(305) 503-9077
FAMILY OFFICE MONTHLY September 2017
Upcoming Family Office Conferences in 2017
Deal Flow East
th elcome to the September edition of Family Office Monthly. We hope all of our October 17 , 2017 W neighbors in Florida and our friends in Houston managed to ride out the terrible New York, NY storms that hit us over the last few weeks. As a result of the storm, we rescheduled our Family Office Energy Investor Summit and we are looking forward to hosting the event in www.FamilyOffices.com/Deals Houston later this year when that city has had more time to recover from that devastating storm. For an updated schedule see the calendar on the right-hand side of this page. Family Office Energy If you plan on attending our upcoming conferences and we encourage you to RSVP as a Charter Member in the new login platform online at www.FamilyOffices.com/Login Investor Summit
Beyond the conferences, we hope that you take advantage of our extensive family office nd resources such as Family Office Monthly, database solutions, family office training programs, November 2 , 2017 webinars, and more. If you would like to learn more about how we can work with you, your business, or your family office, please contact our client services team at Houston, TX [email protected] and by phone (305) 503-9077. www.FamilyOffices.com/Energy Family Office Hosts WH Finance Website Honors Roundtable to Discuss Tax Reform Bonderman Family Office Family Office Super Family offices like to keep a low-profile Insider Monkey, a popular finance especially when it comes to Washington. website, has recognized the single family Summit That's understandable given the various office managing the fortune of TPG legislative proposals that have targeted high- founder David Bonderman as one of the December 5-6th, 2017 net-worth individual income tax...Page 2 strongest performing family offices. The Family Offices Set to Ramp Up family office, Wildcat Capital... Page 6 Miami, FL Impact Investments Wealthy Chinese Families Look www.FamilyOffices.com/Super When it comes to impact investing, it can Beyond Asia for Investments seem that every family office talks about this strategy but few actually end up making Chinese families are increasingly looking Reserve your seat today: investments. That attitude might be changing beyond Asia when it comes to their www.FamilyOffices.com/Reserve though, as a recent survey found that more... investments. A new report by UBS Page 5 suggests the younger generation of ultra- wealthy Asian families are... Page 11 E-Mail: [email protected] (305) 503-9077
Family Office and Hispanic 100 Host White House Roundtable to Discuss Tax Reform Family offices like to keep a low-profile especially when it comes to Washington. That's understandable given the various legislative proposals that have targeted high-net-worth individual income tax treatment, carried interests, tax breaks, and other interests important to family offices. But that doesn't mean that family offices (or, more precisely, the families themselves) stay out of politics and policy completely. To the contrary, high-net-worth individuals and the ultra-wealthy represent a large and active constituency for both political parties and while they may not be on stage at a rally in Iowa, their presence is made known by their pocket books. But while most family offices avoid the media and Washington like the plague, one family office has been very active in advocating its founder's interests in D.C. Usually, we wouldn't report on an individual's political activities but since the family office voluntarily put out a press release, we're happy to relay the news. According to the Daily Beast and Gonzalez Family Office's own presser, the family office had a unique opportunity to discuss tax policy with none other than Secretary of the Treasury Steve Mnuchin. Some members of the Family Office Club might recall Gonzalez Family Office speaking at and attending our events.
This past week, The Gonzalez Family Office and The Hispanic 100 came together to host the Hispanic CEO White House Roundtable. The main purpose was to discuss tax reform with the Presidential Administration and the Treasury...
...Julio Gonzalez, CEO of The Gonzalez Family Office, commented to the Administration, “As a member of the Hispanic CEO Roundtable that we collectively are here to support our President, the Administration, and tax reform. We understand as entrepreneurs that being in business means that you are partners with the government. We want to make the partnership mutually beneficial and closer.”
Full press release: http://www.prweb.com/releases/gonzalez/ceo/prweb14698407.htm
September Webinar: Investor Presentation Packages
On October 12th the Family Office Club will be You can attend all of our webinars for free as a hosting a live webinar on Investor Presentation Charter Member or register to attend here: Packages. http://FamilyOffices.com/Webinars Members can also access dozens of hours of In this webinar, Richard C. Wilson, founder of the content through our webinar recording library. Family Office Club, will discuss how you can produce an investor presentation package that We’re covering all the important family office issues actually captures the attention of your audience and in Charter Member webinars, our quarterly conveys the critical information that an investor conferences, and through educational resources like needs in order to seriously consider an investment. Family Office Monthly so be sure to receive the latest You'll learn how to craft your message, create high- by joining the Family Office Club: http:// quality visual elements, and package it all together FamilyOffices.com/Association in a coherent, captivating presentation.
2 | Family Office Monthly E-Mail: [email protected] (305) 503-9077
Family Offices Stick with Real Estate New Capital It's hard to see family offices parting ways with one of the most tried and true wealth-building strategies: real estate. One might think that family offices would Raising Book be considering edging down allocations to real estate after weaker performance Are you looking to raise last year by the asset class. But according to data from UBS's recent survey of the capital? Richard C. Wilson, founder of the Family Office industry, 45% of surveyed family offices expect to stay the course on their real Club, just released his latest estate strategies and an impressive 40% expect to increase their real estate publication The Capital investments. Raising Book: The 5-Step System for Raising Capital from Direct investment in real estate took a minor dip (0.7%) but real estate is still the Private Investors. third largest asset allocation in the average family office portfolio, according to the report. We're sometimes asked why we devote at least one panel at every event to real estate investing. When you consider that real estate is one of the most common allocations in a family office's portfolio, it's easy to see why we want to discuss the issues surrounding these investments regularly and at length with those who manage these assets.
The UBS-Campden Research report confirms commercial real estate is a far more popular asset To download the first four class than residential. In North America, for instance, family offices demonstrated a stronger chapters of this book visit http://CapitalRaising.com/book preference for investments in commercial property (62 percent) than residential property (38 and complete the simple percent). download form to receive the book. However, the popularity of real estate as an asset class for family offices has been tempered by concerns over pricing and liquidity. Looking to meet family offices in person? The Family Office Club hosts many live “The challenge for investors … is that most all asset classes are expensive these days,” says John conferences throughout the year Workman, managing director of Pathstone Federal Street, an investment advisory firm that in great locations like Manhattan, works with family offices. Singapore, and Miami. Once a quarter, we host an exclusive “In real estate, which many family offices access through direct investment or investment in private gathering for single family funds, there is not the kind of liquidity one might wish to have when you feel forced to invest in offices and affluent families to meet, share experiences, and overpriced assets,” he adds. “We believe this may be one of the primary reasons behind the build relationships. hesitation by many to invest in the less liquid investments today.”
Source: http://www.nreionline.com/investment/family-offices-want-play-it-safe-when-making- real-estate-bets Spotlight: Point72 Sees "Enormous" Alpha in Japan Steven Cohen's $11 billion Point72, which is due to start taking outside capital, certainly isn't missing any opportunities to expand in 2017. The family office is If you would like to be said to be hiring up in a big way in Japan to take advantage of a unique considered for membership (free opportunity in that market: to single family offices) please contact us:
Point72's international business Chief Executive Officer Marc Desmidt said in Tokyo, "When E:[email protected] we look at Japan we see an enormous opportunity in the alpha space. It's incumbent upon us to P: (305) 333-1155 328 Crandon Blvd. #223 ensure that we have the right people, the best positioned, the best trained to seek those alpha Key Biscayne 33149 opportunities out." Source: http://www.opalesque.com/665744/ family_office_Point72_in_rapid_expansion_after_seeing574.html E-Mail: [email protected] (305) 503-9077
Video: Forget About Making Money, It's More Profitable I recorded this video on a recent trip to speak at a conference in Seattle. In the video, I share one of my best business strategies: forget about making money. I know it sounds counter-intuitive and, as I explain in the video, it's more complicated than just running a non-profit without ever considering the bottom line. In my experience running a business and working with family offices, I've often found there is an inverse relationship to trying to make money from a business or family office relationship and actually doing so long-term. The more that I talk with other successful business owners, the more I've found that many real breakthroughs and leaps in your business come not from driving yourself crazy trying to monetize every single relationship but from delivering value no matter what.
Hopefully this video helps you and your business, I'd love to hear your thoughts on this concept.
Richard C. Wilson CEO & Founder Qualified Family Office Professional (QFOP) Family Office Club (305) 503-9077 328 Crandon Blvd. Suite #223 Key Biscayne, Florida 33149 United States http://FamilyOffices.com
4 | Family Office Monthly E-Mail: [email protected] (305) 503-9077 Family Offices Set to Ramp Up Impact Investments When it comes to impact investing, it can seem that every family office talks about this strategy but few actually end up making investments. That attitude might be changing though, as a recent survey found that more than 40% of family offices expect to increase their allocations to sustainable or impact investments in the future. Of course, that could be just wishful thinking (or lip service to clients that ask their family office advisors to figure out how to make a positive social impact and a good return). But given the buzz that impact investments seem to have in the family office community, this UBS report likely speaks to a real trend in the industry.
These days it's hard to attend a family office industry conference or have a conversation with a family office without the subject of social impact or sustainable investing coming up. As a few of the family offices on stage at one of our events earlier this year in San Francisco attested, though, it's often easier said than done. Chief investment officers at family offices are typically tasked first and foremost with generating strong returns from their portfolios. As one of the CIOs on stage said, his job is to make money for the family and that's the bottom line.
In other words, if there are two investments and one projects a worse financial return but a positive social impact, his job is to pick the investment projected to produce the best financial return, regardless of social impact (assuming, of course, it's not an illegal arms trade or something of a truly negative social impact). That puts CIOs in a bind: how do they cater to their clients desire for investing in positive social impact investments without sacrificing returns? It sounds like more family offices are at least willing to make an effort to allocate to impact investments.
A new report out Tuesday by UBS, the Switzerland-based financial services firm, and Campden Wealth Research, an information provider, shows the number of family offices interested in sustainable investing has grown substantially, with 40% set to ramp up their sustainable investments in the future.
Sustainable investment products, which aim to deliver outsize returns and remedy societal and environmental ills, have grown at a rate of more than 33% between 2014 and 2016 in the US, according to data from the US SIF Foundation cited in a report by Morgan Stanley. The market for such products, as a result, has grown from $6.57 trillion to $8.72 trillion.
According to UBS' Global Family Office Report, which is based on a survey of senior staff from over 260 family offices across the world, family offices are paying more attention to how they can make money for their clients and tackle issues such as poverty and global warming...
...Millennials are the main catalyst for this spike in interest, according to the report. With millennials set to benefit from the largest intergenerational wealth shift in history in the coming years, family offices are starting to tailor their investments based on their preferences.
Source: http://www.businessinsider.com/ubs-report-on-family-offices-2017-9
5 | Family Office Monthly E-Mail: [email protected] (305) 503-9077
Finance Website Awards Bonderman Single Family Office Top Family Office Insider Monkey, a popular finance website, has recognized the single family office managing the fortune of TPG founder David Bonderman as one of the strongest performing family offices. The family office, Wildcat Capital is unique in that it primarily serves Mr. Bonderman as a single family office and also reports positions to the Securities and Exchange Commission. We don't often get to take a peek inside a single family office's portfolio so it's hard to say how other family offices would do by comparison. As readers will know, most family offices prefer the privacy and operate under the exemption from filing. That said, it doesn't look like Wildcat Capital has anything in their publicly-reported positions to hide--as Insider Monkey notes, the family office has vastly outperformed the averages and even taken on the unusually public position for a family office of becoming an activist investor. The family office is led by Leonard Potter and Drew Tarlow.
Family offices are much more secretive compared to hedge funds. While hedge funds have many clients and have to provide information about their activity and sometimes explain their investments, family offices manage only the money of a family and some of its key employees. As hedge funds have been underperforming the market on average lately, many of them chose to convert to family offices and return outside investor capital. At the same time, there are many money managers and banks that offer multi-family offices, managing the wealth of hundreds of families (take a look at the 11 biggest family offices in the world), but the most interesting ones to watch are the family offices that manage the wealth of individual families.
One such family office is Wildcat Capital, which is led by Leonard A. Potter and Drew Tarlow. Wildcat Capital manages around $1.80 billion for the family of billionaire David Bonderman, the founding partner of private equity firm TPG Capital. Bonderman has a net worth of around $2.5 billion and Wildcat probably played a major role in building this figure, based on its returns. According to our calculations, which take into account a fund’s investments worth over $1.0 billion from its 13F filings, Wildcat Capital returned 31% in the second quarter alone and was up by 99.5% in the first six months of 2017. Moreover, Wildcat’s picks generated a weighted average return of 118% during the last four quarters, according to our estimates.
This shows that if a smaller investor followed Wildcat Capital’s stock picks, they would’ve outperformed the market by a huge margin. In fact, in May we published an article where we discussed the fund and its stellar 52% first-quarter return. Judging by its similarly strong performance during the second-quarter, it’s not too late to jump in and look into Wildcat’s investments...
...Bonderman’s family office, Wildcat Capital, is led by Leonard A. Potter, who has served as President and CEO of the fund since its inception in 2011. Potter is also the CEO of Infinity Q Capital, an investment advisor launched by Wildcat in 2014. Prior to joining Wildcat, Potter had worked as a consultant to billionaire George Soros’ Soros Fund Management since 2008, which he joined after having worked as a Managing Director at Soros’ Soros Private Equity since 2005. Potter has a long resume of key management positions at many financial companies and is a board member on several public and private companies.
Read the full story at Insider Monkey: http://www.insidermonkey.com/blog/wildcat-capital-drew-tarlow-len-potter-family- office-of-the-year-596752/?singlepage=1
6 | Family Office Monthly E-Mail: [email protected] (305) 503-9077
ACCESS THOUSANDS OF FAMILY OFFICE RELATIONSHIPS
The team at the Family Office Club has put together a powerful combination of resources for professionals looking to raise capital from institutional and family office investors. The Institutional Capital Raising and Conference Package includes all of our investor databases, as well as access to our quarterly family office networking summits, educational webinars, and 5 professional designation programs offered by the Finance Training Society.
What’s all included in this package?
1 Multi-Family Office Database (1,000+ Firms)
2 Single Family Office Database (500+ Firms)
3 HNW Wealth Management Firms & Private Banks (925 Firms)
4 Merchant & Investment Banks (405 Firms)
5 Fund of Funds (350 Firms)
6 Institutional Investment Consultants (225 Firms)
7 Endowments & Pension Funds (650 Firms)
8 Library of Educational Webinars (More Information at http://FamilyOffices.com/Webinars) BONUS: Two 12-Month VIP Passes to all our Family Office Summits (More information at http://Wilson- Conferences.com) - $5,500 Bonus Value
BONUS: Master’s Certificate in Finance & Investments Training Package (More information at http://Finan- ceTraining.com/Masters) - $1,985 Bonus Value
Order today: http://FamilyOfficeDatabases.com/Family-Office-Database
SINGLE FAMILY OFFICE MANAGEMENT
At Single Family Office Management, we provide hands-on assistance in launching, managing, and improving your single family office.
If you are seeking help forming a single family office or want expert support for your existing family office, visit http://SingleFamilyOffice. com or call (305) 333-1155 to speak with an experienced single family office advisor.
7 | Family Office Monthly potentially higher pay than some investment and finance jobs. It's not just single family offices hiring, many private
3.) Broaden Your Geographic Scope: In most of the financial centers, like London, Manhattan, Chicago, etc. it can be easy to find a number of potential employers in the investment and finance sectors. But even in these top cities it can
(305) 503-9077
UBS Report: It Pays to Work for a Family Office These Days There are a lot of benefits to working at a family office over a traditional Wall Street or corporate job, namely, more flexible hours, more autonomy, less bureaucracy, less workplace pressures, and, depending on the family, generally more enjoyment than some of the more grueling traditional jobs. Better pay is not usually one of the benefits espoused by those who prefer jumping ship to family offices. Sure, some family offices pay considerably well, but there are many family office executives who took the leap knowing they were leaving a far heavier paycheck on the desk at their previous firm. When you consider that a typical family office CIO could work at a hedge fund or private equity and participate in carried interest-linked compensation, there's definitely a lure to working at a fund instead of a family office where you manage internal capital and not every family office is so generous in tying your performance managing the portfolio to substantial bonuses or profit sharing.
But as the family office industry grows, it appears that family office executives are starting to see growth in their respective bank accounts, too. At least that's the rub from a recent UBS study:
As the number of ultra-high-net worth people swells, so too does the pay for those who oversee their assets.
C-suite pay at family offices, firms that manage the wealth of the very rich, is surging, according to a report by UBS Group AG and researcher Campden Wealth. The average base salary for a chief executive officer jumped almost 10 percent to $367,000 this year from 2016, while chief investment officers got an increase of 8 percent to $314,000.
It looks like they’re earning their keep as family office investment returns rebounded last year. Returns averaged 7 percent in 2016, compared with 0.3 percent the year before, according to the report, issued Tuesday. The gains were strongest among North American firms, which had less money invested in real-estate than their international counterparts.
“The rebound can largely be attributed to two factors, better performance in equity markets and improved returns due to allocation shifts,” Stewart Kesmodel, head of global family office for the Americas at UBS, said by email. With investors moving out of fixed income and hedge funds, “those dollars have flowed into private equity, operating companies and cash flow producing assets such real estate,” he said.
With bonuses, which can account for half of total pay, the average pay for a North American family office CEO totaled $631,000, the highest among geographic regions. European family office CEOs made $497,000.
As with much of the investment world, the best-paid executives are predominately male. Women accounted for only 7.7 percent of family office CEOs and 13.2 percent of CIOs. Women appeared more frequently as chief operations officers and chief financial officers.
Read the full article at Bloomberg: https://www.bloomberg.com/news/articles/2017-09-11/family-wealth-advisers-get- richer-right-along-with-their-clients
8 | Family Office Monthly E-Mail: Clients@FamilyOffice .com (305) 503-9077 Four Job Openings with $1 Billion+ Family Offices in New York and Boston
I wanted to introduce myself as the President of our Family Office Executive Search firm. Family Office Executive Search is a recruiting firm that engages with single and multi-family offices to help them find talent for their teams. This month we have signed two new engagements to fill four job openings, for a $10B+ multi-family office in New York and a $1B+ family office in Boston. You can see these positions available on http://FamilyOfficeJobs.com and here are direct links to the position descriptions in case you want to send in your resume and apply to be considered for them:
1) Family Office Executive Leader Opportunity: http://FamilyOfficeJobs.com/Executive-Leadership-Position
2) Investment Advisor Associate Opportunity: http://FamilyOfficeJobs.com/Investment-Advisor-Associate
3) Wealth Planning Associate Opportunity: http://FamilyOfficeJobs.com/Wealth-Planning-Associate
4) Investment Analyst Opportunity: http://FamilyOfficeJobs.com/Family-Office-Investment-Analyst
5) Family Office Executive: http://FamilyOfficeJobs.com/Family-Office-Executive If you are interested in these positions, the first step would be to complete the application form at the bottom of any of the open position links in this email; if we see a relatively good match we will get in touch. Since we have had 900 resumes submitted to-date in the last year for positions we have helped fill, we cannot respond to everyone. But even if there is not an immediate fit, we will do our best to keep in touch and retain your resume on file for future family office mandates.
Of course if you run a single or multi-family office and you would like to access our talent pool of over 100,000 family office professionals that are in our database globally you can contact me regarding that as well - we are a fast moving team and we would be happy to discuss how to work together.
Thank you for keeping us in mind here and please check http://FamilyOfficeJobs.com in the future for new positions being posted.
Terry Terry Penn (407) 369-9130 President Family Office Executive Search [email protected] 328 Crandon Blvd. Suite #223 Key Biscayne, Florida 33149 http://FamilyOfficeJobs.com Want to hear about jobs before other candidates? Sign up to receive family office job alerts by entering your e-mail address on this form: www.FamilyOfficeJobs.com/Alerts
9| Family Office Monthly E-Mail: [email protected] (305) 503-9077 Family Office-Backed Russian Shoe Retailer Eyes IPO There aren't many events as exciting for an early investor in a company as a major initial public offering. Billionaire Russian magnate Mikhail Prokhorov is due to benefit when Obuv Rossii goes forward with its IPO seeking to raise $120 million as he reportedly owns a quarter of the company. But Prokhorov won't be selling during the IPO, according to Bloomberg. The company will offer a stake of as much as 40% on the Moscow Exchange. There hasn't been an IPO on the exchange since the first quarter of 2017. Mr. Prokhorov is perhaps best known in the U.S. for his purchase of the Brooklyn Nets. Although most NBA franchises are seen as exceptionally good investments these days (Leslie Alexander just sold the Houston Rockets for $2.2 billion), there have been various reports that the Russian billionaire would like to reduce or completely sell off his stake in the Nets, which has proved to be one of the league's worst teams in recent years despite a high payroll. We'll see if Obuv Rossii ends up being a win for the billionaire (something elusive to his NBA team.)
“When a decade ago I heard at an industry conference that handset retailers are selling phones -- even the cheaper ones -- on credit to boost sales, I thought, why not do it with shoes?” Obuv Rossii founder and Chief Executive Officer Anton Titov said in an interview in which he declined to comment on any IPO plans. “At first, banks treated us as if we were maniacs, saying this won’t work with shoes. But it did.”
Prokhorov, who built his $11 billion fortune initially through metals and now owns interests from banking to energy to sports, bought his stake in Obuv Rossii in December through his family office. His Renaissance Capital is among the investment banks managing the shoe chain’s IPO, along with BCS Global Markets, Citigroup and Sberbank CIB.
A spokesman for Prokhorov’s investment vehicle Onexim Group said Obuv Rossii was a private investment for the billionaire and declined to comment further.
When he decided to offer installments, Titov first started joint projects with lenders, enabling the company to offer customers interest-free loans. After banks tightened scoring procedures and cut down on lending after the 2008 financial crisis, Obuv Rossii started providing installments to consumers itself.
“About 80 percent of our customers are women inclined to impulse purchases -- they come to a store to buy shoes, and then they see a nice bag and want a belt also,” Titov said. “That’s where our installments program steps in.”
Obuv Rossii’s customers can generally afford buying its midprice shoes without credit, according to Titov. “So, our installments are rather a matter of marketing and winning consumer loyalty,” he said.
Source: https://www.bloomberg.com/news/articles/2017-09-25/russian-retailer-backed-by-brooklyn-nets- billionaire-weighs-ip0
10 | Family Office Monthly E-Mail: Clients@FamilyOffice .com (305) 503-9077 Wealthy Chinese Families Look to Invest Beyond Asia Chinese families are increasingly looking beyond Asia when it comes to their investments. A new report by UBS suggests the younger generation of ultra-wealthy Asian families are already impacting the way family offices invest. According to Enrico Mattoli, head of global family office in Greater China at UBS Wealth Management, "family offices in China are characterized by younger entrepreneurs or 'new wealth,' who are more likely to be oriented towards growth than asset preservation." Another interesting revelation about Asian families in UBS's Global Family Office Report 2017 is that these investors are now taking a shine to European real estate. The Brexit turmoil has eaten away at prices of real estate assets in London and other major European cities, which long-term minded family offices seem to view as a unique buying opportunity.
He expects to see asset allocation favoring equities, private equity and real estate in the Greater China portfolios, as these assets provide attractive long term returns.
According to the report, family offices in Hong Kong and China have an exceptionally high allocation in real estate compared to other regions. In 2016, about 26% of Greater China portfolios were invested in real estate, versus 20.3% of family offices in the Asia-Pacific and 16.2% of family offices globally.
Meanwhile, equities accounted for 21.2% of the Greater China portfolios, while private equity investments, including direct venture capital and private equity, co-investing, and private equity funds, took up 13.7%. Cash holdings stood at 12.4%.
The research also found that succession planning is a key priority in Asia-Pacific, as 48.4% of the region's rich families are developing succession plans.
In line with the trend, there is a greater emphasis on the grooming, training and development of the next generation to take over the family business as compared to other regions.
"The next generations of Asian families have a much greater level of involvement in the family office compared to other regions," said Edith Ang, executive director of Family Advisory Group at Asia Pacific, UBS Wealth Management.
Read the full story at http://www.thisisinsider.com/rich-chinese-families-brexit-foreign-investment-2017-9 PODCAST EPISODE: The Difference Between a Half-Formed and Fully-Formed Family Office On a recent episode of the Family Office Podcast, we distinguish between a half or partially-formed family office and a fully-formed family office. http://FamilyOffices.com/difference-half-fully-formed-family-office
Be sure to subscribe to the Family Office Podcast for more lessons on working with family offices: http://FamilyOfficePodcast.com