversification away from conventional market-linked assets but also an opportunity to tap into the growth potential of a diverse range of businesses, supporting the growth and flourishing of local businesses.

Digital rendering of a man in a suit under a one hundred dollar bill for ‘Exploring Family Office Investment Strategies- Beyond Traditional Assets’
High Net Worth portfolios are increasingly incorporating alternative assets for their diversifying capabilities. Photo by Monstera Production

Why Choose Supervest as Your Partner in MCA Investment

At Supervest, we are proud to report our Q3 earnings results – that we have returned 100% of our target ROI on both our 10% and our 12% MCA notes.

Key to our success is our stringent due diligence process and comprehensive risk management strategies, which give a balanced approach to high-return potential while maintaining risk control. We believe that our combination of both yield and safety positions us as an optimal partner for family offices and RIAs aiming to diversify with confidence and foresight.

To deepen your understanding of how MCAs can complement your investment approach, we invite you to access our comprehensive resources at Supervest. Here, you’ll find detailed insights and expert analyses that can help inform your decision-making process.

Explore our educational materials to gain a clearer perspective on integrating these innovative investment strategies into your portfolio.

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