On its 30th anniversary, Clerville IM looks back on its evolution from single to multi family office in 2007. Jean-Marc Spitalier, reveals the key principles guiding Clerville's strategy today
Clerville IM celebrates its 30th anniversary, with a move from single family office to multi family office in 2007, with what DNA?
Our DNA, from the outset, has always been our independence of choice in the interests of our families. For example, we applied the ban on retrocessions even before MiFID II. Alignment of interests is also an original principle, since the founding family, other families and partners are all invested in the same products. Our specialization in financial management is not surprising given our initial establishment in the UK.
Is the external perception of a very market-oriented MFO, favoring liquid or semi-liquid solutions justified today, especially for a team that also has great alternative management skills at its core?
Markets have become more complicated, and 60/40 approaches don't work like they used to. We've experienced a one-off inflation surge, which has led to negative correlations across most asset classes. We recognized this risk and invested 100% of our bond portfolio in semi-liquid variable-rate products. Over the 2022-2023 period, we outperformed investment-grade bonds by around 25%. This year, we are again recording a mid-year outperformance of 10%. This is an illustration of what we aim to achieve: avoid unnecessary market risks while trying to win every year. As for illiquidity, we use it only when necessary, and mostly in credit products. Fees in illiquid are very high, particularly in private equity (between 3% and 6% per annum), and IRR (Internal Rate of Return) calculations don't seem right to us, as they ignore the relative immobilization of capital during the call period.
.We have bolstered our in-house alternative management capabilities with the arrival of the Fauchier partners team, enabling us to selectively increase our access to so-called "market neutral" or "long-short" strategies, but also to find highly effective long-volatility protection funds.
How would you characterize Clerville's singularity in research and selection?
Pascal and I have a combined 45 years of expertise in complex fund selection on the trading floor, supported by three senior analysts and the experience of five other partners with complementary backgrounds in international banks. We understand market risks, managers' strategies and the risks they take. Our due diligence approach is permanent and independent, we leave freely whenever we wish because we have no economic interests with them.
So you work with other MFOs on wealth structuring?
All 7 partners are wealth structuring practitioners and can manage projects. We decided not to have dedicated legal or tax resources, as these matters are very much alive and increasingly complex given the internationalization of families. We therefore call on external firms, chosen according to each project/jurisdiction. For certain families, we collaborate with MFOs who mandate us for management.
What are the major challenges today that focus your attention in the pursuit of excellence at Clerville?
The weight of regulations, the obligation to be regulated in the Eurozone and the UK, and even in Switzerland to cover Europe, increases our costs and mobilizes our resources. However, we have succeeded in maximizing group procedures and automating numerous controls, thanks to our highly advanced internal risk management and regulatory information system. In the end, having made the choice of specialization, we are essentially concerned with the management of our families' finances, avoiding any risk of dispersion, and excellence can only be achieved by remaining a team of co-opted, disciplined, independent and aligned professionals.
This post was translated from the original French.