Isso sim que é longo prazo!

Family offices need to bet on the risks and rewards of investments over the next 100 years

What would a modern-day Sir Thomas Grosvenor invest in today?
by: Judith Evans

 

Sir Thomas Grosvenor’s marriage to Mary Davies in 1677 may not have been a case of true romance.

For one thing, the bride was 12 and remained in the care of a guardian aunt for years after her wedding. And for another, there were extensive negotiations around the marriage — all financial, including £5,000 to be repaid to the father of the bride’s previous fiancé, who had been unable to meet his side of that (also financial) bargain.

The young Miss Davies brought a dowry of 500 acres of swamp, meadow and pasture to the west of the City of London; that land, most of which Sir Thomas’s family still owns, is now in the wealthy areas of Mayfair and Belgravia, and sits at the heart of what has become an £11.8bn global property portfolio.

Viewed as a long-term investor rather than a suitor, Sir Thomas appears to have been an outstanding one, even if he did not survive long enough to realise the fruits of his acquisition. The English aristocrat and his descendants identified an area that was set to benefit from the expansion of a global capital city and developed it as a luxury residential and office district. This in turn acted as a springboard for investments in other cities and industries.

Which begs the question: what would a modern-day Sir Thomas invest in today? This is an especially important issue for family offices, which, if they are doing their jobs well, think not just about next year’s returns but about the risks and rewards of the next century or three.

Hans Rosling, the Swedish statistician, has suggested that beachfront property in Somalia might be a good bet (though he has not mentioned whether he takes his own investment advice).

His rationale is interesting. It relates to a predicted shift in global trade linked to population trends. The world population is forecast to grow by 4bn by 2100; of that number, a third will be in cities, a third in Asia and the rest in Africa. This in turn will contribute to much more rapid economic growth outside the developed west; members of those fast-expanding African and Asian middle classes will be looking for somewhere to take holidays and where better than the sandy beaches of Somalia?

The Grosvenor estate has so far stayed clear of the troubled Horn of Africa state, but it has made its own modest bet on the future with a move into renewable energy.

This is an area close to the heart of the present Duke of Westminster, Hugh Grosvenor, who inherited the title after his father’s death in August. He has spent this year working at Bio-Bean, a company (not part of the estate) that makes biofuel from recycled ground coffee.

Clean energy may turn out to be a footnote in the long history of the Grosvenor estate, but if the new duke is to safeguard his family fortune for another 300 years he will need to keep a close eye on what wealth managers like to call “global megatrends”, such as urbanisation, ageing populations and the shift from west to east.

As for Mary Davies, her role in the estate’s history was crucial, but brief.

Historians report that after her marriage to Sir Thomas ended with his death, she entered into what is thought to have been a forced or sham marriage with a man keen to claim her property. Her family secured an annulment.

She was judged to be insane and placed in the care of a guardian, losing control of her income and estate for the last 25 years of her life.

It is not just canny investment decisions that have kept the Grosvenor estate intact.

 

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