The Miami-based Maldonado family emigrated to United States from Venezuela over a decade ago. Alexander Degwitz, family council chair who heads the family office, GEMIS, talks about the challenges of making sure the family office serves the needs of the next generation:
Planning for the future
Our parents didn’t plan beyond our generation. They told us, ‘This is only going to work for you guys, it’s not going to work for your kids, so you’ve got to figure it out from there.’
Ten years after we engaged a consultant to help us, having migrated to the United States in a substantial way, not all of us have grown in the same direction; not all of us are so interested in owning a family business together. The motivation and the predicament we were in 10 years ago is very different than the predicament we are in now.
We’re going through a full revision of what we want to be. We are kind of reevaluating the motivation, the purpose, the legacy, the needs, and trying to understand better if what has taken us this far is what we need for the next 10 years.
Engaging the rising generation
We see that one of our weaknesses is that we have not been successful in engaging the generation that’s going to take over after ours. We’re not getting enough motivation from the young ones to participate.
We’ve worked with a great advisor who told us to consider that there are enterprises that every year have owners meetings where they decide if they want to continue being partners. If the answer is no, then what needs to change for you to continue? If those changes are not viable, why should you stay together as partners?
It has motivated us to rethink and revisit to decide what the family business is for, and what is the role of the family office. Part of that analysis has brought us to the conclusion that the family office has a fundamental role in educating the new generations. We understand that conceptually, but we haven’t yet figured out how to structure that educational role.
Preserving the legacy
What you inherit in legacy is much more important than what you inherit in cash.
We have made a website dedicated to preserving our family’s legacy (maldonadofamily.com). It includes research of over 3,000 digitized documents that go back as far as the turn of the century with my great-grandfather and the letters he would write to his wife describing his challenges. It’s quite revealing, and it’s good for the younger generation, including my own, to see the type of hardships that they had to go through – which kind of makes ours look tedious and irrelevant. It gives a lot more meaning to what we have, how we have it and what we have it for.
Contemplating reinvention
In our case, there is no exit strategy in our trust documents and bylaws. ‘You can exit, but don’t expect to take anything with you’ has been more or less the motto. As a consequence, we started demonizing our trust – some saw it becoming an obstacle to people’s evolution. This is very recent and very far from being resolved, but we are considering that maybe everybody needs to separate so we can reunite under a new idea of what unity means.
For us, the family office is in the end a vehicle of family cohesion more than our financial asset management platform. Our next challenge is to see how we turn our family office into a vehicle to educate family members to be responsible owners and better understand their purpose, a feat often best achieved with support of a family.