With the presidential election rapidly approaching, we asked Marcus Baram to speak with prominent family offices about the potential impact of a Trump or Harris administration. The policies of each candidate could significantly shape the landscape for family offices and wealthy investors, especially regarding taxes, regulation and the broader investment climate. Read on to learn how families are navigating this uncertain environment.
In an exclusive interview, Andrew Cohen spoke with Princess Jahnavi Kumari Mewar, a member of India’s historic Mewar royal family, about her life’s work in rallying family offices worldwide to address humanity’s most pressing needs.
As always, we appreciate any comments, ideas and insights that would make this newsletter more useful. I look forward to growing this family office community with your help. Please email me at [email protected].
HANDPICKED: How a Trump or Harris administration could affect family offices
By MARCUS BARAM
The U.S. presidential election is in its final weeks, and the impact of either candidate’s policies could be very different on family offices and wealthy investors when it comes to taxes, regulation, and the general investing climate, say analysts.
As the race tightens, more high-net-worth Americans are going public with their political preferences. Billionaires Elon Musk, Bill Ackman, Stephen Schwarzman and many leading Silicon Valley voices are supporting Donald Trump, while Pritzker family office head James Pritzker, Rockefeller family office head David Rockefeller Jr., Soros family office head Jonathan Soros and Laurene Powell Jobs back Kamala Harris.
In a recent UBS survey, 57% of wealthy investors favored Harris, and 53% of business owners preferred Trump. And recently, Duquesne Family Office founder Stanley Druckenmiller predicted that Trump would defeat Harris in the election, though he noted that things can change quickly.
“It’s an evolving situation,” the legendary investor told Bloomberg. “If you had asked me this 12 days ago, I would have said, ‘I don’t have a clue; it’s still a total toss-up, and I don’t have any conviction who is going to win the election.”
Wealth tax or tax cuts?
Both candidates have very different approaches to tax policy — especially regarding the fate of Trump’s 2017 Tax Cuts and Jobs Act (TCJA), which reduced the top tax rate for high earners to 37% and expires next year. Trump has said he’d like to extend the TCJA, which will give households in the top 1% an average tax cut of more than $60,000 in 2025. Harris seeks to let the TCJA expire, restoring the top rate to almost 40% for married couples earning more than $450,000.
“The TCJA is a really, really big deal and very important,” said Pat Soldano, president of Family Enterprise USA, which promotes and advocates for family businesses. “We surveyed our members, and we’re all concerned about the expiration of that law. We’d like to keep everything in it.”
Additional tax relief for wealthy Americans is also possible if Trump carries through on his vow to repeal the Affordable Care Act, which includes taxes for high-income households. The combination of both measures could deliver an average $400,000 tax reduction for ultra-high-net-worth Americans, says the left-leaning Center for American Progress.
Harris’ proposals for a wealth tax and the taxation of unrealized gains — a 25% tax on these gains for individuals with fortunes exceeding $100 million — “are likely to have a significant impact on the financial landscape for high-income earners in America,” said Dennis Shirshikov, a professor of finance, accounting and economics at the City University of New York.
The biggest concern to family enterprises surveyed by Soldano is a potential reduction in the estate tax exemption. Under Trump, the exemption that allows wealthy families to pass along substantial gifts tax-free was doubled to $13.61 million in 2017. Harris seeks to lower that exemption to $3.5 million, where it stood in 2009.
Soldano’s members are also concerned about the elimination of the step-up basis, which adjusts the value of an inherited asset when it is passed on after death, resulting in substantially lower taxes for heirs.
What will be the rules of the road?
On the regulatory front, the outlook is a little more complicated. Currently, family offices are exempt from registering as investment advisers, and most are not required to disclose assets. “I would suspect that family offices would remain exempt,” said Amy Lynch, a former regulator at the Securities and Exchange Commission and Financial Industry Regulatory Authority (FINRA) and now founder of FrontLine Compliance.
Harris’ regulatory approach is likely to align closely with Biden’s agenda, Lynch said. “There’s always talk about changes to rules regarding business formation, access to capital markets, offerings of securities — there could be some changes there if Trump is elected,” she said, adding that could also include “loosening of strings” around private offerings.
Project 2025 — a blueprint for a Trump administration from the Heritage Foundation — calls for consolidating major financial regulators and stripping power away from the SEC. The Trump campaign has distanced itself from Project 2025 despite the fact that most of the agenda’s authors were part of Trump’s team in his first term as president.
“If regulation is taken away,” Lynch said, “it could be chaos in the markets, a free-for-all that could lead to a financial crisis. There could be no rules for any of these firms — and that affects the way transactions are executed, how broker-dealers operate, how family offices operate.”
A family office member who preferred to remain anonymous told Crain Currency that he’s still undecided. On the one hand, he believes that Trump’s policies could lead to a hotter economy that benefits investors. But the candidate’s promise for massive across-the-board tariffs concerns him, since it could likely lead to supply chain shocks and higher prices for products, which hurts the economy and creates volatility.
“Investors always like to stay on the right side of the table,” Lynch said. “It’s harder to know if you’re on the right side of the table under a Trump administration because the playing field would be very uneven.
“In that scenario, you’ve got a more volatile market, and it would be more difficult to feel confident that your investing decisions are profitable. That could be good for hedge funds who love volatility but hard for family offices trying to maintain their wealth.”
More important than the presidential election, investors should pay attention to broader trends in the economy, said Bobby Mascia, CEO of Mascia Capital Group, a private family office in Montville, New Jersey. He will be paying more attention to the Federal Reserve’s interest rate decisions.
“The fundamentals remain,” Mascia said. “Look for strong companies and income-generating assets that exhibit some stability in value so that you can reinvest that income into equities and buy into moving markets.”
Princess brings food, water to family office forefront
By ANDREW COHEN
Princess Jahnavi Kumari Mewar, a member of India’s historic Mewar royal family, is trying to galvanize family offices around the world to address humanity’s most existential need for life.
“I have conceptualized creating a center of innovation and excellence for addressing food and water insecurity around the world,” she said. “I don’t want to be the one telling family offices how to solve a problem. I want it to be a platform for collective action where we together come up with methods and solutions to address pressing global challenges, and they don’t need to be set in stone. In fact, I would suggest they be as fluid as possible so that it’s adaptive.”
Jahnavi stands as the 77th generation of the Mewar family — whose dynasty ruled regions of India for more than 1,300 years, from 566 to 1949. “Ours is the only family that never bowed down to either of the imperial powers — Mughals and British,” she told Crain Currency.
As founder of the multi-family-office co-investment firm Auctus Fora, Jahnavi visited New York City in September to attend the United Nations General Assembly and speak on panels related to global policy agendas. U.N. statistics show that 750 million people around the world face severe food insecurity.
Auctus Fora has advised on over $5 billion in assets.
Early beginnings
Jahnavi’s finance career began at the family office of her father, Maharaj Shakti Singh Mewar, who employed Jahnavi as a teenager in the late 1990s. Today, Princess Jahnavi manages a family office with her husband, Prince Parikshit Singh of Jodpur, since their royal wedding in 2017. She also recently joined the advisory board of ForbesAPEX, a new group that addresses issues that affect Asian and Pacific Island residents and the Asian-Pacific diaspora.
“Most families that have built immense wealth, regardless of how many generations they go back, I think there comes a point where somebody gets really greedy or overambitious,” Jahnavi said. “I think greed comes from ego, and all that comes from the fact that people generally today lack gratitude.”
To help gain that sense of gratitude, Jahnavi left India, where the Mewar family has a history of palaces in the lake city of Udaipur. She graduated from Deakin University in Australia and spent time living in England, the Netherlands, Geneva and Dubai.
Living away from India for 14 years allowed Jahnavi to “put myself outside of my comfort zone to create more emotional and social maturity for myself and create an identity that was outside of India and my family background. You don’t appreciate the things that are in front of you that are everyday things, be it a home or place or people. And the moment you get that distance, it’s a renewed love.”
In college, Jahnavi said, she took jobs as a waiter for a catering company and a nightclub promoter. Her advice to other heirs is to “humble yourself and see how the rest of the world lives and survives,” as the experience helps you become “a better leader and better human being as someone who has now gone through challenges that were yours to take on and overcome.”
Since Jahnavi returned to India, over 300 family offices have emerged in the country. For the first time, India recently overtook China as the largest weight in the MSCI Emerging Markets IMI Index. Current projections expect India to become the world’s third-largest economy by 2027, surpassing Germany and Japan.
“India always had the potential, but our infrastructure and on ground development needed to catch up. We are there now because of better policy-making,” Jahnavi said. “In the past 10 years, it has become a country and economy where people can do business with ease. They can make investments that are risk-mitigated.”
For continued growth, Jahnavi would like to see the Indian government introduce programs similar to the Australian government’s $120 billion commitment over 10 years to facilitate infrastructure projects backed by private investors.
“There could be pipelines created by the government for private funds or family offices to invest in those assets, but they’re already cleared and blue-chipped,” Jahnavi said. “But today as we stand, I would bring my friends and my capital to invest in my country, which I probably wouldn’t 10 years ago.”
LOOSE CHANGE
Foundation Source enters DAF market: Foundation Source has acquired Vennfi, the parent of the donor-advised-fund (DAF) sponsor platform Charityvest. The move is expected to help client retention for Foundation Source, whose software supports planned giving and private foundations.
Rockefeller Global Family Office adds Pennsylvania-based team: Rockefeller Capital Management has expanded its family office division with the acquisition of DiMedio Wealth Partners, a 16-person team from Merrill Lynch.
DeVos family office to open more coffee shops: The Florida-based coffee roaster Foxtail Coffee Co. plans two more locations in West Michigan under a franchise deal with the Baton Collective, the family office for Cheri DeVos Ehmann.
Help us with a story: We’re working on a story about family offices that created their wealth in the oil and gas industry. If you have any comments on the topic, reach out to [email protected].