The CEO of Invext, Santiago Royo, analyses the current economic landscape and how it will affect the sector of family office which Invext is included in. At the moment, the executive is committed to “being prudent and analytical with the investments being made,” but also to being attentive to the “new opportunities” that will arise in a context as unusual as the current one.
Invext, the Royo family's investment fund, is focused on several sectors, including private equity, real estate and financial. Something that, for Royo, is “essential” for diversifying risks and for all of them to generate recurring income, which is one of the main objectives of this family office where one of its main investments is the international group RGIB.
- How are you approaching this new phase at the helm of Invext?
It is clear that in times of uncertainty, we must be much more diligent with investment analysis and with the risk analyses of each of the investments. In this regard, we should favour liquid and income-generating assets. It is also a time of great opportunities, during which assets that have not been on the market will emerge and become accessible.
Furthermore, cash will be fundamental, and all decisions should have a predictable cash horizon of 12 to 18 months.
- You have developed your professional expertise within a large corporate group like INVEXT, what knowledge and values would you highlight from your experience there?
INVEXT is a large business group where I have been able to develop experience in many fields. Among these, I would highlight international corporate operations within the subsidiary RGIB, such as the negotiation of the acquisition of our subsidiary in Poland, ELITA, the negotiation for the entry of the private equity fund HIG into RGIB's shareholding, within the real estate sector, purchase and sale operations with international investment funds, as well as participation in SOCIMIs (Listed Real Estate Investment Companies).
The experience of reaching agreements with people from different cultures was of great use. Being part of a structured and professionalised group across all departments means that decisions have to be worked on in many areas; from integrating many people into each of the decisions so that they make sense at a global level.
- Where is Invext heading right now? What are its most immediate objectives?
The idea that we as a family have of Invext is that of a family office which aims to diversify its businesses across various sectors, mainly private equity, real estate, and financial, to avoid dependency on any one of them. Right now, we are also heavily favouring investment in exponential companies, where Invext had not previously been involved. To this end, we have allocated a significant budget to this asset class for the next five years. Therefore, our objectives include the diversification of assets, ensuring that they all generate recurring income. This is what makes diversification so important for Invext. We expect to have one-third weighting in each of the legs we have defined for ourselves: private equity, real estate and financial.
- The situation we have experienced, and are experiencing, both nationally and internationally, has brought about a paradigm shift. In what way has it affected or do you believe it will affect the market for family office?
Family businesses have become much more professional in recent years, both in terms of investments and outside their core business. This situation will lead to an acceleration in the professionalisation of family office.
- In that sense, what are your feelings and perspectives on this anomalous economic period we are experiencing?
Interesting opportunities will arise, but we must be very demanding with the analysis of divestments and investments. We must be cautious, but at the same time have the courage to invest; I believe that success lies in that balance. Furthermore, not being stagnant allows the economy to flow and helps the rest of the economic entities to get the economic system’s wheel turning again.
- ¿Cómo ves el futuro de los family office In the medium and long term? What do you think will be the main trends in this sector?
los family office They have been established for a long time in more Anglo-Saxon economies, in Spain's case, we have had a period where they have begun to be formalised and developed. I believe this is a trend that will continue in the future.
- A tip for anyone starting their foray into the sector of family office.
Read plenty of books on the subject and talk to lots of people who set out on this path a long time ago, because the problems and questions faced by families new to FO are, 90%, the same for all of them.
I always say that what helped us the most was talking to the 6 or 7 family office that we knew and to tell us about their project. It's very difficult for families to open up, but they don't find it as complicated to talk about their industrial business, and the key is to treat family office as an “industrial” investment. Because it doesn't stop being a business and it has to be treated as such.
