Introduction
Dear Readers,
We hope you're enjoying the start of summer, wherever you are finding yourself this month.
June started with the SuperReturn in Berlin as it does every year, and while we skipped the main conference, we joined a number of side events and dinners - always a good opportunity to catch up with managers and peers. Tamara also made it to New York early in the month, where she celebrated the New York Knicks' NBA championship.
The World Cup is well underway, and to mark the occasion, we hosted our summer social event, watching the round of 32 over drinks and snacks with clients, intermediaries, and friends. It was a great evening - despite Germany’s unfortunate loss against Paraguay earlier in the week.
On the client side, two topics dominated June. The first was wealth transfer, structuring usufruct (Nießbrauch) and gifting (Schenkung) arrangements in a way that is tax-efficient and actually reflects what families want for the next generation. The second was bonds: we fielded more questions about fixed income this month than perhaps any other topic, which led directly to this month's Bonds: A Primer. In case you’ve been wondering what role bonds should actually play in a portfolio, it is certainly worth a read.
All the best,
Jan & the Cape May team
What’s new with Cape May
Cape May had its two-year anniversary on June 18th last month. To many more years! 🚀
How we served our clients this month
Client meetings, prospect conversations, and our summer social event. A few highlights:
Conducted a comprehensive workshop for an entrepreneur ahead of a significant exit, covering portfolio allocation, alternative assets such as private equity and venture capital, family office setup, charitable giving, asset transfer considerations, and other related structural implications
Reviewed a client's existing portfolio and discussed the potential addition of bonds, commodities, and hedge funds, while also working through the implications of transitioning their holding structure from a KG to a GmbH
Researched the green bond segment for a client pursuing a sustainability-oriented investment strategy, assessing the specific implications of a green bond allocation, the available ETF options, and where the trade-offs lie between impact and return
Advised a client on the transfer of assets to their children, working through potential structures and how to approach the transfer in the most tax-efficient way given the children's age
Modelled the long-term impact of capital calls, fund redemptions, and carried interest on a client's overall asset growth, illustrating how the timing and sequencing of these cash flows affects both wealth preservation and consumption capacity over time
Assisted a family office in the holistic review of their investment portfolio, taking into account their investment objectives, prior considerations, income targets, and made suggestions on potential ways to simplify and to reduce costs
Managed a family office client’s RFP process, comparing and renegotiating bank offers across German and international banks
Supported an entrepreneur on capital protection measures in their portfolio, covering topics such as Swiss and US custody, opening of foreign bank accounts, as well as appropriate portfolio structure to ensure maximum diversification
Calculated a client’s ideal equity/debt split for the purchase of a private residence, taking into account family income, available equity, and their personal preferences
Introduced a client to a trusted debt advisor in our network for a real estate financing, realizing a >0,5% improvement in interest rate relative to the initial offer by their relationship bank
Svea and I shared our best practices with a fellow financial advisor on how we conduct our financial planning process - if you are a fellow (German) financial advisor who wants to network and learn from one another, send me an email, we always love to connect with our peers!
As always, if any of the above resonates with your situation, don't hesitate to reach out.
Cape May in the News
In early June, Jan had the chance to share his perspective on a question that comes up quite a lot: do you actually need more complexity once you've reached a certain level of wealth? Many investors assume that “more” wealth means more esoteric investments like Liechtenstein foundations, PE fund stakes, complex hedge fund structures. In practice, it's usually the opposite. What affluent investors want, more often than not, is less complexity. Jan discussed this with Christiane von Hardenberg, and her column “What can we learn from wealth managers” in the Frankfurter Allgemeine Zeitung.
In the first week of July, Svea joined Finanzfluss for a deep dive episode on the intersection of sports and investing. The conversation covered why an increasing number of PE funds are moving into the sports business, whether this asset class is relevant for private investors, and what the growing role of institutional capital means for sports and fan culture more broadly.
If you have a podcast, a blog, or another type of publication that you think would benefit from our views and network, don't hesitate to reach out.
Cape May Wealth Weekly
In June, we covered a number of topics:
In The Quantitative Approach to Private Equity, we tried to make sense of private equity's historical return data and the question that matters for most investors: when is it actually worth it?
In Bonds: A Primer, we tackled the mechanics of bonds and the common misconceptions about their role in a portfolio. A piece that felt timely given how often the topic came up in client conversations this month.
In The Business Behind the Beautiful Game, Svea looked at how professional sports has evolved into an alternative asset class in its own right - well-timed given the World Cup backdrop. (Make sure to give her newsletter a follow as well!)
In Path Dependence, we explored the illusion of linear returns. Why the sequence of gains and losses matters just as much as the average return, and what that means for how investors should think about risk.
In A Case for Investment Outsourcing, we made the argument that family offices, and affluent investors more broadly, might be better served by doing less themselves, not more.
And as always, if there's something you'd like us to dig into that we haven't covered yet, we'd love to hear it.
Final Remarks
A big thank you to everyone who joined our summer event. It was great to catch up with clients, intermediaries, and friends over football and a cold drink or two. The atmosphere was great. If you'd like to be included in one of our upcoming social events in Berlin, just let us know, we're always happy to expand the circle.
Thanks for reading, and enjoy the warm weather weather you are in Germany or abroad!
Cape May Wealth Advisors is a Berlin-based wealth management firm focused on helping affluent entrepreneurs find financial independence. If you are interested in learning more about how we can help you, reach out to us via email, and make sure to subscribe to our newsletter.