The story of a single family office and the rain

This is a story about wealth and prosperity but of dreams and conspiracy too. Who said that blood is thicker than water?

Wealth isn’t just about money. It has to do with happiness and health, with flourishing in the broader sense. 

That’s what Mohammed’s family got wrong. After years of sacrifice, of living a moderate life that took their business to the top, they almost destroyed it all. 

Hold on to your hats. This is a riveting story.

Mohammed and the rain

Mohammed doesn’t like rainy days. But not even the most furious rain in Luxembourg city could change his mind. He knows he made the right decision. He feels the fortune his family amassed over the last 80 years is now safe, finally, after all the things they have gone through.

But, despite two years in this corner of Europe, he still doesn’t like the rain. How could that be, when the number of times he has seen the soil of the village where he was born water-soaked can be counted with his fingertips? 

When he took up the responsibility of managing the family’s wealth he didn’t feel at ease. Seated on the black-leathered chair and looking through the window, he recalled that summer, six years ago. 

– “Paris is overrated,” he said, laconically, to the journalist, when she asked him why he left the city of light. – “I didn’t leave Paris, it left me,” he added, “and Luxembourg, discreetly, gave me the security and trust I was looking for.

The old Duchy is, by no means, the place where he once imagined to live. Now the family office he’s responsible for, “Liwa Family Office” occupies the third floor in one of the tallest buildings in the city centre.

– “I prefer it here. I’ve never been a fan of financial districts.”  

Family offices have been multiplying rapidly in the last two decades and valuations of technology companies have a lot to do with that.

The Rockefeller family is among the most famous to use this type of structure to manage their affairs and control their wealth.

I haven’t managed to fully escape Paris, Madam. I go there once a month, to take a look at our real- estate investments first hand, and to meet my advisor at the same coffee shop, near la Rue de Villiers. They prepare the best crème brûlé I’ve tried so far.

When he first came to PwC, he was troubled. The biggest family property, a beautiful hotel on the French Riviera near Cap d’Ail, was under scrutiny because of mismanagement. Apart from “gaining” the shameful tax-defaulter status, the family was also being accused of almost atrocious environmental management.

Honestly, it was the first time I thought of the environment aspect. Not complying with French Tax Law was a bad thing, but losing our reputation on corporate responsibility matters was devastating. Thanks to PwC and a lot of work, we are now fully compliant, but our image is yet to get back to what it once was.  


Being a family isn’t only about blood

Grabbing a second cup of dark coffee, the journalist told Mohammed, “Sir, you mentioned on the phone that the Cap d’Ail affair was only the tip of the iceberg. Could you shed some light on that matter?”

Mohammed cleared his throat. His voice became more serious. The almost 40-year-old businessman, born somewhere around the Liwa desert, in the United Arab Emirates, knew that, when it comes to money issues that involve the family, vagueness is an evil stakeholder. He started answering the question via one of his favorite authors, John Updike, the American novelist. 

Vagueness and procrastination are ever a comfort to the frail in spirit,” he said to the journalist. “If I would have considered this before.”

Then, he continued,

… by the time I took over the business, my family had some serious real-estate investments, the hotel in France being one, and other houses in Spain. We were also betting on the success of promising Fintech startups. It was the beginning of the Fintech boom, you remember, the apocalyptic new idea that was bound to kill banks.


That was the first time I came to Luxembourg, to open a standard holding company because our former financial advisor, someone I prefer not to mention, suggested it to us. It made sense, after all. Living our Rockefeller moment required the reduction of risk, an understandable approach to taxation and a structure that allowed the ownership and control of our different companies.


I don’t like the rain. It is like a continuous noise dropping from the sky making me anxious, so I didn’t stay in Luxembourg and I settled down in Spain. We then asked my cousin to be responsible for the French investments. We trusted him. Ibrahim is stillI guess such a charming man! But being a family isn’t only about blood, but respect. I just hope he is fine, wherever he has gone.

Mohammed stopped talking and called his assistant. “Could you please bring the blue folder?” he said kindly. Once he got it, he opened it and showed the journalist its yellowing pages. He said:

This smell is pure nostalgia to me, but it also keeps certain moments silently that were embarrassing to us but we should never forget.

Indeed, the folder was a collection of newspaper clippings—bad and good—from UAE and France media. Pointing to a picture, he continued.

Ibrahim’s childhood was tough, more than mine. Since he was a child, he was passionate about the stars, and going to space. And so he did.

This is when the story takes a turn for the strange.  


The holy dashboard and a one-way ticket to the stars 

We went through a lot,” recalled Mohammed. “In my culture, being honorable is a matter of living or dying. We needed to clean up our image as quickly as possible.” 

A large screen on one of the office’s white walls suddenly turned on, surprising the journalist with its impressive colourful charts. 

With a side smile, Mohammed told her:

Yes, Madam, I embraced the so-called platform economy too. What can I say? Bad monitoring of our portfolio and unclear reporting triggered a big chunk of the problems I mentioned before. But my family’s lack of interest was, by far, the main cause.

While playing with the interactive charts, he added:

In Paris, in an informal meeting with the PwC Luxembourg team and their French colleagues that now help us with French Tax compliance matters, I discovered other possibilities for our Luxembourg holding company. So they put me in contact with people there, well, here —now you’re here Mohammed!—and that’s the beginning of my second attempt to live in this rainy place.

He looked at the dashboard, fixedly, with tired eyes, and replied:

This clarity, knowing what we’re doing with our wealth, having Alain and Gwen on the other side of the phone every time I need their support. Although I never call them on weekends.

Turning his head around, Mohammed looked at the journalist. “Have you brought your umbrella, by the way?

After the PwC Luxembourg team took over Mohammed’s family wealth management, they proposed:

(1) to carry out a sanity check of the whole investment structure;

(2) to reorganise the holding structure to answer Mohammed’s family objectives;

(3) to take advantage of new technologies. The result was the development of a dashboard-based reporting tool to maximise control of the family’s wealth;

(4) New approaches to investment, including responsible investment.

 – Mohammed, sorry, sir, may I call you Mohammed, by the way? 


 – Yes, of course.


 – My readers will be eager to know what happened to Ibrahim. Is that possible?


 – Well, Madam, he went, literally, to the stars. It sounds crazy, but nonsense is what helps this world makes sense. It would be so bland otherwise. Because the family had investments in technology companies, Ibrahim met one of those startups interested in developing affordable spacecrafts, similar to what SpaceX does. I’m sure you’ve heard about it.

He transferred the responsibility of managing the hotel to his two younger siblings, without informing anyone. Few people really cared. As long as some family members had what they felt they needed to live the Rockefeller life, all the rest was fine. And the siblings did what they did, becoming lawless while thinking that regulators are blind.

Suddenly, Mohammed’s mind turned blue, the type of blue that brings back memories and the melancholy mood. Then, he picked up the thread of his spoken memories. 

Mohammed turns momentarily pensive and sighs. 

– By the time we knew about the taxation issue in France, at least one fourth of our real estate investments were gone. And it doesn’t stop there, Madam. Ibrahim became a business angel to this crazy space startup, with only one caveat, that he be the first to test the vehicle, or the rocket, or whatever they were building!


 – What happened then? asked the journalist, leaning in fascinated.


 – Well remember, all of this happened over a period of two years, before I decided to take the reins of our business.


 – Yes, yes but what happened to Ibrahim?, she asked again, wide-eyed. 

Mohammed leaned back for the oft-delivered punch line:

 – Oh, Ibrahim took off in that rocket. I haven’t seen him since. But I still consider him my best friend.

The window of my single family office 

Mohammed started to laugh as the journalist looked at him with wide eyes. 

– I can’t help but laugh sometimes, because when you think about it, our family finances are better off with a dashboard. But ultimately, Ibrahim got his too,” Mohammed said to the journalist as they both looked at a small replica of a rocket on his desk. 

This single family office, (that’s what it’s called), was the best advice PwC Luxembourg could have given me. These private equity and real estate professionals and my talented assistant who carries the sun of Italy with him couldn’t be more helpful.

Laughing, he added,

My day happens in four languages, including Arabic. Our real estate investments have increased. they are more diverse now and we’re also investing in Luxembourg. And I finally managed to engage with more committed family members. But the one I would have loved to have onboard is missing.

As PwC Luxembourg advised, the implementation of an SFO is suitable for Mohammed’s family wealth management. This simple vehicle is flexible, precisely what they need at that moment, and the type of governance it requires suits the family’s needs better. Later on, they could opt for a more sophisticated vehicle, an investment fund for instance.

Prosperity, Madam, isn’t only about money. It has to do with health, with finding the sense of living, and  feeling cared for. I’m glad to be a privileged human, to have the chance to invest in my daughter’s future, the way she deserves. But I shouldn’t forget to give her what matters the most, time and memories together.

The journalist, moved, asked him.

 – Could I ask you one more question?


 – Yes, go ahead.


 – What’s the first thing you do on a rainy day? 


 – I talk to Ibrahim about how much I hate it. But I don’t want to escape from it the same way he did.  I just think of the desert. And together we smile.

Types of family office Strengths Points of attention
Single family office

A SFO is a family office servicing one family only
• Not necessarily regulated under Luxembourg law

• Entirely dedicated to one family

• Close relationship with the family

• High level of customization

• Greater independence

• Better controlled
• Higher risk of influence compensated by appropriate governance

• Less personnel: risk regarding continuity

• Greater attention should be given to regulatory and tax issues required
Multi-family office

A MFO is usually an independent organisation, which supports multiple families to manage their wealth
• Regulated entity under the Luxembourg law of 21st December 2012 used to taking care of families’ wealth and consequently offers professionalism + attracts talented personnel

• Costs of working with a MFO are generally lower than those running a SFO: economies of scale

• Easier to end mandate in case of issue more resources
• Less dedicated to the family

• Eventual conflict of interest between families

• Greater turnover
What we think
Alain Meunier, Tax Partner and Wealth Management Leader at PwC Luxembourg

When families come to us, we have the full capacity and necessary experience to assist them from design to implementation of their dedicated family office solution taking into consideration their history and needs, notably in terms of governance.

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