A Germany-headquartered multi-family office, which won a capital market licence earlier this year, talks about how UHNW investors can and should work with such firms to tap into expertise and gain insights.

While enthusiasm for “direct investing” (cutting out the fund route) hasn’t fallen off a cliff since rates rose more than two years ago, there appears to be renewed appetite for working with experts via pooled vehicles such as funds instead of trying to find investment gems all by oneself.

At Hamburg-headquartered multi-family office Lennertz & Co, the case for providing expertise to other family offices, and other investors remains as solid a proposition as ever, it told this publication recently.

“If you are starting out and have limited experience [in private markets] then every investment opportunity sounds very good, but you need experience to differentiate between good teams and bad teams as well as good and bad deals, get access to the top GPs for an above-average performance compared to the market,” Oksana Tiedt, head of funds at Lennertz & Co, said. 

The best-performing funds tend to be off-limits because they are already locked up and filled by the largest institutions, especially in the US venture markets. This means that access to top-quality investments can be challenging or take a very long time to develop for a swathe of the wealth sector, she continued. 

“The Lennertz & Co team has a lot of experience from their backgrounds. We have been in the market for a long time and we have a big network, which is key,” she said. Clients can leverage that network to help with access and understanding of where the new opportunities are. “We co-invest, we do our own deals, create access to GPs via feeders and offer fund of funds for those who seek a diversified portfolio. Funds also see us as a key source of information.”

“We hustle, we develop long-term relationships, we share networks, and we tell our story,” she said. 

Tiedt, originally from Ukraine and a German national in the meantime, has worked in the US and London in various roles, including Bain Capital and Goldman Sachs. After that she was running a fund of funds business in the private equity space for a German bank. She has been at Lennertz & Co for seven years. 

Lennertz & Co, founded in April 2015, has created an alternative investments platform, for asset classes such as PE, real estate, and foremost venture capital, etc. The family office started one of the first blockchain venture fund of funds in 2019.

In late February, the MFO appointed Neil Steinberg as chief commercial officer, who focuses on the Germany, Austria and Switzerland (“DACH”) market. He previously worked for 15 years at NetJets – the private jets business – as regional sales director for the DACH region.

Earlier in February, Lennertz & Co was granted a licence to operate as a capital management company by German regulators. It also appointed Christian Piper to join the management board of Lennertz & Co Capital GmbH. Its supervisory board also consists of Prof Dr Klaus Trützschler (chairman), Prof Dr Klaus Wucherer (former board member at Siemens, SB Infineon, and SAP), and Prof Dr Heinrich von Pierer (former CEO Siemens, SB Deutsche Bank and Berenberg Bank).

The alternative team
Lennertz & Co’s alternative investments team has 15 people, and the platform hosts about €900 million of assets. (The MFO doesn’t disclose assets under custody/advisory of its family office business.)

“The fastest growing asset class is venture capital and its market which is driven by the emergence of AI technology and blockchain innovations, in tandem with increased infrastructure development, broader adoption, and agile investment strategies that provide overall liquidity to the market. Private debt and private equity are slower currently, given the macro uncertainty and low liquidity,” Tiedt said. 

The changed economic environment since rates rose more than two years ago has had an impact on what people want to invest in, she said. 

“The deals driven by access to cheap financing and very high valuations are no longer attractive to private equity players. However, the private equity playbook is very broad, and we will likely see more complex transactions with a high component of operational work. Our recommendation is always to continue investing across the alternatives landscape and focus on finding the best teams and best strategies that adapt to the macro conditions,” she continued.   

Lennertz & Co charges an annual management and performance fee. Tiedt said the fee levels are “in line with the global standard in the alternative investment sector.”

“As a result, our family office clients and investors gain access to the top tier of private equity and venture capital funds, thereby achieving outstanding returns on their investments. They also benefit from top-class PE/VC reporting from our in-house fund administration and access to our PE/VC investment team, which serves as a sparring partner for all PE/VC-related topics,” Tiedt added.