Family offices are growing in number and assets wherever you look!
In every one of the world’s financial centers, a new type of financial institution is playing an increasingly dominant role in the world of private wealth management: the family office.
The first thing to consider when understanding the rise of the family office is what they are. As the name suggests, a family office is a private advisory firm set up by an ultra-high-net-worth (UHNW) individual to manage their investment portfolios and generally cater to their financial and legal needs on a day-to-day basis.
How can you build relationships with family offices?
Every year, more and more private wealth is invested by individuals through their family offices and this means that investors and entrepreneurs who rely on private finance have to start engaging with what is a burgeoning sector. Of course, the need for confidentiality represents an obstacle for those looking to engage with family offices; not only do they rarely publish details of forthcoming deals but they rarely accept meetings from unknown entities.
Consequently, you need to take a different approach when it comes to building a relationship with a family office. It might sound time consuming, but networking with office staff is an absolutely integral part of setting up a significant arrangement, financial or otherwise.
However, with family offices increasingly looking to alternative investments in pursuit of higher returns, I have no doubt that the sector’s growth will present opportunities for those offering bespoke solutions. First though, one needs to ingratiate themselves with what is a growing community.
Due to the increased privacy and control they allow, family offices are becoming more and more common among the ranks of the ultra-wealthy. Consequently, it’s important that both wealth managers and entrepreneurs start adjusting to reflect the increasingly essential role that family offices are set to play going forward.
It pays to be charitable: Philanthropy is important to the vast majority of family offices.Most of these families have a cause or causes they support, which includes often not just giving money but also attending events.Galas or private donor events are often frequented by family office investors.If you are running a company in a space where there is a successful disease foundation, get involved in the foundation both as a source of credibility but also as a means of meeting investors who are most likely to have a passion for the product that are you developing.Sometimes there are situations where the foundation has an economic incentive to introduce you to their donors.Attending the galas, but not being a pushy deal promoter is critical.Even charities not connected to the life sciences often have family office investors, most of whom have some connection to a medical related charity.It is not hard to figure out the big donors in each charity as most publish this list.
Alma Mater network: Undergraduate and/or graduate degrees are more than just pieces of paper to hang on a wall.They are also vast networks of alumni many of whom are doing very interesting things.Some of these alumni have been very successful and choose to give back to their schools in gratitude for helping them get their start.Most universities have online alumni directories and local alumni clubs as well as annual homecomings and reunions.These online and offline resources are opportunities to establish relationships with family office investors.Moreover, they are more likely to be predisposed to invest because of that common connection.The more involved you are as an alum and the more “right” events that you attend, the better your odds of success to meet investors.
Join a Club/Get invited to a Club: This might be a bit old fashioned, but family office investors are often members of various golf, tennis, social and other clubs. While never the primary objective of joining a club, many business deals get done between members of these clubs.In many ways it signals that you are on the inside and one of them when doing a deal rather than an outsider who is asking for money.Playing golf, while seemingly anachronistic, has benefits in building relationships with family offices.If you belong to a nice club that would attract other investors to want to play with you, that can be a magnet to build these relationships.
"I am on the Golf course every weekend, doing more business than I do on a average week"
Consiglieri: Everyone has a circle of people that they trust.Families are not only no different, they are more intense about dealing with people they trust.They often have gatekeepers, confidants and trusted advisors who they rely on to both bring them deals as well as vet the deals they see.Wealth management professionals (multi-family offices and private bankers), accountants, estate attorneys, and family office professionals (in a single-family office who are not members of the family) all play this role.While the family member might want to be invisible, their network of advisors is how they often interact with the world.Getting in with one of these people is often the path to meeting the wealth creator or decision-maker in the family unit.
Hire a well-connected connector: This is a tricky space with almost everyone posing as a family office connector with their hands out for a percentage of the deal in cash and stock.Many professionals at single or multi-family offices do this in their spare time introducing clients to their friends in the network.Some of these people are quite well connected and highly successful at raising capital by these means.Before one engages such a connector, be sure to call references and speak to investors who have successfully invested in one of their deals to get the proper perspective.This has the potential to be the quickest and most powerful way to raise capital but also is full of the most pitfalls.Be prepared to also pay higher than usual placement fees for this service since this market is so fragmented and difficult to access.
Conferences: Family office conferences are great places to meet new family offices, and are particularly useful for finding out what areas they specialize in. I have the 10th Global Family Office Summit commint up in Dubai. As it is the 10th Anviversary we expect over 400+ Elite Family Offices, with a total delegation of 600+ Prominent Conglomerate Business Owners, Sheikhs, Royal Families, Private Investment Companies, International Business Moguls, Sovereign Wealth Funds, & industry professionals from across the Middle East and around the globe are scheduled to attend, representing over $4 trillion in investor wealth and making it the world's largest and most exclusive gathering of elite family office decision makers, with an investor delegate ratio of 5:1. Please see a reviewvideo from 9th Global Family Office Summit Monacohttps://www.youtube.com/watch?v=R7CBqoWa2mk&t=1s
Happy to send an invitation to this rare opportunity - Feel free to drop me a message.
Have a good week.
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