Family Business Audiocast | Episode 4 | Ruby Hugueny | Ruby's Consulting Family Office

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About Our Guest:

Ruby Hugueny has over 40 years of distinguished experience in senior leadership roles. Her comprehensive service offerings include managing business travel, art purchases, removals, property oversight, staff recruitment, and family life management. By leveraging her deep understanding of wealth preservation complexities, she has become a trusted advisor for high-net-worth families and their holding companies, including those from BIC and LVMH. Her insights extend to advising on hard investments and hard assets, enhancing her value to family businesses.

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[Transcript]

R. Adam Smith: Welcome to the Family Business Audiocast on LinkedIn.

I'm R. Adam Smith, creator of this Audiocast series. I've been entrepreneur, investment banker, and board leader for over 25 years. Today we have almost 50 registrants for today's call. Thank you for joining. The Audiocast will be recorded and shared at a later date as well to share with your network. Family business is a passion of mine, having grown up in a vast range of dialogues and business with fascinating family, entrepreneurs, and enterprises around the globe. I founded the Family Business AudioCast offer a useful platform for listeners to hear from veterans, academics, and leaders in family-owned enterprises and family offices. Whether you're a seasoned family business leader, billionaire, or building a family office, these conversations should be enlightening. Today we welcome Ruby Hugueny. She is a family office consultant in Geneva in Europe, expert in asset management and art advisory with a focus on those areas as well as managing delicate relationships with family businesses around the world. With a deep understanding of the complexities involved in managing and preserving wealth for high net worth individuals and families and their holding companies, Ruby has become a trusted advisor in the field. Her expertise lies in assisting clients in effectively managing their business assets within the family office context and offering valuable guidance on hard investments and hard assets as well. Her insights have made her an invaluable resource for family businesses and their wealth preservation strategies. And over the years worked with illustrious families and their CEOs or boards, including at BIC and LVMH. It's a pleasure to have Ruby as our guest today. Let's dive into the conversation. Ruby, thank you for joining us.

Ruby Hugueny: Welcome, everyone. Thank you very much.

R. Adam Smith: So, we have about a half hour today. Let's start with your experiences as a family office consultant in general. How do you approach building trust and maintaining the confidentiality and connection to the family and their sensitive information over the years? It's fascinating, the different projects you've been part of.
Ruby Hugueny: I will refer to my numerous years in assisting a number of chairmen of large French and international companies where my job included their moral and reputational protection and also established their physical protection for them and their families during financial and political crisis. For what I have witnessed and dealt with in unbelievable circumstances, I have learned how to build trust, be indispensable and truthful. As a family office consultant, building trust and safeguarding the confidentiality of clients' sensitive information and assets are paramount to me. First, I have my own vision of confidential policy where I establish a comprehensive policy that meticulously outlines procedures for handling sensitive information. I have set a foundation of trust and demonstrate my commitment to confidentiality. I ensure that all involved parties, including employees and external associates, sign legally binding NDAs. This instills confidence in clients, assuring them of their rigorous protection of their information.

Of course, there are unbelievable situations where I was completely alone to take risky decisions, where my client wasn't reachable. This is another question. But I secured data management for them. I implemented state-of-the-art data security measures, and such as robust encryption, firewalls, and access control. By prioritizing the latest technology, I fortify our clients' data against potential breaches. Then there comes limited access. I strictly control access to sensitive information, granting it only to employees with a genuine need. This minimizes the risk of unauthorized exposure and strengthens client trust in our discretion. And then the more important things for me personally is ongoing staff training. This is key. I conduct regular training sessions to educate and empower a household team on confidentiality, data protection and privacy. By fostering a culture of awareness, I elevate my commitment to preserving my client's trust.

R. Adam Smith: And you began working with chairmen and CEOs way back in Crédit Léonet. You began this type of level of work way back in 1993. And then moving on to working with the family office at BIC, which is quite a large company, working to the chairman of BIC. And then to the fascinating LVMH, of course, as we know, is depending on what day it is, is the wealthiest owner in the world. So you, it's interesting how at a younger age you began working with these such important figures. So maybe share some examples of some of the challenging situations you may have faced and how you navigate some of the projects with these type of clients.

Ruby Hugueny: Well, Crédit Léonet was the first large bank, French large bank, which was like, they had really political and financial crisis at that time. And the bank was sinking. So I was there to assist the chairman, the new chairman, nominated by the government. And during five years of crisis, I really had some important matters to deal with when assisting a chairman, doing his, create a link between him and the rest of the world because Fred Léonet was known in the world to be a great bank and it was dying, it was sinking. So, this was a great experience because in the end Fred Lyonnet has been bought by the Credit Agricole which is a French bank as well. So, he didn't leave in the end. So, this led me to another big company which is BIC, which is a great company as well. It's a great industry. And I discovered the family office at Bic as well. I created a family office there, a private family office. So that's it for-

R. Adam Smith: For those listeners, BIC, we may think of them as a niche company, but started back in 1945. It's almost 2 billion of revenue and 10,000 employees, quite a large company. So what type of work did you do with BIC? And then walk us through your experience at LVMH at that time?

Ruby Hugueny: With BIC, I worked with the, at BIC I worked with the Baron BIC, who was the chairman and CEO of the company. He's the owner actually, and it's a family business at the same time. And I was there to assist him in the business as well as in the family, in his private family office. So my first task was to create this family office within his mansion. At the same time, take care of the business side of the job. So, it's a quite heavy position as well.

R. Adam Smith: Yes, and BIC has been more of a traditional, steady, classic family-held business in terms of its business operations. But if you compare that to LVMH, which has purchased and built and founded many family-owned brands over the years, it's quite a fascinating company. You started working there 21 years ago. So how do you compare today's LVMH, for example, with what you saw back then?

Ruby Hugueny: Well, BIC at the time was a very, still is, a very difficult family business to work with because it's not a luxury product, you know, it's different. The baron BIC, the father of the baron started to, he did everything himself. He created the product, the pen, the BIC pen that everybody knows. And it's not a luxury product. This is the difference. So it's not a great profit-making business. But it's large at the same time because it's known everywhere in the world. LVMH is different because it's a luxury product. It's expensive. Rich people can afford it. We are as BIC; everybody can afford it.

R. Adam Smith: What are your views on LVMH today? Do you think that they will continue to stay where they are or will have the opportunity to continue to grow even further?

Ruby Hugueny: Yes, they will grow because their brand is unique. I think today not everyone has a Neverfull bag. For example, Louis Vuitton bag, Neverfull Louis Vuitton bag. It's unique. So I think it will grow until everyone can afford it. So yes, it's... Well, I call it a company that works by itself. The product is sold by itself.

R. Adam Smith:  I like that.

Ruby Hugueny: So, no one can say he doesn't want a Louis Vuitton bag. That's what I think.

R. Adam Smith: That's good. Now briefly, before we talk about the fun stuff with the mansions, let's talk a bit about your time at the Federation Automobile and your time with the Formula One and the chairman, Jean Todt, tell us about that interesting experience you had before your consulting business.

Ruby Hugueny: Well, this is unique in my experience because I have never thought of working for a federation. A federation is a kind of, I can't say it's a company, it's not a company. It's a place where big companies, big automotive companies will invest money inside, like Formula One. And you don't produce. This is my vision. I have always worked in places where people produce. That's my first time where we don't produce. We just have to use the money of the automotive companies and build Grand Prix cars. So it was exciting. It was luxurious, you meet many people all over the world come to Geneva. Yes, that's true. But that's not an exciting job. It's just something which just grows by itself and you are very well paid and very well considered because it's a place of luxury. And the races are very, very nice to watch even before the races. And I think the best race is the Singapore one, which I fancy actually. I wasn't sure, I was at my feet, but working with Jean Todt is a great chance. You are lucky if you work with Jean Todt. He's a great man.

R. Adam Smith: It's great to see Formula One and also the eSports build up. The revenues for the Formula One were several billion and some people think it's worth over 20 billion dollars. It continues to grow. It's fascinating. So moving on to art, for your family offices and businesses, individual clients, you've grown to become an expert in meeting their needs in some of their art collection, I assume both buying and selling, but there's also the transport side and the confidentiality and privacy issues. Tell us a bit about your view on the art market and what are these families looking for in collecting art? Do most of them hold for long-term and pass it through the generations, or did they also buy and sell and trade in the market?

Ruby Hugueny: Well, I have worked with real French families who are very, very, very attached to art, to really to, I say always they are attached to art, but with the Catalogue Raisonné. The Catalogue Raisonné is a complete catalogue where you have a range of art from one artist, one painter artist. You have the history of his life, all what he has done, his work. And you can find these masterpieces in that catalog and you can choose them and know where they are sold. Well, from my experience, what I did for my client is he chose five different art paintings in five catalogues raisonnés. He fancied really the French artists like Monet, Cezanne, Degas, Renoir, Boudain. And he told me that these paintings were to be sold in only one option sale in London. And he started talking to me about this like three weeks before, and every day he asked me, when is the sale? When are the sales? So every day I had to tell him, no, it's on that day. So it came to my mind that I needed to organize this in a strategical manner and have a private visit in London at the prestigious Chancellor's House where these masterpieces are exposed and put a price on each one of them. That was my strategy actually.
R. Adam Smith: Yeah, I've seen, especially the last five years, a significant amount of wealth that is being created from building and selling businesses is moving into hard assets in art and also real estate, of course, and cars, but particularly art and modern art. Moving away from the old masters into modern art and contemporary art, I think except for perhaps a small portion of the watch or the car market, vintage car market, parts of modern contemporary art are the most rapidly appreciating assets in the world the last 10 years. So it's not surprising that families will move more of their assets into that art. It's also more tradable in the primary market and secondary markets. So some of your projects involve restoring castles, which is fascinating. And we'd love to hear about your recent project. You've obviously garnered a great deal of trust in with your client to enhance and manage the multi-year development of a recent mansion. So, tell us a bit about that.

Ruby Hugueny: Well, I will say that in the beginning, all these projects, I'm very proud for having implemented all these projects. And really, I'm very emotional when I talk about this because it's really a trust that has been built during years. And I know how to become an indispensable person to the client I'm working with. That's why one of my clients interests me with the renovation of his Louis 16th century mansion. This delicate mission, which was to be accomplished in nine months, embellishing, and renovating the thousand square meter private mansion, classified as a French historical heritage site located in the heart of Paris, demanded a large budget and a tight schedule. Nine months, it’s not much and this was imperative. It's very strange because I learned so many things in place. This mention, classified as a French heritage, you cannot start renovation until you have dealt with the French Office of Architectural Heritage. So, I got to know these people who are really attached to French history. This is where you learn how history is important in France. So after that, I drew all four tenders with the help of a specialist. There also I discovered that prestigious companies and craftsmen specialists have to be selected to carry out the embellishment. It's very unique. It's very, very unique. You need to choose those companies on a very small scale and be well connected to them. So that's from site meetings to inspection meetings, visits, I learned day after day how history is attached to these mansions. So after the structural works, the delicate task of finishing and decoration began. And the headache was to look for unsuspected crafts and know-how such as the specialists in gold leaf, passionate decorators and landscape designers and renowned antique dealers opened their networks to me and showed me the finesse of their world and their work. Moreover, the cherry on the cake here, should I say, is the Winter Garden, which was the real obsession of a family member. This garden was decorated with unique pieces such as a fountain from the Mughal period from India 14th, 16th century. Who would have thought that someone, a family member would ask for a fountain coming from the Mughal period, 16th century in India? This was completely unbelievable. So this also was a very hard task to find this fountain. And I did it. I managed to do it. I delivered a project to this client on time and on budget, and the result was spectacular.

R. Adam Smith: That's wonderful. We won't be able to see that, but we can see on your LinkedIn a photo or two. But it seems like there's a tremendous amount of classic real estate in Europe, and particularly in France and Italy of these chateaux and mansions that are not making their way through the generations and are available for purchase, either for-profit or non-profit. What is going to happen with all of these chateaux around France in particular, and Europe in the coming years?

Ruby Hugueny: Well, I think that most of them will be sold to people who really have the funds to renovate those chateaux. And as I said, it's, these are very unique mansions, and you really need a lot of money to renovate the chateaux. And also, this makes France the most beautiful, especially Paris the most beautiful city in the world, as Abiy has mentioned. And I think that we, well, years after years, you will have people investing in this chateau I mentioned. I'm confident about that, and I'm prepared to assist in that.

R. Adam Smith: Oh, great. That's wonderful. Wonderful. I think some of the chateaux will be purchased by non-profits as well, or even leadership or think tanks, and have events in them that are not just residential. I think that would be a trend as well.

Ruby Hugueny: Yes, because those are family chateaux, mansions, where you have you know, old French families are, before you had big families with many children, and those chateaux are so big that you cannot sell a chateau tomorrow, it doesn't work like that. So, what they do is rent it out for example, LVMH for their fashion, you know, runway. And this also brings a lot of fun to renovate the châteaux. Most families have done this. I will compare this to the main palaces in Rajasthan in India. What happened after Indira Gandhi took power? The Maharajas started to go to work like everyone, like me, like you. So what happened to the palaces? They had to do something with the palaces. So they create hotels, five-star hotels. And so, I am comparing this just to say how you can renovate the chateau is by renting them for desfilés (runways) in France, hotels in India, in Rajasthan, and with the funds you renovate them. When you don’t want to sell them or wait for the good purchase.

R. Adam Smith: Right. Something else you mentioned in terms of the craft of managing challenging and personal relationships with the family business owners is this concept of quiet diplomacy, which cuts across the political landscapes, but also all the way down to the individual families and relationships, which you know it is a term to describe events that take place behind closed doors and without the strict confines of diplomatic protocol, not just at the country level and international relations, but also with the families and with their vendors and across the family itself.

Just to finish up today, it would be great to hear your thoughts on the tremendous expansion families and the businesses that they own and how those operating businesses will transition through the second and third and fourth generation. Do you think that especially for those G2 and G3 families, the children in their 30s let's say, do you think that more of those of those family members will retain management and control the businesses? Or do you think there'll be a lot of them for sale to move them on?
Ruby Hugueny: Well, there is a saying, I don't know whether you've heard that, but when I was working at BIC family business, I happened to hear a saying from my chairman who said, “you know, Ruby, my father created the company. I developed it. But the third generation is said to not to be very interested in developing it.” Well, I don't know how true is this, but I have the ability to talk to the three generations. From my perspective now, I see that the third generation is struggling. The third generation struggles. It's because of the modernism. I don't know how to call this. But I have this particular example where I have seen three generations. Yes, the third generation is struggling. And perhaps because of the good working capital they have and they say, okay, we don't have to do as the father or the grandfather has done. 60% of their, as I say, of their profit comes from the United States, and it works well there. Is there any interest for them to develop in Europe or in Asia? All this is getting difficult today because those countries also in Southeast Asia, in Asia, do not want, they want joint ventures. They don't want companies to establish. They want to do joint ventures with those companies. I understand also the difficulties. But if you compare to LVMH, it's unique, as I said. It's only LVMH who can do it. There is no joint venture that you can do with LVMH, you see? So it depends on what product you... That's why the generations, the sons, daughter of Bernard Arnault, they have the same culture as their father and their grandfather. You see, you have three generations at the LVMH, and you have three generations at BIC. Those two companies I know very well. And you see how the actual generation is working. The culture at LVMH is still unique, but the culture at BIC is changing.

R. Adam Smith: Well, it's very inspiring. I think in America, as a newer country, we have a lot of large businesses, less of them are privately owned, but I think that American businesses that are family owned moving into the second generation and third generation, which many of our listeners I can see are involved in the asset allocation and the consulting and the family office work for these family businesses can look to Europe for some lessons. So, great talk today. We will be recording this and sending it out. I'd like to thank our family business audio cast attendees today, and our esteemed guest, Ruby Hugueny, a unique veteran specializing in estate management and family business assets and art advisory. Thank you for joining today, really enjoyed your time. Your insights on the client trust and the context of family offices working across the generations is fascinating. So thank you very much.

Ruby Hugueny: Thank you. Thank you very much indeed. Thank you everyone.

R. Adam Smith: This is R. Adam Smith. Thank you for joining us today.

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