Impact investing has observed immense growth in the last decade. A wide variety of investors, including family offices, are showing interest in social impact investment. Dennis O’ Neill, president and board member of BioMedican, gave his insight into the history of family office creation, their impact on the global investing environment, their emerging interest in social impact investing, sustainability, and next-generation technologies investments. O’ Neill has vast experience speaking on venture capital, blockchain, private equity, and family offices. In this interview, he shared his opinion about investing trends in 2021 due to his investment banking expertise.
Family offices creation
Family offices are privately held companies that handle investment management for a wealthy family. In the last few decades, certain triggers made ultra-rich investors consider family offices and managing their own money. Family offices creation started “Back in 2007 and 2008, when Bernie Madoff, who was the president of Nasdaq and one of the largest fund managers in the world, got exposed as a fraud for running one of the largest Ponzi schemes in history that shocked the family offices are the ultra-rich investors,” says O’ Neill. In 2017 alone, the world observed a 35% increase in the creation of family offices that are the fastest-growing asset classes globally, managing $6 million in the capital. O’ Neill foresees generation to generation transfer of over $4 trillion wealth in upcoming years.
Family offices operate differently according to their geographical location and expertise. Family offices do not operate as a hedge fund or money manager, or mutual fund but on a relationship basis, and this way, they bypass the traditional brokerage firm and invent banks. “Unlike venture capital fund or private equity fund that is looking to maximize their profitability at all cost even at the detriment of the company, family offices tend to be much more friendly and long-term relationship,” says O’Neill.
Social impact investing
Social Impact investing is not a new concept in the world of family offices. Nearly a quarter of family offices are interested in social impact investing. Next-generation of family offices is more interested in social impact, alternative investments, next-generation technologies such as cryptocurrencies and blockchains, and sustainability investments such as environment, green energy, sustainable food, actionable education, and next-generation medicine and health.
Sustainability and sustainable food are one of the areas that are becoming of significant importance for family offices. Current farming techniques have failed to provide sustainable products. These farming models use natural resources, soil, and fertilizers and yet produce GMO products with no health benefit. Therefore, biosynthesis has replaced the current farming model. Biosynthesis is an advanced technique to produce bio-identical compounds that are 99% pharmaceutical grade and non-GMO.
The era of biosynthesis
The world observes an exploding craze of rare cannabinoids such as CBG, THCV, and CBN due to their potential health and medical benefit. BioMedican has developed a biosynthetic method to produce rare cannabinoids that utilize 90% less energy and natural resources. Bio-Kai, an extension to the BioMedican platform, targets the world’s strongest anti-oxidant astaxanthin with immense human health benefits and over a billion-dollar animal and fish feed market value. Family offices have an excellent opportunity to invest in more sustainable, environment-friendly, and advanced approaches like biosynthesis replacing synthetic products with bio-identical and non-GMO products.