Erstgespräch
Interview with e-fundresearch.com | April 7, 2023
Georg Höhne has been working as managing partner for the Viennese multi-family office “KRONOS Advisory” for almost a year. In this exclusive interview with e-fundresearch.com, the experienced banker talks about his move into the multi-family office world, the challenges of the current market environment, and the mood among clients.
Motivation and Differentiation
Georg Höhne: Since I entered the banking world in 2008, the conditions have steadily deteriorated. Overregulation and complicated advisory structures have made true customer-focused advice almost impossible.
To offer clients the best solutions, I left the banking sector and joined KRONOS Advisory, one of the most important multi-family offices in the DACH region. We don’t have our own asset management or proprietary products. Thanks to this independence, we can reduce investment costs and provide truly objective advice—even for non-bankable products.
Market Turbulence in 2022
2022 was a challenging year. Inflation made preserving real wealth nearly impossible, and investors suffered losses in both bonds and equities. At KRONOS Advisory, we focus on clients’ overall asset structure across banks and emphasize diversification, including alternative investments.
In such difficult years, we as a multi-family office must above all be available at all times and take sufficient time to address the fears and concerns of our clients.
2023 Outlook and Market Risks
While markets started strong in 2023, we remain cautious. Recent banking crises and systemic issues highlight ongoing risks:
- Rising interest rates devalue banks’ bond portfolios, weakening their equity base.
- The Credit Suisse rescue shows that bail-in instruments carry real risks, even for private investors.
- Continued outflows from smaller banks could trigger chain reactions.
Other concerns include persistent inflation, corporate earnings disappointments, and geopolitical tension. A peace deal in Ukraine would be the biggest short-term positive—but that’s unlikely at present.
Real Estate Outlook
Rising interest rates, construction costs, and stricter bank requirements are cooling real estate markets. Real estate is no longer a guaranteed success and must be carefully evaluated.
Fund Selection Approach
When actively managed funds outperform after costs, we welcome them. But in equities, passive funds are often more effective and cheaper—so we favor them. In bond markets, good active management can add value. We also avoid layered fees when proprietary funds are involved.
Client Requirements
From around €1 million in liquid assets, our advisory fees are usually covered by the savings we help clients achieve. It’s important to us that hiring KRONOS Advisory creates no additional net cost for the client.
Conclusion
e-fundresearch.com: Thank you for the interview, Mr. Höhne!