Lombard Odier: Planning a strategy for transgenerational long-term growth

High-net-worth families and family offices are focusing on transgenerational growth, seeking strategies that preserve and expand wealth across generations.  

Lombard Odier’s second Rethink family wealth report showed that long-term, globally diversified and bespoke approaches—drawing on endowment-inspired principles—can help families sustain wealth, manage risk and support future generations.

Every family is unique, with diverse needs and perspectives. While each family organisation may differ in structure and outlook, they share a common purpose: to preserve and grow their wealth over the long term, from one generation to the next.

In pursuing this goal, families must adopt a global perspective, both for their investments and for their family. Their wealth and heirs may span multiple jurisdictions, in Switzerland and abroad. Secondly, many are sophisticated investors who have built their legacies through entrepreneurial success, hard work and deep expertise. As such, they are accustomed to working alongside legal and investment advisors, who may support them in investing in sophisticated assets. And finally, what unites these families is a long-term horizon: a focus on resilience and continuity across generations.

At Lombard Odier, our mission is to support large families to preserve and grow their wealth over the long-term. To achieve this, we have created Grands Patrimoines, a dedicated offering designed with the flexibility to address each family’s uniqueness. Its structure is inspired by the success of leading endowment funds, which have demonstrated best-in-class performance and resilience across market cycles.

Why take inspiration from endowment funds?

The endowment approach is designed for sophisticated investors seeking long-term high performance and who have the capacity to withstand volatility and illiquidity. We observe that many prominent families have adopted this model with great success.

Endowment funds are renowned for their significant allocation to private assets, especially private equity, which has been a key driver of their strong performance, as illustrated below. However, this performance is not solely due to asset choice. It also reflects strong manager selection, carefully calibrated risk-adjusted strategies, and a judicious approach to diversification, not only by strategy but also by vintage.

While some large American endowment funds have recently disposed of a small portfolio of their private asset holdings in the secondary market, this was primarily to address liquidity needs in response to reduced government grants, rather than a major shift in their view of the asset class.

In today’s macroeconomic climate, traditional asset classes are facing diminishing return potential due to lower interest rates and exceptional performance of financial assets in the past years. The market efficient frontier will inevitably be shifting downwards. In Switzerland, for example, interest rates are now back down to zero, eroding the appeal of conventional fixed income investments. Global growth remains subdued, and rates across major economies offer limited yields, making it increasingly challenging to achieve optimal portfolio performance along the efficient frontier. Against this

backdrop, an endowment diversification in alternative assets provides a robust approach to capture risk-adjusted returns. To illustrate this perspective, see our 10-year expected returns in USD by asset class below for 2025, which will be updated as per our annual review in January 2026. We also publish returns in CHF, EUR, GBP, and JPY.

The appeal of private equity is not over

Despite the inherent challenges, private equity stands out as one of the most compelling asset classes relative to other investment avenues. Within our framework, it plays a dual role, serving as a powerful growth engine for portfolios while also enhancing diversification and offering valuable decorrelation benefits. Notably, 86% of the global economy is comprised of private companies, according to Preqin. With its long-term focus and active value-creation strategies, private equity has consistently outperformed public markets. Since 1985, the average value added by private equity is 3.2% p.a. compared to public equities index Russell 2000.

Since the early 2000s, companies have increasingly chosen to remain private for longer, with IPOs becoming less frequent. As a result, much of the value creation has shifted into private markets. In this context, rigorous manager selection is essential to gaining access to the most attractive opportunities, alongside a disciplined commitment to deploying capital across vintages over time. In addition, current concerns about the high concentration of liquid equity markets underscore the importance of seeking growth drivers in other asset classes.

How to achieve a bespoke strategy for your family wealth?

Our investment philosophy harnesses all asset classes to optimise portfolio performance, structured around three core pillars: income, growth and diversifiers. Inspired by the endowment model’s emphasis on long-term allocation, each pillar plays a distinct role in balancing return potential with prudent risk management. Crucially, this is not a one-size-fits-all framework. Our approach is modular, highly personalised, and agile, enabling us to tailor strategies that reflect each family’s specific needs, ambitions, and risk profiles, while adapting to shifting market conditions.

To best capture long-term growth, Lombard Odier has developed a proprietary tool, Your Wealth Outlook, to optimise allocations in line with your preferences and objectives. Responding to frequent client requests on maximising long-term returns, we have produced a Flagship Portfolio which serves as a reference point that can be further customised to specific goals with a bespoke asset allocation.

Consistent results that aim to double wealth over 10 years

According to our calculations, our Flagship Portfolio has demonstrated solid performance –8.7% p.a. in USD since 2003, with lower volatility than a traditional 60/40 allocation, which returned 6.7% p.a. over the same period.

Looking ahead, based on our 10-year expected returns in USD, we estimate that this type of portfolio should yield around 7.2% per annum in the median scenario. While lower than historical levels, and also lower than has been achieved by liquid alternatives in recent years, we make conservative forward-looking assumptions, reflecting today’s higher valuations. In our opinion, the outcome remains compelling.

For the private assets programme to achieve this target, patience is key. Disciplined investors should expect to double their wealth in USD within a decade in the median scenario. The range of outcomes reflects both the current macroeconomic environment and our long-term expectations for market returns across each asset class, from adverse to bullish, each with a 5% probability.

A differentiated offering for international wealthy families

To serve Grands Patrimoines at Lombard Odier, we are leveraging a team of seasoned professionals with diverse and complementary backgrounds, united by the values of our heritage. Anchored in a tradition of excellence and discretion, we mobilise a wide range of expertise to meet the sophisticated and evolving needs of international wealthy families. Our stable structure allows for a rare level of proximity with our clients. We serve significant wealth holders, with an intentionally limited number of relationships per banker, ensuring a bespoke and multigenerational approach.

Rooted in long-term trust, our services are tailored to each client’s specific needs and aspirations. With dedication and integrity, we take the time to understand each situation thoroughly, approaching it with sensitivity to family structures and shaping solutions through thoughtful dialogue.

Our strength lies in the combination of long-standing experience with international, multigenerational families and the cohesion of a closeknit team. Our diverse cultural and professional perspectives allow us to pair agility with the resilience and resources of a leading private bank. 

Over time, we have developed multiple personalised Strategic Asset Allocations (SAAs) for families, achieving successful results. As active managers, we keep our Tactical Asset Allocation based on our House view.

Disciplined implementation around your wealth diagnostic

Your Wealth Outlook enables a highly bespoke approach to wealth management. It is personalised, forward-looking, and based around clients’ life goals. It recognises that their wealth must serve multiple demands, from meeting daily financial needs to financing long-term projects and supporting their family’s aspirations.

To achieve this, we begin with a comprehensive wealth diagnostic, which forms the foundation of each bespoke asset allocation. We have four steps to build a client’s personalised portfolio:

• Wealth diagnostic: the client’s needs and aspirations are the cornerstone of the portfolio construction, taking into account his/her fiscal situation.
• Goal setting: Our bankers work closely with the client to define his/her life goals and translate them into actionable financial objectives.
• Portfolio construction: We suggest portfolio construction in order to maximise the probability of achieving the client’s essential and aspirational goals, aligned with his/her investment preferences and risk tolerance.
• Monitoring and adjusting: Our holistic reporting capabilities allow a continuous analysis of a client’s overall wealth, ensuring alignment between the portfolio’s performance and the client’s long-term goals.

Your Wealth Outlook enables clients to visualise the likely investment journey their bespoke asset allocation will bring, with the ability to adjust as required according to the investment goals.

Key takeaways to build your legacy

Managing Grands Patrimoines wealth is a complex yet essential challenge to ensure the long-term continuity of international wealthy families. By implementing an asset allocation tailored to your needs, involving new generations, and integrating sustainable values, it becomes possible to transform wealth into a true foundation for family cohesion and prosperity.

Over time, we have advised many international wealthy families guided by five key pillars:

• Excellence: Long-term track record and strong focus on service, accessibility and proactivity. Furthermore, transparent and bespoke reporting is central to monitoring the evolution of assets.
• Tailor-made solutions: Custom structuring, servicing, and portfolio management designed to address each family’s unique circumstances.
• Confidence: Trust cannot be imposed; it is built over time. The turnover of our senior bankers is comparatively much lower than that of the rest of the industry. This allows for an enduring relationship, which strengthens generation after generation.
• Team: A trusted team is essential. Our senior bankers take time to understand your family’s situation. Together with seasoned wealth planners, we accompany each family over time in different jurisdictions. Dedicated portfolio managers, supported by advanced tools such as Your Wealth Outlook, build portfolios to best achieve your goals.
• Discretion: Privacy is paramount. Confidentiality is embedded in all our operational processes. Our servers are located in Switzerland with state-of-the-art cybersecurity and stable, long-standing teams.

At Lombard Odier, we believe this is the essence of Swiss-made wealth management, combining cutting edge technology with deeply personalised services.

Re-disseminated by Wealth and Society