Stocks and real-estate are facing the end of a nearly 20-year bull run and many family investors are ill-prepared for “tough times,” said Candice Beaumont, chairman of the Salsano Group Family Office. Beaumont, which oversees more than $1.5 billion in assets out of Miami, said rising interest rates are setting the stage for a longer correction in the areas of stocks, office real estate and private equity. “The worst is yet to come,” Beaumont said. “I think this is the beginning of a new paradigm and the beginning of a cycle where we are in a multi-year contraction.” Like many family offices, Beaumont said it has “significant” cash on hand to prepare for possible distress sales — particularly in real estate. He said the Panama-based Salsano Group has recently started getting calls from real estate owners in the US hoping to unload office or residential buildings at discounted prices. “A number of large legacy families with trophy properties, especially in New York City, are approaching us” to sell, she said. “They want to do it very quickly, but they are not in a crisis right now. But we think in the next few years, this trend will pick up and there will be a lot more opportunities. We want to be able to execute dry powder.” Family offices, like many large investors, are struggling to navigate the new financial landscape of higher interest rates. The Salsano Group, which has investments in Latin America, the US and Europe, was founded by Italian-born entrepreneur Sandro Salsano. Beaumont, a veteran at Lazard Freres (M&A) and Argonaut Capital (private equity), said many large investors continued to invest heavily in real estate and other assets without closely analyzing the risk-adjusted returns in the new rate environment . “I tell people to multi-[family] real-estate for 4% returns while you can get 4% or better cash, risk-free without any leverage,” he said. “We think the market has been a little slow to catch up.” Cash, Treasuries, Hedge funds, public equity and other investments. Yet its main focus is private equity, where it has achieved a 35% internal rate of return, Beaumont said. The group’s biggest project is a new free trade zone in Panama, which it development with co-investment from the sovereign wealth fund. “Panama is a very strategic region that connects the Atlantic and Pacific Oceans, and is a logistics hub for the US dollar economy,” she said. Beaumont also said that Salsano is looking for deals in Europe, where equity prices have fallen to attractive levels for private-private deals. that trades at a huge discount to its American peers. “It’s a $100 million company in Europe and if it was in the United States That would already be worth $2 billion,” he said. “Sometimes there’s a big arbitrage in Europe where things do business, especially on some of these smaller European stages.” Beaumont, who serves on several family office councils and advisory boards and was once a world-class tennis pro, said the number one priority for family offices in the current environment is to diversify, especially for new tech millionaires and billionaires. . “A lot of young families live in techno wealth,” she said. “They know the tech sector very well, so they tend to focus too much on one sector. But I think it is very important to have asset diversification. There is a famous allocation chart that shows which companies have been allocated every year in the past. Sectors performed better and every year it’s a different segment – one year it’s tech, one year it’s commodities, one year it’s distressed debt. It’s completely different every year. It’s the best example that family offices Why is there a need for diversification?