Cape May Wealth

Making family office knowledge available to everyone.

Managing Partner

BLN Capital

BLN Capital is the single family office of Daniel Stammler, Janosch Sadowski and Oliver Löffler, the founders of Kolibri Games, a Berlin-based mobile gaming studio.

www.blncapital.com

Head of Family Office

Team Europe Management GmbH

Senior Investment Manager at Team Global (then Team Europe), the holding company of Lukasz Gadowski, founder of successful businesses such as Spreadshirt, Delivery Hero, and Circ. I was involved in investments such as Circ (Exit to Bird), MILES Mobility, Volocopter, and Enpal, as well as other alternative investments in the venture capital and real estate space.

Senior Investment Manager

Investment Manager

MILES Mobility GmbH 

I had the pleasure of accompanying MILES Mobility during a period of 10x fleet growth and expansion to three new cities. During that journey, I gained invaluable experience about the venture capital profession, such as due diligence and deal execution, management changes, and fundraising.

Advisory Board Member

Circ

Portfolio Support by Team Europe (now Team Global). I gained firsthand experience of "blitzscaling" a venture-backed business from 10 to more than 1000 blue- and white-collar employees, managed fundraising and investor relations processes, and was a key member of the team driving the sell-side process in which we successfully sold Circ to Bird in January 2020.

Corporate Development & Strategic Partnerships

Goldman Sachs

Sole Investment Professional of a 7-Person Wealth Management Team managing more than $3bn. in assets. Acted as the team's lead client portfolio manager with full responsibility for asset allocation planning, implementation, trade execution and performance monitoring. Successfully assisted wealth advisors with new business efforts generating more than 9 figures of new assets under management for the team.

Financial Analyst - Private Wealth Management

Joined Goldman Sachs' Private Wealth Management team in San Francisco for the Goldman name and a chance to live on the West Coast. Found my true passion in helping affluent individuals with and without prior experience in the financial markets make better decisions when it comes to managing their wealth.

Private Wealth Management Intern

Managing Director @ Cape May Wealth | Head of FO @ BLN Capital | Exploring trends and developments in wealth management, family offices & more

I am Jan Voss, Managing Director of Cape May Wealth and Head of Family Office at BLN Capital.

About Cape May Wealth:
Cape May Wealth is a Berlin-based wealth management firm. We strive to make family office investment knowledge available to everyone with the goal of helping entrepreneurs make better decisions when it comes to their wealth. Whether you are looking for assistance in defining your goals, selecting the right partners to work with, or to set up your own family office structure - we can help you achieve better results by tapping into experience in setting up three of the biggest family offices in Berlin.

About BLN Capital:
BLN is the family office of Daniel Stammler, Janosch Kühn (Sadowski) and Oliver Löffler. Daniel, Janosch and Oliver previously founded Kolibri Games, a Berlin-based mobile gaming studio, which they sold to Ubisoft in January 2020. At BLN, I am responsible for all investment-related topics, including overall strategy, asset allocation, manager selection, and ongoing reporting and monitoring. In my capacity, I've sourced and built a VC investment portfolio of over 30 companies, including emerging winners such as PowerUs, Kittl, and Meine Erde, and launched our fund portfolio across leading PE and VC funds. 

If you are a young professional or student interested in the field of wealth management and family offices, don't hesitate to reach out - kindly leave a comment in your contact request referring to your interest in the matter.

Picture Credit: Lisa-Sophie Kempke for Business Insider

Why I changed my mind about the humble fund of funds. 🔎 


When I first started my journey of investing into funds at one of my last family office jobs, I quickly crossed paths with GPs whose main product was a fund of funds (FoF).

𝐈𝐧𝐢𝐭𝐢𝐚𝐥𝐥𝐲, 𝐈 𝐰𝐚𝐬 𝐬𝐜𝐞𝐩𝐭𝐢𝐜𝐚𝐥. The funds of funds that I had seen in my previous banking jobs were quite disappointing performance-wise due to overdiversification. Even more importantly, they came at the high price of an additional management fee as well as a small carry, on top of the fees charged by the underlying funds. The result? Single-digit IRRs and long-term capital lock-up. Or in other words, a clear case where private equity would not be worth it.

𝐁𝐮𝐭 𝐟𝐨𝐜𝐮𝐬𝐢𝐧𝐠 𝐬𝐨𝐥𝐞𝐥𝐲 𝐨𝐧 𝐜𝐨𝐬𝐭𝐬 𝐜𝐚𝐧 𝐛𝐞 𝐚 𝐝𝐚𝐧𝐠𝐞𝐫𝐨𝐮𝐬 𝐩𝐫𝐨𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧, 𝐞𝐬𝐩𝐞𝐜𝐢𝐚𝐥𝐥𝐲 𝐢𝐧 𝐭𝐡𝐞 𝐰𝐨𝐫𝐥𝐝 𝐨𝐟 𝐩𝐫𝐢𝐯𝐚𝐭𝐞 𝐞𝐪𝐮𝐢𝐭𝐲 𝐚𝐧𝐝 𝐯𝐞𝐧𝐭𝐮𝐫𝐞 𝐜𝐚𝐩𝐢𝐭𝐚𝐥. Just as individua top-tier funds can be absolutely worth their higher fees, so can a fund of funds be worth their additional fee layer as well. There are three areas to consider: simplification, diversification, and performance. (There’s also the topic of access - which will show up more than once.)

So let's make the case for Funds of Funds. This week, on the newsletter: https://lnkd.in/ekMvyYKQ

Jan Voss

Managing Partner @ Cape May | Exploring trends and developments in wealth management, family offices & more

The Case for Funds of Funds, Pt. 3: Performance 🚀 🤔 


This week, we are making the case for the humble FoF. We've spoken about simplification and diversification - so today, let's talk about a final key point, performance. A FoF, by nature is not the highest-performing instrument in its asset class. As with any 'indexed' product, it simply provides investors with the average return across its respective portfolio. But in the right circumstances, we still think that FoFs can be superior alternatives in regards to performance-related matters.

As a ‘rule of thumb’, we’d expect an average individual PE fund to generate a net multiple (TVPI) of 1,7-1,8x (figures backed by Pitchbook data for 2010-2018 vintages), with an above-average PE fund expected to generate a return around 2,0-2,2x. Of course, there’s also a chance of underperformance.

The difference between these outcomes is called performance dispersion. And for small funds, it can be massive, ranging from lossmaking over the fund lifetime (i.e. <1x TVPI) to substantially above the aforementioned outcomes (think 3-5x). However, for the so-called ‘megafunds’ (>10BN in size), this range is much more narrow. And its especially those former funds that have (in our view) struggled to generate attractive returns in recent years - they’re simply too big to generate sufficiently large outcomes to really drive returns, and tend to also be more affected by macroeconomic factors.

And relative to those megafunds, we think that FoFs specialized in small-cap funds (i.e. funds in the $100-500M range) can really shine:

1️⃣ There’s many, many more small-cap companies out there than billion-dollar buyout targets, leaving small-cap GPs with a substantial pool of potential target companies.

2️⃣ Small companies are in many cases less exposed to macroeconomic factors.

3️⃣ Small-cap buyout funds tend to highly specialized and thus have substantial experience in driving value creation efforts in their sector.

Which then brings us to the FoF level:

🚀 Small-cap funds have a higher expected outperformance/alpha, but are also riskier.

💸 The higher expected outperformance helps us offset the higher fee burden associated with FoFs.

🌍 The diversification across 8-12 funds, and 100+ portfolio companies, offsets the risk associated with small-cap, niche funds.

And that’s not just theory: Many of the FoFs focused on small-cap buyout funds have demonstrated performance that is often as good as a megacap fund, despite a much higher degree of diversification (100+ portfolio companies rather than 8-12).

Of course, things aren’t all rosy. A solid mid-cap fund might achieve stable returns higher than than a FoF. Even for a diversified portfolio, there’s no guarantee that you’ll achieve such returns, especially in challenging exit environments. And many other reasons. But if done right, a FoF can be a highly attractive product, despite the higher fee load - especially, in our view, as alternative to the 'megafunds'.

You're still looking at investing 𝘴𝘦𝘤𝘰𝘯𝘥𝘢𝘳𝘺 funds? That's 𝘴𝘰 2024. 🥱 


The future is here, folks. 𝘛𝘦𝘳𝘵𝘪𝘢𝘳𝘺 is the way to go, and we're forecasting to move on to quarternaries as soon as Q3 2026. 🚀 


(Full disclaimer: This is obviously satire - yet very entertaining for my esoteric finance-loving heart. Thanks Leyla Kunimoto for the wonderful infograph.)

Writing about private markets - from the LP seat | Helping LPs navigate private markets with clarity

I can't believe it's come to this, but here's a visual representation of this ridiculous structure. Ladies and gentlemen, a tertiaries fund: 

- bottom: actual portfolio companies, purchased by PE Funds I and II (with respective LPs)

- a secondaries fund comes along, buys LP interest in Funds I and II from some LPs (gives them money, in exchange gets their stake in the fund). This secondaries fund raises money from other LPs

- but now, we have a tertiaries fund (!!) This fund will buy secondary interest in secondaries funds (by raising money from other LPs). 

And no, this is not a second sale of those original fund stakes. This is a sale of stakes in the secondary fund. 

Does anyone even remember how many layers back the actual value is created??? 

P.S. not to be confused with CV vehicles (although CV vehicles are a subset of a secondaries fund bucket) - stay tuned for that visual..

Want a deeper dive on secondaries? Here you go: 
https://lnkd.in/g44zixBK

The Case for Funds of Funds, Pt. 1: Simplification (and Access) 💡 


For affluent individuals, accessing alternative asset classes such as PE or VC can be tricky. With total investable assets in the 10-20M€ range and a typical allocation to PE/VC of around 10-30%, clients find themselves with a target allocation of 1-6M€. And for investing in individual funds, that can be a challenging amount - for a number of reasons.

First, minimum ticket sizes. While I've had positive experiences around the minimum amount required to access high-quality funds, it is hard, if not impossible, to access high-quality, individual funds without a minimum ticket of 1M€ or higher. 

Secondly, if you want to invest into individual funds, you need to diversify across 3 or 4 funds per year. But not just in one year, but across multiple years until your portfolio reaches ‘break-even’ (i.e. distributions are higher than capital calls on a calendar year basis). For a diversified fund portfolio, we’d expect 6-8 years. Until then, some early funds might’ve called all their commitment, while later ones might begin to be offset by early distributions. Using our internal models, we usually see net capital calls (i.e. capital calls minus distributions) of ~66% of total commitments until that break-even date - which gets us the following equation:

🧮 Total invested capital = years before break-even  annual commitments * 66%

And if we fill in these numbers, we can see that with 10-20M€ investable assets, you might end up with an allocation to your fund portfolio bigger than what you might be comfortable with:

🧮 6 years before break-even (in Y7) * 3M€ (3 funds  1M€ per year) * 66% = 11.9M€ in total invested capital

Finally, let’s change the equation and solve for what annual commitments we’d require to get to a 3M€ total investment:

🧮 3M€ total investment / (6 years * 66%) = ~760K€ in annual commitments

Building a fund portfolio with such commitments is challenging in terms of access. On top of that, you'd also find yourself spending an enormous amount of time dealing with the complexities of liquidity management, as well as ongoing accounting and tax matters. 

To be clear: It’s not impossible. We have some clients who have combined direct access and select feeder funds to build high-performing fund portfolios. But more likely than not, we’d assume that any excess performance from a portfolio of individual funds would be eaten up by direct costs (feeder fees), indirect costs (accounting and taxes), and implicit costs (time and efforts). 

One alternative would be evergreen funds with all their associated benefits and challenges. Or you consider the humble fund of funds, which allows you to build a diversified portfolio with as little as 1-2 funds a year. With some FoFs being split across regions (i.e. Europe or US), you could also divide your annual commitment into two tickets, or simply alternate on an annual basis, as most FoFs also diversify across 2-4 vintage years.

The Case for Funds of Funds, Pt. 2: Diversification (and Access) 💡 


This week, we're covering the benefits of the humble fund of funds. Yesterday, we spoke about benefits to simplification (and access). Today, let's move on to the topic of diversification - where we think that a FoF shines across three parameters:

First, there is manager diversification. As the name implies, a FoF invests in a number of underlying managers (typically somewhere between 8 and 16, in my experience). The GP managing the FoF typically attempts to combine those underlying managers in a way that adds value to the overall portfolio. For example, rather than investing in ten generalist managers, they invest in a number of specialized managers that individually would be more risky but taken together offset their underlying risks. They might also want to add managers that have different ways of generating returns, i.e. from your pure-play buyout manager in a certain industry to managers focusing on turnarounds and special situations.

Secondly, there is risk diversification. Take some of those specialized managers that we just mentioned. Yes, such a manager, if they do well, is likely do perform better than your diversified generalist megafund. But things can go the other way, too, so if you are committing to 3-4 funds per year, betting one of your tickets on such a manager might be overly risky. A FoF can alleviate that problem, providing investors with diversified access to such specialized GPs without incurring outsized single manager risk.

Taken together, manager and risk diversification also translate into access-related benefits. In my last family office job, we met numerous of those high-performing, but also highly concentrated GPs. With 3-4 tickets per year, taking a bet on such a GP would’ve been too much of a concentration risk. However, we still saw benefits in this approach, and instead opted for a FoF to access those funds and their expected performance potential.

Third and last, there’s time diversification. While not the case for every FoF, many FoFs spread their commitments to GPs over 12-36 months (i.e. 1-3 vintage years). Those underlying managers also have investment periods of 3-5 years. Assuming our FoF invests in 12 managers over 3 years, and our underlying managers invest in 10-12 companies, our single commitment becomes a portfolio of 120-144 companies built over 7-8 calendar years. This diversification extends further as you invest in another fund of funds in subsequent years.

However, investors should be mindful of overdiversification. If your fees are very low (think a global stock market ETF), you’d gladly pay a few basis points more to lower your risk while still generating performance similar to your desired benchmark. However, in the world of alternative assets, where fees are still measured in percents rather than basis points, you should be mindful of how incremental (over)diversification might negatively affect your performance.

Dealing with Concentration Risks, Pt. 2: Should you be losing sleep? 😴 


Frequent readers know that my biggest piece of advice is to know your Investment Objective: Don’t just set an arbitrary return goal, but tailor your portfolio to the actual required return and bearable risk. These risk and return assumptions should ideally be based on quantifiable goals, such as an income requirement or a desired nest egg for your retirement

And because if you don’t know your required return, or the level of risk that you can bear, it’s hard for you to evaluate whether you should lose sleep over the Mag 7 weight - or if you can rest peacefully at night. 

If you’re in your early twenties with a monthly ETF savings plan aimed at boosting your retirement, the Mag 7 weighting probably shouldn’t concern you at all. Here, you can rely on an ETF’s mechanism to automatically rebalance in and out of stocks according to their weight of the index. Perhaps Mag 7 will turn out to be overvalued, sending your ETF lower at some point in the near or far future. But since you’re adding to your position on a monthly basis anyway, perhaps even at that lower price, the Mag 7 overweight isn’t something that you need to lose sleep about.

If you just sold your tech start-up and are now looking to invest your proceeds for long-term income, you should be mindful of Mag 7. Most of the tech entrepreneurs that I know are overallocated significantly to tech, for example through a potential remaining stake in their business, venture capital fund and direct investments, or single tech stocks (often those part of the Mag 7). They’d deem the public equity ETF of their overall portfolio as a relatively safer bet, without taking into account that it further increases their tech sector allocation. There’s also second-order effects, such as the perceived correlation between NVIDIA and the current AI trend, to which you might be exposed through direct investments in VC stocks.

If you’re about to retire (and/or just sold your business and are looking to construct an income-oriented portfolio!), potential risks to your public equity ETF should definitely be top of mind for you. But not necessarily (just) because of the overweight in Mag 7, but because of the significant drawdown risks embedded in equity as an asset class. As mentioned before, the current weightings might make indices including those stocks slightly more risky than they have historically been in a more ‘balanced’ form - which should motivate you to continuously reconsider your asset allocation, and its alignment with your risk and return parameters.

So if you find yourself negatively affected by the Mag 7 overweight - how can you mitigate them? More on that in our final post tomorrow.

(Picture below: Knows their investment objective, and is NOT losing sleep over Mag 7 concentration risks.)

Dealing with Concentration Risks, Pt. 3: Mitigating (Mag 7) Concentration Risks 🩹 


This week, we talked about concentration risks - and who should worry about them. Assume you are worried. What can you do to mitigate that?

A common idea is to switch from market cap-weighted to equal-weight indices. In the NASDAQ index, switching to equal-weighted would reduce our exposure in Mag 7 substantially from >40% to just 7%. 

Yet investors should be advised that even passive investments can be active bets. Changing your allocation to Mag 7 from 40% to 7% or even lower clearly falls into the territory of an active management-sized bet. You need to be able to bear the consequences of this choice, which might take considerable time to play out. You don't need to switch entirely, of course - switching just 20% of your MSCI ACWI exposure to an equal-weight ETF would reduce your Mag 7 exposure by 4%, i.e. 2% per Mag 7 stock, slightly more in line with a typical single-stock exposure limit in a diversified portfolio.

Alternatively, you could try to adjust the composition of your overall equity portfolio away from US tech. While the US has without a doubt been the driver of public equity returns in the last years, it is uncertain whether that rally will continue forever - hence, investors might consider allocating to other regions and/or company sizes to reduce the Mag 7 and US risks. 

But lastly - and perhaps most importantly - investors should also consider moving away from equity into other asset classes. Many investors are rightfully biased towards equities given their historically high long-term return. But the same investors should also be reminded that this return comes at a cost, with equities historically being a comparably risky asset class as well, both on a volatility and a maximum drawdown basis.

A final piece of advice: Don't forget to rebalance. While selling out of a rally might see you losing some upside, our experience has shown that investors end up losing more sleep about NOT having sold. In the end, taking money of the table might just be the capital you need to capitalize on new buying opportunities during an eventual drawdown.

If you are a young and very long-term-oriented investor like I mentioned before, this might not affect you so much. But if you are investing a larger portfolio and/or start thinking about more complex Investment Objectives such as ongoing income from your portfolio, diversification into other asset classes should be top of mind: Fixed income is offering investors attractive ongoing yields again, commodities have proven their worth in a portfolio in the recent periods of high inflation, and alternative assets might also boost returns or provide stable income. 

Looking beyond equities shouldn’t be an afterthought, but a priority: Rather than facing the challenge of how to rebalance within your equity portfolio, investing elsewhere might be a non-obvious, but after all, easier choice than you might’ve thought.

Dealing with Concentration Risks: The (continued!) unwanted consequences of the "Mag 7" rally. 🔎 


About a year ago, I wrote a newsletter article about the impact of the Mag 7 rally on investor portfolios. Surprisingly, I didn't expect this issue to still be one a year later: One of the most common questions that we receive from clients is how to deal with the significant weight of US stocks in the equity portion of their portfolios. 

(In case you aren’t aware - as of October 13, 2025, US stocks are 72% of the MSCI World. If we go deeper, the Magnificent Seven (“Mag 7”) make up ~23-24% of the MSCI All-Country World and MSCI World Indices, and a stunning >44% (!) of the NASDAQ Index.)

In our view, the issue doesn’t necessarily lay with the fundamentals of those companies. While the Mag 7 are certainly not cheap, they are still some of the largest, fastest-growing (and in some cases most profitable) companies in the market. On the qualitative side, there is an equal number of arguments to make for those companies, ranging from continued massive industry tailwinds (NVIDIA) to what could be seen as an online advertising monopoly (Alphabet). (Of course, none of these points should be construed as investment advice.)

Instead, it is the subsequent risks that this overweight brings to the ETFs and index funds invested in those companies, and thus, the overall portfolio of an investor. We are big proponents of ETFs and their ability to provide investors with low-cost, diversified access to a variety of markets - if anything, there’s a lot more to do wrong by not using ETFs. But when an ETF’s key benefit of diversification is in question, it’s when investors should think about whether they need to make changes.

With that in mind, we want to tackle three questions this week: First, why exactly this concentration risk might be bad for your portfolio. Second, who should be worried about it. And third, how to mitigate it. Take a look: https://lnkd.in/eEz7uEgQ

Dealing with Concentration Risks, Pt. 1: The Risks of Over-Concentration 🎯 


This week, we are tackling the question of concentration risks - in particular, the overallocation of many client portfolios to the "Mag 7".

We are not the ones to judge whether the overallocation in the Mag 7 is a good or a bad thing. Some people might refer to their performance over the last years - to which I of course have to add that 𝘩𝘪𝘴𝘵𝘰𝘳𝘪𝘤𝘢𝘭 𝘱𝘦𝘳𝘧𝘰𝘳𝘮𝘢𝘯𝘤𝘦 𝘪𝘴 𝘯𝘰 𝘪𝘯𝘥𝘪𝘤𝘢𝘵𝘰𝘳 𝘰𝘧 𝘧𝘶𝘵𝘶𝘳𝘦 𝘱𝘦𝘳𝘧𝘰𝘳𝘮𝘢𝘯𝘤𝘦. Just because the Mag 7 (and tech stocks) have done well over the last decade does not mean that they will continue to do well in the future. There’s countless discussions among investors when (or if) will see a resurgence of value over growth.

But I don’t have a horse in that race. I’m focused on potential risk factors resulting from the overallocation to just seven stocks. 

As the first risk factor, the idiosyncratic exposure. If you buy an MSCI World ETF, you likely buy it for the significant diversification benefits offered by such stocks - according to MSCI, their MSCI World index offers exposure to >1.300 companies. So no matter if an industry, geography, or individual company does well or poorly for a while, you would think that the diversification, coupled with an ETF’s mechanisms causing companies to enter or leave the index, should protect you from events at the level of an individual company. 

But with the current overweight in the Mag 7, an investor in a MSCI World ETF loses some of that benefit. Despite their market-leading positions, Mag 7 companies are not immune against sudden drops in their stock price. Nvidia, for example, saw a single-day decline of -9% amid April’s tariff fears. Such moves are not unusual for a single stock - but you might’ve bought an ETF precisely to be not exposed to single-stock movements more akin to an actively managed equity fund.

Which brings us to our second risk factor: The impact on your portfolio’s overall risk profile. I have always seen myself more of a tech sector optimist rather than a pessimist. Yet it is without doubt that tech stocks, with their higher growth and (often) lower profitability than more ‘boring’ industries, have more risk and volatility than counterparts from other sectors. From its dotcom bubble peak, the NASDAQ saw a stunning 83% (!) drawdown lasting from March 2000 to February 2015, compared to a more modest maximum drawdown of ‘just’ 55% for the S&P 500 during the Financial Crisis.

Admittedly, the Mag 7 today don’t have a lot in common with the insanity of the dotcom bubble. They are (mostly) profitable, steadily growing companies with fortress balance sheets. But they are still tech stocks with higher volatility and risk - and at their current weight in common ETFs, also affect the risk factors of ETF investors who thought that they were avoiding risk.

Now we know the risks we are facing. But 𝘸𝘩𝘰 should be worried? More on that tomorrow.

Taplio

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