Renewable energy, agrarian investments, forestry and various other real asset components (“tangible assets”) have meantime assumed mainstream character in daily reporting. Controversial discussions on the so-called energy transition in Germany take place every bit as regularly as discussions in the specialized press about attractive investment possibilities and about adequate product packages. The industry provides attractiveness points for investor groups. A group which appears to be one of the more attractive is the Family Office. A question which arises: Do we barge through open doors with vehemence in the product presentation of real asset products on the part of the product provider from home and abroad?

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Real Assets and Family Offices – “constructive wait-and-see
attitude” as possible investment approach
By Markus Hill, Independent Asset Management Consultant
(Published only in German, www.finanzen.net)
Renewable energy, agrarian investments, forestry and various other real asset components (“tangible
assets”) have meantime assumed mainstream character in daily reporting. Controversial discussions on
the so-called energy transition in Germany take place every bit as regularly as discussions in the
specialized press about attractive investment possibilities and about adequate product packages. The
industry provides attractiveness points for investor groups. A group which appears to be one of the
more attractive is the Family Office. A question which arises: Do we barge through open doors with
vehemence in the product presentation of real asset products on the part of the product provider from
home and abroad?
Situation regarding Decision
Investment fields such as renewable energy (wind power, solar energy, bio fuel, etc.), infrastructure,
real estate and forestry and investments in the agrarian sector are so designed that they generally
remind us of project financing or, respectively, direct investment, when less attention is paid directly
to the well-known SRI investment instruments such as stocks, pensions and funds (advantage in
transparency: databases, research – disadvantage: discussion on criteria). In summary: in the case of
complex investment structures and where there is a lack of industry know-how, many product deciders
from Family Offices regard this as a kind of black box: If I invest in one project or in a bundle of
projects, then the investment is often “entrepreneurial” with an additional component of illiquidity (at
least on a temporary basis). The management qualities of domestic and foreign product providers must
be evaluated. Industry-related characteristics must be taken into account. Product packages must also
be rated. A reduction in complexity in the product selection process appears to be necessary.
Family Offices and Risk Management
In discussions with representatives of Family Offices in regard to classic investment products or
apparently new real asset product variations, it quickly becomes clear that long-term orientation in the
investment policy, “moderately realistic” yield expectations and more consideration given to risk
management form the core of the product selection process. Assets already generated are to be
retained. This does not necessarily contradict the growth target. It is possible to agree on a value which
equals the real inflation rate and the factor “x”. Growths stemming from operative activity at a hectic
pace in decisions on allocation or blind allegiance to products are both out of place here. For the
responsible administrator of his client’s assets, the motto here is: strength is born of calmness!
Regulation and Risk Management

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Current trends in the field of regulation are completely in line with the priority in risk management in
Family Offices. Catchwords here are: AIFM, closed-end funds. Many of the aforementioned real asset
investment offers are currently offered under the product heading of closed-end funds. As a result of
the AIFM guideline, fields such transparency, outsourcing, organization, safekeeping and equity
capital are found at the center of discussion. Product providers in this field currently have to check
their own business model. In future, classic investment companies such as Universal Investment,
Hauck & Aufhäuser, Union Investment, etc., will gain in importance in this particular sector.
As a result of the current density of regulation in the investment company sector and as a result of their
experience gained at numerous funds locations together with their know-how in regulation and
reporting in the real asset field, investment companies qualify to an ever-greater extent as suitable
discussion partners for institutional investors such as, for example, Family Offices.
Outlook: Constructive wait-and-see attitude and the process of discovery
Domestic and foreign product providers in the field of real assets currently appear to be stimulated to
greater activity through earnings pressure in the case of certain circles of investors and in product
provider circles. In communication setting in Family Offices and providers it is often forgotten that
product deciders, too, are only people who also have to deal economically with the factors of time and
communication. This can lead to frustration on both sides. Product sales requirements often stand in
contrast to the needs of the investors. As the range of product variations in “real assets” also
represents a discovery process in regard to know-how and the selection process (e.g., internal or
external?) a variation favoring a gain in time can be chosen for the mandates of some Family Offices:
investments in real assets – “constructive wait-and-see attitude” as the path to the organic development
of know-how!
Feedback, additional thoughts, experience or any kind of dialouge on such context is most welcome, please
contact info@markus-hill.com or Mary Daute (Asst. Manager). Phone: + 49 17 66 33 66 094
Markus Hill
Markus Hill (MSc in Economics) is an independent asset management consultant based in Frankfurt, Germany Professional
experience includes SEB Bank and Credit Suisse Asset Management. In addition, he worked as head of sales and PR for a
German fund boutique. Since 2005 he specialized in the management of mandates, sales, marketing, and PR (consulting,
"introducing"). Markus is also involved in selecting themes in the specialist areas of target funds with a multi-management
aspect, fund boutiques and mutual funds for institutional investors (product scouting, fund selection). Furthermore he is
actively engaged in cooperation with the market-leading Private Label Funds/Master KAG in Germany (Universal-
Investment) promoting the idea of independent asset management and was the Co-Initiator of the first all-German Consultant
survey in 2005 and the first "UCITS-survey" in 2003. Market entry into Germany, behavior of fund selectors and fund
providers in German asset management industry are often discussed by him, e.g. in his asset-management-publication MH-
Focus. Through many articles, columns and presentations (national and international) he has become a highly recognized
expert in the German asset management industry. "Industry multiplicator" is a term often used by journalists and clients to
describe his style and personality.
(Markus Hill/ MH Services assigned in the role of Media Partner for: UCITS Alternatives Conference in Zürich,
September 2011)
Markus Hill MH Services
email: info@markus-hill.com
website: www.markus-hill.com
phone: 0049 (0) 69 280 714 mobile: 0049 (0) 163 4616 179