Saudi Arabia: An Interview with Sally Tennant
Acorn founder Sally Tennant was interviewed by journalist Jason Mitchell for PCD Club’s digital magazine.
Maraya (meaning "reflection" in Arabic) - a concert venue, event space and the world's largest mirrored building, located in the desert town of AlUla, Saudi Arabia.
“Saudi’s next generation are becoming more involved in their single-family offices (SFO) and have inherited or have influence over the assets they will inherit,” she says.
“Many want to do something different from their parents, take a more professional approach, and take on greater investment risk - in other words, it is not all about capital preservation. They are also looking for an investment strategy that has impact on causes that they care about such as climate change. They would like something more bespoke”.
“Some are super busy entrepreneurs who don’t want the hassle or don’t have the expertise and bandwidth to manage another business - an SFO. They want to outsource it to an independent private office to run their family office for them. They like it because it is cost effective and, unlike most multi-family offices and wealth managers, there are no conflicts.”
“Acorn does several things. We can help someone at the beginning of their journey, who wants to set up their family office, to think through how they need that office to function; what is the purpose of their wealth? What is the best structure? What resources should be in-house and what should be outsourced? How should decisions be taken and what does good governance look like?
What we have also done for established family offices in the region – including in Saudi – is to review an existing set up and benchmark it against best practice. It is hard for SFOs to stay up to date with the latest developments given the small teams they have and how opaque they are. We are like non-executive directors; experienced practitioners, sharing knowledge and expertise, from investment strategy, to fee structures and decision-making protocols. We are discreet, collaborative, and independent. We do not have any in-house investment products clouding our judgement.
“Change, such as the transition of wealth from one generation to the next, the retirement of key staff or a change of trustees can be stressful for both the family and the SFO team.
Our clients like to work with an independent adviser who helps them navigate the transition and identify areas for improvement. An SFO is, at the end of the day, another business that needs investment, management, and the ability to adapt to the changing environment. Our clients like the fact that not only do we understand the complexities of managing substantial wealth, but that we are entrepreneurs who understand businesses and family dynamics.
With rising inflation and the scarcity of experienced family office CEO/CIOs, many of them are reviewing their existing business models and outsourcing more functions. One needs several billions to be able to manage everything in-house. In a nutshell, families with substantial wealth and an SFO reap huge benefits from someone sitting on their side of the table - not on the opposite side and pushing product or working in a silo. They need somebody who’s got their back and understands the whole ecosystem.
“What we have seen in the region is a great willingness for SFOs to professionalise their operations and we help people on that journey. What I am particularly impressed with Saudi Arabians is their great sense of community, family and philanthropy.
I am also impressed with how well educated and diverse the workforce is. We are seeing an increase in enquiries from Saudi SFOs for strategy and change management support. During the Covid pandemic, UHNW individuals realised that they had to address succession and bring on the next generation. In addition, because they were better off, they wanted to do more with their philanthropy and increase their international footprint, particularly with regards to impact investing, because the next generation are passionate about climate change, and improving the environment.”