"We have to look beyond the horizon": how geopolitics has affected the capitals of super-rich families

The world's richest people are adjusting their investments in response to rising geopolitical tensions, largely driven by Donald Trump's attempts to reshape the world order, Bloomberg writes. The capture of Venezuelan leader Nicolas Maduro, attempts to take control of Greenland and the war against Iran have caused a sharp rise in commodity prices. Here are a couple of examples of how wealthy investors are trying to capitalize on this:

- Colombia's richest billionaire, Jaime Gilinsky, and his son invested $107 million in independent Latin American oil and gas company GeoPark Ltd. in March and have since increased their stakes several times. Gilinsky sees investing in GeoPark as a way to enter Venezuela's recovering oil market, Bloomberg notes;

- the family office of heirs to Swedish oil and mining magnate Adolf Lundin spent nearly $29.5 million in March to build up positions in Vancouver copper and diamond companies.

In turn, the families' investment structures, which are shareholders in Italian automaker Ferrari and U.S. media conglomerate Cox Enterprises, have invested in defense startups in recent months, including Hermeus Corp. which is developing the fastest unmanned jet in history for the U.S. Department of Defense.

According to Bloomberg's Billionaires Index, the combined fortune of these four families is about $90 billion, and their capital history goes back as far as 1898.

Other wealthy investors reallocating their investments include the billionaire family behind Porsche and Volkswagen. Last year, it abandoned the principle of funding only civilian products and created a platform for investing in defense startups. Overall, the agency estimates that global political uncertainty has helped boost the combined wealth of individuals and families with stakes in publicly traded defense companies by more than $20 billion this year.

One in five ultra-rich investors see geopolitics as the top risk, a JPMorgan Chase & Co. survey released in February showed.

"We are operating in an era where geopolitical and geo-economic factors are more important than ever for wealth management," said Sarah Macedo, managing director of Emissary Partners, a UK-based asset management consultancy for ultra-wealthy individuals and their investment companies. - Families need to look over the horizon, understanding how decisions are made at the highest levels."

Some families are also looking to mitigate the risks associated with an increasingly polarized world by venturing into new territories. For example, the family office of Belgian flooring manufacturer Philip Balken expanded its U.S. private equity team this year. A September report by KPMG and recruiting firm Agreus Group, based on a survey of 585 family office employees, found that nearly half of their employers now operate in more than one market. In 2023, that number was about one-third.

This article was AI-translated and verified by a human editor