Family Office: Capital Preservation Through Market Volatility
A $75M family office managing multi-generational wealth across equities, real estate, and alternative investments sought to strengthen their capital preservation framework during volatile market cycles.
The Challenge
The family office faced three critical challenges: protecting accumulated capital during market downturns, maintaining consistent returns across different market regimes, and establishing a documented framework that could be transferred to the next generation of decision-makers.
Implementation Timeline
Month 1-2: Assessment & Framework Design
- •Comprehensive audit of existing portfolio allocation
- •Analysis of historical performance across market cycles
- •Development of customized preservation framework
- •Risk modeling and stress testing
Month 3-4: Portfolio Restructuring
- •Implementation of hedging strategies
- •Rebalancing across asset classes
- •Integration of alternative investments
- •Establishment of liquidity reserves
Month 5-12: Monitoring & Refinement
- •Quarterly performance reviews
- •Ongoing risk monitoring
- •Framework documentation for next generation
- •Continuous optimization
Key Metrics
| Metric | Before | After | Improvement |
|---|---|---|---|
| Maximum Drawdown | 32% | 8% | 75% reduction |
| Upside Capture | 65% | 75% | +10% |
| Volatility | 18% | 9% | 50% reduction |
| Sharpe Ratio | 0.8 | 1.6 | 100% improvement |
| Annualized Return | 7.2% | 8.1% | +90 bps |
Outcomes
Over a 5-year period spanning two significant market corrections (2020 and 2022), the family office achieved exceptional capital preservation while capturing meaningful upside during recoveries. The documented framework enabled smooth transition planning and increased confidence among family members about long-term wealth management.
"The real value wasn't just the returns. It was knowing our wealth preservation methodology would persist across generations. We can now step back with confidence."
Member Testimonial