Diversifying a Family Office Beyond Borders

Client case studies Client Profile

Type: Multi-generational family office

Net Worth: R220 million (USD ~11.6 million)

Primary Location: Cape Town, South Africa

Core Issue: 85% of assets in local equities & property, heavily exposed to South African currency and policy risk

ChallengeSouth Africa’s local equity market has historically underperformed developed markets over long periods, with higher volatility. Additionally, the rand (ZAR) has depreciated by an average of ~5.5% annually against the US dollar over the past decade. This left the family office’s portfolio exposed to both concentrated equity risk and significant currency erosion.

Strategy Implemented

Global Asset Allocation Shifted from an 85% local / 15% offshore allocation to a 60% global / 40% local allocation over 18 months.

Offshore Structures - Established a Guernsey-based investment holding company for tax-efficient international holdings. - Used Section 10(1)(o)(ii) allowances for annual offshore investment without triggering excess tax liabilities.

Alternative Investments Allocated 15% of global assets into private equity, hedge funds, and infrastructure (via feeder funds) with USD denomination.

Risk Management Layered in downside protection via currency hedging (USD/ZAR forward contracts) and selective equity put options.

Results (3-Year Period)

Portfolio annualised return: 12.0% vs prior 5-year average of 7.4%

Volatility reduced by 30% (standard deviation from 15.2% → 10.6%)

Rand exposure reduced from 85% → 38% of portfolio value

Liquidity profile improved — 70% of holdings now redeemable within 10 days