The uncertainty surrounding the coronavirus named Covid-19 is forcing action by governments, businesses and large swaths of the population. It is also prompting strategic and tactical action by many of the world’s super-rich with a net worth of $500 million or more.
“We’re seeing a large percentage of wealthy families take action to protect themselves and also their businesses and the people who work for them," said Cliff Oberlin, chairman and CEO Oberlin Wealth Partners. "A greater reliance on private jets, the ability to have their families stay at possibly ‘safer locations’ and preferential access to the best medical resources are all approaches they are using to protect themselves. However, their actions usually don’t stop with their families. They are also—because of their concern for the people that work for them—are taking steps to keep them well informed and provide them with additional medical and other resources.”
One of the biggest considerations for the super-rich and most everyone else is having accurate information. “Though there’s an overwhelming amount of information available to the public, there is little effort to render it relevant and actionable, especially around how to avoid contracting the virus from family members and co-workers.” said Dr. Daniel Carlin, founder and CEO of WorldClinic. “Behind the official news, what we are witnessing is mostly local and inconsistent attempts at quarantining people coming from an infected area. We are also seeing panic buying of everything from toilet paper to bottled water. On the business front, our wealthy clients see through this fog. They are highly motivated to protect their health and assets and want both the latest medical information as well as credible predictions of Covid-19’s impact on local regions and industries.”
For many people, Covid-19 is not only a major health emergency, it is also a financial emergency as well. The disruptive economic impact of the disease is clearly increasing in our interconnected world economy. This is resulting in the super-rich and the professionals they engage with to both protect their business interests and their personal wealth—and, in some cases, use the current circumstances as an opportunity to profit.
“Many family offices have long been hedging their investment portfolios against increased volatility," said Peter Sasaki, managing member of SDS Family Office and co-author of "Maximizing Your Single-Family Office Leveraging The Power of Outsourcing and Stress Testing." "A variety of innovative approaches are being used that cover both their liquid investment portfolios and their extensive venture and private equity holdings. Some family offices are increasing their use of safe haven investments such as precious metals and occasionally cryptocurrencies. At the same time, a large number of family offices are benefitting from the market volatility in their hedge fund portfolios and some are using the market downturns to—in their view—pick up solid investments at temporarily depressed prices.”
Generally speaking, what is clear is that the super-rich are very attentive to Covid-19 and are preparing for the possibility of a severe pandemic. They are implementing ways to mitigate the impact of the disease on their families and their businesses, including their employees. The super-rich are also focusing on ways to protect their wealth, if not substantially grow it at this time.
Russ Alan Prince, president of R.A. Prince & Associates, is a consultant to family offices, the ultra-wealthy and select professionals.