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The-Single-Family-Office-Book.Pdf i Family Office Help Line: (212) 729-5067 THE SINGLE FAMILY OFFICE Creating, Operating & Managing Investments of a Single Family Office By Richard C. Wilson Billionaire Family Office | Family Offices Group Association ii iii Family Office Help Line: (212) 729-5067 This book is dedicated to my amazing daughters Bella & Maya Wilson. iv v Family Office Help Line: (212) 729-5067 Table of Contents Chapter Page Preface 5 Part 1: Single Family Office Fundamentals 7 Chapter 1: Introduction to Single Family Offices 9 Chapter 2: Single Family Office Talent & Teams 17 Chapter 3: Single Family Office Operations 35 Chapter 4: Single Family Office Governance 47 Part 2: Starting a Single Family Office 59 Chapter 5: Creating Your Family Compass 61 Chapter 6: Starting a Single Family Office 69 Chapter 7: Partners, Vendors, & Service Providers 87 Chapter 8: Investment Committees & Advisory Boards 93 Part 3: Single Family Office Investment Portfolios 109 Chapter 9: Family Office Investment Management 111 Chapter 10: Investment Fund Manager Selection & Monitoring 113 Chapter 11: Direct Investing & Operating Businesses 131 Chapter 12: Co-Investing & Club Deals 171 Chapter 13: Real Estate Investments and Hard Assets 191 Part 4: Single Family Office Best Practices & Models to Emulate 205 Chapter 14: $1 Billion+ Single Family Offices 207 Chapter 15: Intergenerational Money Management 227 Chapter 16: Converting from a Single Family Office into a Multi-Family Office 233 Chapter 17: Outsourced Chief Investment Officers 243 Chapter 18: Virtual Family Offices 247 Chapter 19: The Future of the Single Family Office Industry 261 vi vii Acknowledgements The Single Family Office book would not have been possible to write without the help of many smart and dedicated professionals. While I cannot thank everyone who played a part in this book’s creation, I want to especially acknowledge the contributions of all those who invested their time and energy in editing, contributing insights, and sharing resources, including: Theodore O’Brien, Tyler McNicholas, Douglas Scott, Rafael Tassini, Rahul Koshal Dubey, Michael Oliver Weinberg, Richard Ross, John Bishop, Abe Tatar, Bret Magpoing, Andrew Hector, Chris Allen, Geoffroy Dedieu, Ira Perlmuter, Harris Fried, David Fisher, John Jonson, Christian Zabbal, Shiraz Poonevala, Michael Connor, Brendan Holt Dunn, Tony Kypreos, Ingemar Hulthage, Steven Goakes, Frank Casey, John Grzymala, Matthew Andrade, and Elizabeth Hammock. Disclosure The contents of this article, including any videos presented herein, do not constitute an investment recommendation. As such, this book does not contain all information that a prospective investor may desire in evaluating an investment strategy or individual investment. Each investor must rely on his or her own examination of an investment strategy or individual investment, including the merits and risks involved in making an investment decision. Prior to making an investment decision, a prospective investor should consult his or her own counsel, accountants, and other advisors to evaluate the merits of an investment strategy or individual investment. Additionally, any discussion of the past performance of any investment strategy or individual investment, should not be relied on as a guarantee of future performance, and no warranty of future performance is intended or implied. viii Free Family Office Podcast We have recently launched the first podcast on the family office industry. This podcast covers family office investing, ultra- wealthy family challenges, how to start a family office, how to acquire operating businesses, and global trends in the family office industry. This is a variety show podcast with short two to three-minute episodes, mid- length client case studies and insights, and longer industry interviews and recordings of speeches given at family office conferences. To subscribe today, please visit http://FamilyOffices.com/Podcast If you would like to appear as a guest on the Family Office Podcast under a short 15-20 minute interview format, please reach out to our team at (212) 729-5067 or [email protected] www.SingleFamilyOffices.com 1 Family Office Help Line: (212) 729-5067 2 The Single Family Office by Richard C. Wilson [email protected] 4 Free Webinars ($396 Value) The following webinars are sold on our website for $99, and contain over six hours of conference presentation quality information on family office investments. Our hope is that by providing these to you for free, we can help some of you take action and make tangible progress on improving your single family office team, investment portfolio, and investment goals overall. The following webinars are available: Single Family Office Investing: This 90-minute webinar reviews what the members of our family office association, and Billionaire Family Office are investing in and why they consistently do so. It discusses the maturity of the investment portfolios between single family offices in Asia, Europe, and the United States and also suggests some best practices for single family office investment management. Creating a Single Family Office: As the title suggests, this 90-minute webinar discusses the steps required to launch a single family office. Similar to the content provided in our chapter on this topic, this presentation reviews the Family Office Compass concept, why it is so critical, and walks listeners through the importance of following proven single family office startup steps. All family offices are unique, but so are all businesses, and there is no sense trying to start a single family office without collecting best practices on the process first. Direct Investing, Co-Investing, & Club Deals: This webinar dives into direct investing, co-investment, and club deals. After listening to this recording, you will know the difference between these types of investing, why they are growing in popularity, and get an introduction as to how to navigate deals. This is perhaps our most technical and valuable webinar completed to date for those who have been in the industry for some time already. Family Office Investment Priorities: This 90-minutes webinar reviews www.SingleFamilyOffices.com 3 Family Office Help Line: (212) 729-5067 what most families are investing in, why they invest in those areas, and discusses their investment priorities. Similar to the Single Family Office Investing webinar above, this recording reviews where the industry is headed and why our association believes that is so. This webinar is most appropriate for advisors such as attorneys or CPAs that have started to work with a few single family offices and are trying to get a better understanding of the industry. As a thank you for purchasing this book, please download these webinars; please visit http://SingleFamilyOffices.com/Webinars 4 The Single Family Office by Richard C. Wilson [email protected] Preface This the content of this book draws from experiences working with our clients, as well as case studies and interviews gathered from operating Billionaire Family Office, or Wilson Conference series events on family offices, and our Family Offices Group Association. We are committed to helping formalize the single family office niche as part of the greater wealth management industry. As you will see from our benchmark study, families report that sharing best practices is the largest source of value for them and particularly helpful as they seek to connect and network with each other. This text reflects that desire by single family offices; we have integrated concise interviews with real single family offices, in a transparent fashion which shares the real family’s name, stories, and lessons learned. We have also embedded several templates, working documents to adapt for your family, as well as more than forty video modules, essentially providing you with a Single Family Office 101 multimedia training program for under $10. A statement that I hear time and time again at industry events is, “If you have gotten to know one family office, you know one family office.” The point is that every family office is different and it is impossible to understand and learn about the industry in the same way one would for any other investor group or type of business. I find this comment not only to be an unproductive assessment, but also one that is false. Certainly, no one family is alike in all respects, but among single family offices there are similarities, models that single family offices can emulate and adopt from each other, and best practices that we will share within this book. We have met with 1,000 family offices face-to-face in 22 countries, and while, like this industry, we feel that we are just getting started, we have identified some models, best practices, and insights that almost every single family office could benefit from. As you have likely experienced before, many industry conferences have stages crowded with service providers, software vendors, and consultants. At www.SingleFamilyOffices.com 5 Family Office Help Line: (212) 729-5067 our conferences, we try to pack the schedule with family office speakers—for example, our Family Office Super Summit this year has 59 speakers over 3 days, and 50+ of these speakers are family office executives. We have taken that same approach with this book. I have read almost every book written on the industry and I often grow frustrated by how often the authors quote dozens of service providers, vendors, consultants, etc. to the point where at the end it feels like I have read an anthology of sales brochures. For this book, we stick to interviewing the source of the real experience and knowledge: the single family office executives and ultra-wealthy families. Also, to hold ourselves accountable to only reporting on what is true, rather than presenting case studies which leave the reader uncertain as to whether the examples are authentic or invented. We transparently publish the family or family office’s name in many of the case studies, and interviews provided in this book.
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