A client's grown daughter was told to build her own life before joining the family business.

[27:13]

"the daughter, grown daughter mid mid-20s, of one of my large clients came to me and said: look, mom wants me to quit, then join her on our philanthropic and private investment business. And I said I don't think it's a good idea. I think you need to build your own life, your own career,"

[32:07]

"If you look at a family that's made them in a certain sector, like a lot of real estate families, you'll still find that 80% of their assets are in real estate and it might be so concentrated that it's real estate in uptown Manhattan."

[34:34]

"We we don't do more than 1% in any investment in which we're passive for any direct deal to reco investment: 1% where your passive. If you're active different story. But 1% is our limit."

Full transcript

I would like to invite up our final panelist to the stage. Real quick, is are coming up. One event that most people don't know we host is called capital con. We only do it once a year and if you've ever seen TED talks, a real short 1015 minute talks in capital con is where we get 20 to 30 professionals on stage who have all raised 100 million dollars plus in their career and they get 10 minutes to tell you their biggest secret to how they raised 100 million dollars plus.

And that's a one-day event. It's only stand-alones. We don't have any discussion panels, there's just rapid-fire ideas from 20, 25 different brains that are veterans and raising capital, and if you think about how much time it would take you to go and find those people, figure out who they are, invite them all to have a half hour, a cup of coffee. You're getting 30 hours up to your time and that's to seven hours of that day and a ton of ideas to be able to use.

That's also the point of this event: 75 investors on stage over the two days. They actually get family offices to reply to your emails and phone calls, we know how hard that is, and then get them to actually show up and be at the coffee meeting with you and pick their brain and hear what they're investing in. You know, I probably take you a hundred hours to get those meetings booked and another 30 to actually sit down and have a cup of coffee with them. And that's what we're trying to simulate for you over the day and a half for this panel we're really trying to focus on.

You know, billion dollar-plus multifamily offices give you their perspective day to day. Many of you have something where, if you could just get one or two multifamily offices on board every time their client list grows, your allocation might grow from them. Other of you have gotten wealth management firms as clients but not in multifamily office yet, and many of you may not have ever met with that multifamily office before. That's a billion dollars plus.

So hearing about how institutionalized they are is going to be part of this panel as well. So, Jonathan, I'm glad to have you back speaking with us again today. Can you maybe introduce yourself first? Well, go down the line. It's just a quick, quick intro each. Thank you, Richard.

I'm Jonathan Bergman. I'm the president of tag associates. We are a New York City based multifamily office. We oversee more than eight billion dollars for about 110 families. I'll do the math for you at seventy five million dollars per family. We have two service offerings.

One is portfolio management, allocating to external unaffiliated money managers, and of our eight billion, more than one-third is all is in alternative investments. The other side of our house is family office services, where we provide bookkeeping and bill payment and taxes, estate planning, aircraft and aviation management, property management to our families. So we effectively function as a single family office to a hundred ten families. Our clients are generally high-net-worth and single family offices that use us for infrastructure.

Great, and Julie's our next speaker. She was supportive the first year we came to Miami. We did a 350 person super summit and then it grew a bit larger each year, but she was really helpful in helping us get oriented here in Miami, want to moved the offices here. So if you want to introduce yourself, sure can you hear me.

Okay, great. First of all, congratulation to Richard Wilson. As he just said, he started this first inaugural event with 350, and I think you said you're up to 850, and just the diversity of the group that's here, the content, the, the energy, is truly amazing. So congratulations, Richard, very proud of you again. I'm Julie Knights. All I'm a partner with we family offices.

We're one of the largest family offices here in in Miami. We work with 70 families. Half of them are us, half of them are non-us. We advise on over 12 billion dollars of family capital. We have about 50 professionals that work in our firm between our offices in Miami and New York. I've been involved in the family office area for over 20 years.

I started and ran a single family office and then for the last 15 or so years, I've really dedicated my time and effort to the multi-family office sector, which continues to evolve. In the work that we do, we work very closely with our families on their investment planning areas, but also holistically around financial wealth transfer, planning, tax matters, family philanthropy and governance. Thank you, Richard. Thank you, and our next speaker is a peer who might have seen it a pass super summit.

He was one to have the quote of. You know, in the last couple years I don't think I've ever done a deal with somebody I didn't already know. You know for a long time. Also, I want to point out that they recently rebranded their firm and when we have the one-liners on stage, some people actually take action on that and create a one-liner.

Maybe some just don't want to or don't think it matters. But what's even more resistant of people is changing their branding. They're like: no, I like my, my Greek god name, or Wilson Capital, but no one knows what you do. Or ABC Capital and no one knows what you do, etc. And nobody wants to change it because they've raised eight million dollars or 92 million dollars and everyone knows them as XYZ capital.

It's always an excuse. My god, my partner will never approve that. But Sarah T partners change their brand because the initials of their brand was about the founder of the firm. But they decided: you know what. It means a lot to us and we respect them, but it doesn't communicate our values, doesn't communicate anything to our potential client.

That's transparent and apparent. And so, at ten billion dollars in assets with hundreds of clients, they decided to rebrand. So I think that takes the excuse off the table for new and thinks they're too far down the road to have a name that kind of helps you attract clients, Morris. I thought that was kind of a cool background story on Pierre, if you want to introduce yourself.

Thank you, Richard, and thank you for a fine advantage, Anna. Just to completely undo the money we spent on a branding agency to come up with that name, and my marketing person hates it when I say this, but you will never forget the name. If you remember, we took the sin out of sin, serenade. Don't repeat that when my marketing people are around, please.

Anyway, I spend about half of my week on Family Matters, private investments and the mechanics of the fact that I was born lucky and my mother's family and my father's family and and build a few companies and took the public on my own. But but that's about half of any given weight. The other half is spent as a partner and then significant equity owner in insanity partners. We're about 200 people in nine offices nationwide.

We manage about 26 billion for about 2,000 clients. If you do the math, I will tell you: don't look at that 10 million umber, look at 6.5 million. 95 percent of our clients are 5 and 10 million dollar guys and gals that are working hard in life, building their their careers, working in retirement, living through retirement. We got their back financially and that's what we do.

I run the family office practice within that group. We have about a hundred clients who have more than 100 million net worth, about a dozen who have more than a billion net worth. We provide a variety of family office services. Hope a lot of them were their private direct investments and I'll just get it out now. I will never introduce a private direct investment to a client.

That sort of breaks my fiduciary obligations. I feel as a fanatical fiduciary, but I do work with a lot of them to help them do with right, to get the right to structure together and so on. So that's me. Great thanks, Pierre. And Paul is one of the cofounders from twin focused capital, which is growing by about a billion dollars a year and I think is about 7.5 billion in assets.

Now, if I want to introduce yourself further, Paul, and just kind of describe what kind of differentiates your. A family office, sure, I don't know if I can compete with the sin and sincerity. We would take the dew shot. A fiduciary, it's a bad joke. I found it twin focus about 15 years ago. I was previously at UBS and I had a vision for you know, to create something different, special.

We work with about 40 families globally. We're one of the only firms that truly works with, can truly work with, global clients. We have an office in London as well. We're registered with the FCA and we work in Europe and throughout, and yeah, I mean very similar to a lot of these folks, we provide these families with a single family office solution.

70-plus percent of our clients are investment managers. So we work with a lot of private equity hedge fund, what kind of that, doctors, doctor in that respect. And then we work with a fair amount of entrepreneurs. So, as Richard said, he kind of understood me, were growing our business about one to two billion a year, adding four to six families globally, and you know it's an exciting time for family offices.

Great, thank you. And Candice has spoken a few times that our super summit has been helpful getting additional families and speakers to our event. So, if you own, introduce yourself, Candice, I am chief investment officer of Elle investments. We're a family office space between New York and Dubai, and I'm also chairman of Sal Sano group, which is so self-made Italian billionaire that's married into a billionaire family in Panama.

So it's somewhat of a merger between two families. And the family I'm CEO of we've got like a diverse asset allocation across hedge funds, private equity, fixed income and some oil and gas roles he trusts, and then the family I'm chairman of he does a lot of Direct Investing, so like that, great. So usually when I give these types of instructions, most of the panelists just ignore them. But if we can keep the answer to this first one just a couple words long, just to give the audience an idea, where do you spend 80% of your calendar time?

Where do you feel like the lion's share of your time is spent within your business? If you want to start, Jonathan, we can move down the line, sure? Well, I don't spend 80% of my time on any one activity and maybe breathing, but not even that high. You know I spend most of my time thinking about clients and but when I'm thinking about clients, I'm thinking about, you know, their unique situations, their problems and issues and ways to resolve them.

But I'm also thinking about their investment portfolios and then within that, I'm thinking about the investments on our, on our platform. You know it's about a hundred hundred fifty investments on our investment platform and in between that I'm spending time. I oversee the private equity, private debt portfolios at AG associates. So I spend time meeting with managers and doing diligence on direct deals and Co investments and private equity funds.

Great, Julie. I just want to add a little commentary about company names, seeing that you brought it up here. We started our firm seven years ago and and one of the most challenging things, and I've done this several times in my career, is coming up with a name for a business, and we stands for wealth enterprise, and the reason we selected that name is the types of families we work with. They've accumulated enough family wealth, enough family capital that it's like it is an enterprise, and so to help them apply the best practices of some of the most successful businesses that operate in the world is really the approach of how we we try to work with our families.

In specific response to your question, Richard, where do I spend 80 percent of my time? Well, because we work with families. It's a very dynamic activity. There is always something happening on any given day that's planned and unplanned with a client, so investment activity is fundamental to me. That's the economic foundation. That's key, critical for every one of our families that we work with, but there's a lot of other risk areas that also they need help with: whether its tax optimization, whether it's making sure that they have the proper personal estate planning and wealth transfer planning documents in place.

You can do an amazing job with investments, but if you have it on how taxes impact that investment portfolio or how the wealth is supposed to transfer most efficiently, you may miss an important opportunity and create a great risk for that investment portfolio. Great, thank you, dear. Trying to come up with an 80% numbers, not possible, but but I think, across both my sort of personal family side and and the business side, day job side, I think the biggest, the place I spend most time, which is inefficient and I wish I didn't, but I but I'd like to do it. Actually it's trying to respond to the number of people who call up and send the opportunity of some kind in a thoughtful way, while saying no, because I don't do a lot of these things, but I get a lot and I feel that I should at least try to be a little constructive in, in, in, not just say no goodbye or doctor, and I respond, and so that ends up being a lot of my time.

But. But the more valuable practical time is an adviser to a bunch of companies, both personally and and in the business side, where I am on the board as a board observer or, in a couple cases, an equity owner, helping people grow their businesses. That's my passion, okay, so, Paul, I guess nobody spends to 80 percent of their time on anything we're hearing so far. So what do you spend the most time on?

80 percent in an airplane, it's been 80 percent of my time in an airplane. Hopefully I have Wi-Fi now. In all seriousness, I I spend most of my time directing traffic. You know I think the the last presentation talking about delegating. You know, I think I've delegate pretty well. I've got a great team.

I empower them. But you know, being a CEO, you're, you know you're constantly kind of directing traffic and putting fires out. So you know, part of that is on the client side, part of that's on the HR side, part of that's on the investment side, but lots of directive traffic. Great, Candice, what do you spend the most time on?

Unfortunately, I get more than 500 emails a day from different managers pitching us or current managers that were invested in following up. So you know, these days I go. I wish we could go back to the days where we had fax machines because you didn't have so much daily incoming traffic. So I probably spend good 80% of my time because it's everyday, 500 emails onslaught and every night I've got to spend an hour, to last night I think I was up til 2:00 or 3:00 in the morning, just making sure I got through those 500 emails before I end of the day because our dinner ended late.

So that's definitely something that's consistent. Every day it's either going to those 500 emails or reading documents attached to those emails or doing conference calls managers. So I'd say that's a good 80% consistently. And then the other activities. You know they very. You've got to deal with accountants, lawyers, you're doing due diligence on something, but it's not every day.

So someone has a solution for how to get rid of those 500 emails. That would be amazing. Sure, I think many people here in the audience might be trying to attract the same type of quality clients that you're all have been able to attract and work with. So, in terms of kind of the life cycle of meeting a potential client until the client actually engages and become a client, what's kind of the normal period of gestation there where you have to get to know them?

You go to where they live, they come to your office, you have phone calls etc. A couple people in a comments on that time period so others in the room can see, for that level of a wealthy family, what should be expected. You know there's, there's no answer. I mean there's no. You know I I have. I had a client join us this year who I've been, who I met six and a half years ago and I've had a conversation with him at least annually, if not more more regularly.

I had a client who sold a business at the end of at. A prospect who sold the business at the end of August called me after Labor Day and signed an agreement in October and it was a nine figure account. You know it shouldn't be that easy and the other guys shouldn't be so damn hard. So there's no, there's no right answer and there's no, there's no right path.

But you know, sometimes there the truth is: is there a need, is there urgency? Right, the gentleman who sold the business was sitting with a 9 figure balance at a local bank. Right, he needed to move that money. He needed to get invested in. The S&P 500 went up every day and he was sweating because of it.

He needed to act. The the gentleman who's just signed with us after six and a half years. Basically it took his wife insisting that he hire us because he's in his mid to late seventies. He needs an outlet pass were the best outlet pass. But he didn't want to give up control. So we figured out a construct where he would not, he wouldn't necessarily see, he would seat a portion of the portfolio to us retain the rest of it, but we do oversight over everything.

So that appeased his spouse and made him comfortable as well. That took six and a half years. Okay, great. It would also want to comment on that. Actually, just the only other thing I might add to what Jonathan said is it's important to really cast a wide net of different perspective clients you're talking to, because the timing of when they make decisions is always uncertain.

I can tell you the extremes on my end with with my practice, says I had an individual come in last year, actually about this time. He had a trigger event, he needed to hire advisors and literally we met on one day and he said: will you put together an engagement agreement? And came back the next day and, and that was highly unusual, we checked him out. Sure, there wasn't you know anything funny going on there, but it was a very credible and serious individual.

And then the other extreme is I recently did some work over the course of this year for somebody that I did work for 20 years ago. So you know the the timing of when people make decisions is is is varied, but I'll agree with what Jonathan said, if there's a need, there's a trigger event, there's a call to action, that's typically when they're gonna make that decision to work with you. Sure, okay, and for Paul or Pierre, what do you think is the best question? If there's a private investor here, angel investor, they're looking to engage a multi-family office, what's the smartest question that someone could ask a multi-family office that they're vetting where you know, if you had to make sure you ask one question during that interview process and you're meeting with you know three to four different multifamily offices, you know what's a smart question?

That everybody should be asking, or most, most should be asking but most your clients don't know to ask it. But you know what help kind of weed out some providers in the marketplace perhaps, yeah, so I think I think the absolute wrong question to ask a family office adviser, and I'll start there, is: let me see your performance. You know, for us work with a lot of investment managers. So as much as I would like to take their performance track record and call it my own, it wouldn't be fair.

And you know we, a lot of our clients, come to us with legacy investments and we don't tell them: sell your and buy my. You know we kind of do the work on what they own, you know. Just to dovetail on the last question, I mean, people do business with people like themselves, right, people do business with people they like. You know, for us we don't try to be all things to all people and we actually encourage our respective clients.

When they come in we say: go meet with all the competition and in fact I'll give you a list of the ones that I think are the best, because when you come back I want you to know what you got. And so, in terms of the right question to ask: show me the work, show me the memos you write, show me the actual work, the work product that you deliver to your clients, right? I remember being on a phone call with you, you know, on a train ride recently. There is a hundred million dollar family and they said what they wanted and it was just kind of a strange request.

You're like: yeah, that's not us. So you know, happy to keep in touch, but don't have to be all things to all people, and you know I've gotten better at this is my business. When you start out, you know you got to pay for the analyst, the Bloomberg, you take any, anybody, and small clients, big clients, big pain-in-the-ass, small bean, yes. And today you know we're much, much more selective because I like to say that we've only got so many seats on our bus.

I don't discount our fees. If you want to discount, go someplace else. I know you'll be back and I know what it cost to do it right. So, and once you discount, you just never get it back. So anyone else want to comment on the best question for an investor to ask an MF? Oh, they might be meeting with, they're vetting.

I guess I would just maybe amplify a little bit what you said. Coming to the table, coming to the first meeting with an understanding of what it is, you will what you're looking for and it's not a simple answer. It's not returns, as you just mentioned, it's. It's not, I just need to get my taxes done properly, or tax strategy.

I spent a lot of time working with potential clients to understand what it is they really do need and how we might be able to or maybe not. We do not take a bunch of clients, so understanding, thinking really thoughtfully about what you are looking for before you come in it can be very helpful. A lot of times that changes, right. You, you walk in the door, think you know.

I have a friend, I mentioned this yesterday, a friend that says your tag line should be twin focus. You come for the financial advice but you stay for the little situations you know. So it changes. You know. You walk in the door, you think you want some fancy portfolio and in the end of the day, you really need your problem solved.

And then, of course, it evolves over time. Five, 10, 20 years later, your needs are different, what you're looking for is different, your kids are in the picture, maybe as adults, and so on. So, yeah, you need to find that flexibility and you need to understand what your what you're looking for as best you can now, but expect it to change and evolve. As you said, there's a cost to do it right.

I had, I had a recent client that signed up and before he signed up he said to me: what am I missing, what? What should I be asking or what am I discounting? I said, frankly, you're discounting the cost to do this right, right? So, canvas, I know you're in touch with and have a network of probably a hundred billion dollar-plus families because you're well, you know you're well connected.

So what have you learned is key and central to building genuine relationships: getting to know them and who do you see them doing business with and why. If you can provide any advice or insights for the audience here today on that, sure, I mean, I think a lot of things with families come down to trust and building a relationship and I think that takes time and you know everyone wants to come up to have for someone and pitch them and I'd say, try to build a relationship first, because if someone has a net worth of over a billion dollars. They're probably getting pitched by thousands of people. So you really have to get to know them as a person and and build that relationship and build the trust.

And I think people generally do people business, people who they like, so as much as we all. We can all around the numbers, we can all have an Allah, look at the IRS and the returns, but at the end of the day, there's something more so, tarik, where when someone likes someone and they trust them and they trust their ethics and they trust their values and they know them well and our family office, we've done business with people. We know them and we know their parents. We've Cohen vested with other very well-known billionaire families, but we knew them for two years before we ever Koko invested with them.

So I think I think that's really the key. You know. Takeaway is: this is a relationship business and you know you don't want to rush into something you know it's. You know, try to get married. Don't try to sleep with the goal in the first night, Julie. What I would add, also to what Candice said is be authentic.

You know, at the end of the day, Trust is important, but people are really, your clients are looking for opinions and advice and guidance. They don't want, yes, people. They will respect you more if you your point of view is, and you have to have courage sometimes to disagree with them, because I work with many strong entrepreneurial clients. I work with clients that are successful billionaires in their own right and and, honestly, you have to have the courage to to be straightforward in terms of your point of view and why you think something may or may not make sense for them and not be fearful of confronting them on an issue in a respectful way.

I endorse that opinion 100% and that not only applies to clients. That applies to prospects and that's how the prospect is going to get to know you, because there are plenty of well-dressed, yes, men out there, but in the end they'll, all they want is your fee and they'll let you drive off the cliff and I'm not going to let you drive off the cliff. I may disagree with you, I'll try to do it politely, I'll attempt to do it logically, but but I'm not going to let you make a mistake and I'll tell clients that, and prospects that, 24 hours a day. I actually recently had a prospective client that spent two years doing due diligence on us and, like every firm in the country and at large half a billion dollar family, and he came back to me after two years and he said: I'm hiring you guys because, number one, you guys do more work than anyone else.

And he said: number two, he said: you ever see that, that movie, pretty woman? Yep, he said you know that scene where Richard Gere goes back into the store with Julia Roberts. And he says: I need more kiss ass, because every firm I went to they were kissing my ass. And he said: you know, you told me two years ago that I had all these horrible ideas about restaurants and you know, and you know all these, this hedge fund portfolio I had.

And, and yeah, I remember two years. Ii said: 'you know, I built this great hedge fund portfolio with this manager in New York and I said: you know you're trying to help perform the SP. She just put the money in the SP and he looked at me, said: you gonna charge me the same amount of money. Put the money in the SP at the vanguard.

Yep, well, today he became a client and we sold all the hedge funds. We actually just put all the money in the SP, not all of it, but a good chunk of it. But he, you know, he appreciated the no BS approach and you know to your point. You know whether a prospective client or it's a client, they're eventually going to find out the truth and you know you got to do it politely.

You know you can't tell them. They're idiots. But even though you make it, you know I had a friend that once said to me: Paul, you remind me of, you know the parent and the front seat that's driving where you have your clients in the back seat with the fake steering wheel. I mean I think ironically it's dreams that what are you're saying?

Some might feel uncomfortable, like a borderline route, or you're gonna get. You know that's gonna hurt the relationship. It might be the most valuable thing that you could give to them. So the thing is kind of counterintuitive. Just give you a quick example of that it was. It wasn't an uncomfortable comment, but the daughter, grown daughter mid mid-20s, of one of my large clients came to me and said: look, mom wants me to quit, then join her on our philanthropic and private investment business.

And I said I don't think it's a good idea. I think you need to build your own life, your own career, as you stopped now at 26 and join your mom games over in some sense. And then I had to get on the phone call. I called up mom immediately and said: mom, your daughter called. I understand you're talking about this with her.

I don't really think it's right thing for her. I'm sorry but you gotta do that, you gotta, you gotta keep from off a cliff. So, uh, does anyone else have a counterintuitive lesson for that one that we just talked about? That's something that maybe other people grow in a multi-family office or wealth management firm or an investment management practice to learn the hard way over a decade, and something that's counterintuitive about either attracting clients, adding value to them, working with them, growing your firm, you know, to such a large size over time.

One of the I've had, I've had the good fortune of having really great clients and and many great opportunities. But one of the more memorable meetings that I had with one of my clients was a younger client, an inheritor of a meaningful inheritance, and we were working on trying to understand her spending her and do some financial planning and what became very apparent is the spend rate that she was. Her run rate of spending was very high and we did a. We did a capital sufficiency analysis, a Monte Carlo simulation that basically pointed to the fact this client was 34, that she kept spending at current rate.

She was going to deplete her liquid assets in about ten years. Now that's a really hard message to deliver to a client, but it was a really important message. I still remember her crying during the meeting when the realization hit her that, wow, I'm heading down a path that's not going to be a good path for me, and, but again, you have to have the courage to, you know, respectfully, deliver this information so that the client can make an informed decision of how she's living her financial life. And sure enough, she started using a personal budgeting tool.

I don't know how many of you are familiar with wwe.com, which is a really great little tool that will link into your, your checking account, your credit cards, and, and she turned the corner on her spending and, and so that was very profound. That meeting was probably ten or fifteen years ago and I still very, very vividly remember that conversation. Great, thank you. All right, so we're gonna open it up for questions from the audience.

If you want to start running a microphone or two to people who want to raise your hand, we'll get that headed over towards you. JJ is coming there. I do. London. I noticed a lot of the family offices I deal with in Europe who are like 200, 100, 300 year old. I look at investing multi-currency, multi-country.

I don't hear that at all from from you guys. Are you seeing that at all in the United States? Look, I would say there is a bias for families wherever they are in the world, and they especially in America. They tend to have more assets in America, I think, if you're an American family, because on the alternative and Smit landscape most of the fund managers are still us-based.

So there might be some Europe private equity funds in, etc. But if you look at the capital under management in the in the fund management industry, it's probably 80% still based in America. I remember I went to Hong Kong once to look at Asian managers as a while ago, is it maybe 10 years ago, and there weren't a lot of very large managers over there. So you know.

So I think when you're investing in the financial industry, there is a bias and you're going to be over allocated to the US. And if you're a u.s. Family, a lot of families don't have foreign exposure. Partly it's because the legal regulation and the environment services they don't understand it. So you know families hear horror stories of when people who invest in Argentina or when the oligarchs took over Russia and if you co invested there, then the government repossessed your assets and you were pretty much out of luck, and people in the public markets who invent that invested in Yukos.

They had a similar experience. So because of those type of experiences, families have become risk averse to regulatory environments and governance environments that they that don't match the level you have, say, in the United States and Europe, and that's led to them just to have a concentration and I'd say even beyond that. If you look at a family that's made them in a certain sector, like a lot of real estate families, you'll still find that 80% of their assets are in real estate and it might be so concentrated that it's real estate in uptown Manhattan. So it's really not diversified and I think that's something that a lot of American families really need to think about, because you do want to have, we live in a global economy and there are so many geopolitical risks and you really do want to have diversification globally across jurisdictions, but it takes a lot of effort to get that portfolio that is diversified.

So the family I work for, and one of the things I work for, he is fairly diversified globally. But it takes a lot of effort on our end because you're dealing with with different regulatory environments and you have to analyze different risks in in different ways than you do if you're just us focused. I think. I think it's a just real quick.

I think it's a huge UK and Europe thing just because you know the countries are so close, you're used to different currencies. Our US clients we're, you know we're 30, 40 % globally diversified. But we just took on a mandate from a you know kind of a famous like rock star guy and the, the trust, showed up at our door a couple months ago and ace were specific: they wanted a third in UK and 2/3 a euro. Right, and so we, you know we had to develop a solution around that.

Think through which products were appropriate and taken to account taxes and everything else. So great, thank you. Question on the backend and thank you very much for your insights. Quick question for family offices: don't want to start investing or being more active on direct investments. Could you share with? Can you share with us?

Let's say how much on an asset allocation perspective one should allocate to liquid assets and to direct investments. Let's say, on your views, let's say words, that sweet spot. Well, certainly you have to start with understanding the cash flow needs. Much like your client who is spending too much money, you gotta have enough money, not in those private investments, cuz you got to assume they're worth nothing forever once you've put that money in an illiquid private direct deal.

So you got to make sure you understand your cash flows and you have more than enough to survive the crisis of whatever might happen in the next 10, 20, 30 years in your life. After that, I would still argue that it probably should be a pretty, pretty small fraction. You know I don't even wanna get a number, but but not large generally. I'll give you a number.

We we don't do more than 1% in any investment in which we're passive for any direct deal to reco investment: 1% where your passive. If you're active different story. But 1% is our limit. But again, it really depends client to client. The old saying: if you've met one family office, you met one family office, right, so some clients have.

We have a one of our largest families, Latin family has 80, 90 percent of their portfolio and pretty illiquid stuff, but they're making 150 million dollars a year and a big commodities business. So it said, you know everybody's different. Yeah, I agree and I think, um, you know, look, in terms of direct investments, you can co-invest with other families or you could Co invest with a private equity fund and you might be passive, you might be not be leading the effort, but you know you have a good amount of counterparty, you've got a reliable counterparty and you're confident that you're getting or you're invested in in real estate and there's distributions every year and you're getting cash flow. So I don't think you can make a hard and fast rule and say, oh, if we're not running the deal, we only want to put a small amount in because it might be more efficient and more effective, especially if you're starting a family office or a smaller family office or you've got a small team, which most family offices dirt 2, to utilize that and we co-invest with other families.

If we could trust the counterparty, we're happy for them to lead. And then the billionaire family in Panama that I work for, he's taken a few Co investor's into some things. He doesn't charge any fees, he covers all the expenses and he's just let other people participate with him. So I think you know, I think so long as the interests align and if it's another, when we've invested with other families, you know they haven't been charging us fees and stuff like that and another family invest with us, it's the same way.

So long as it's a structure like that where the interests are directly aligned, they think it's good if you trust the counterparty, that they're running the deal, because you might not have knowledge on that sector, so you know, but I think you still need to have at least you want to have some of your liquid portfolio in cash and then other liquid securities and you want to be diversified across, you know across the liquid spectrum as well. So you still want to keep at least on minimum and like at least I'd say, 10% in kind of liquid alternatives and have that diversified across you know, cash and other equities and other liquid alternatives. I've seen a big difference with my clients if they're worth a couple hundred million dollars and they're more likely to want control. If they're worth, you know, fifteen million dollars they might be okay with some more passive them but more in the public markets and trust their multifamily office to allocate for them and just focus on earning more money in their business.

But also if it's first generation, early second generation, many of those families are entrepreneurial DNA, want a bit more control. If it's third or fourth generation they don't want to lose grandpa's money and they diversify for the extended family a bit more often. But I've also seen that when it's not public market but maybe the company's doing 50 million, 100 million a year in revenue and it's a 30 year old company, even a family that wants control. If they see it's a hundred million dollar a year company and you know ten, twenty million.

But some families can get their brains around. Okay, that's a high quality company. I see them growing to an exit and sometimes families make an exception on that. We're running out of time here and I actually didn't ask a single question. I think that we were supposed to ask on the panel, cuz I just was curious about your thoughts on this other question.

So I want to give each panel is time to say some of the thoughts you might have prepared on one of the questions, or a final thought or something you wanted to emphasize with, like some notes you might have taken in preparing for the panel today, to kind of leave the audience with one last comment before we wrap it up, as anyone on the panel want to start with a. With that last comment I'll give you my take over the next ten years. I want to take equity risk and, Ben and just with my risk assets, I'm pushing more toward private investments. I'm pushing more toward single investments, alpha generative.

I don't want as much financial market risk over the next 10 years as I've had over the last 10 years. So I'm pushing on to private equity and pushing more into Co investments and direct deals, where I believe the drivers of return are not now defined by the financial markets, which I think is a relatively unique for a multi-family office. Right, I mean a lot of people rely upon private equity fund managers, but emphasizing a lot of energy, ongoing directs, I mean for most multifamily offices they leverage the fund manager platforms and it's more efficient to do so. Right, it's certainly more efficient, but but we think they're better returns in the more select deals.

Okay, great, Julie, and I agree with jonathan: out of the 12 billion that we advise on, about 2 billion of it is in direct, illiquid, less liquid type of investments and when you look at you know forward capital market assumptions that those will be the drivers of growth. However, the biggest challenge is that's also the area where there's the biggest manager dispersion in terms of outcome. That's right, and so you know picking, you know having either you do the due diligence or work with sponsor or fund manager that's doing. Exhaustive due diligence is is really important, and it's not only about having a really sound investment strategy.

You also need to be able to manage a business. If it's a fund, I see a lot of first-time fund managers approaching our firm and individuals who may have had, you know, decades of experience in a particular sector and they've decided to go off on their own and create a fun business. It is a business that is a separate activity and it's really important that not only can you be as an astute investor but also an astute manager of your business. Great, thank you.

I would just make one sort of tangential point as the speaker on the stage before we came up here me an entry point which is: if you're starting a company, don't come to me or make sure you know how you're going to exit, and I want to take a trainer interview to that for a minute. On my personal investment side, I am lucky to have been born into two families that created their Heritage's over decades of holding one company with growing a baton. I look today for just a few people that I can help grow their businesses without an exit plan, not for the capital gain but for the growing cash flow very long term basis, and that's a little different than many people I. That, to me, is much more enjoyable than trying to make the quick pop capital gain right.

Okay, I've seen differences. I know some of you have clients in Asia and Southeast Asia and I've seen over there people do hold on to their businesses much longer due to the capital markets and just generational family planning versus an America or the private equity markets. You know they're calling you every week to buy your company. I have a few Chinese clients.

Maybe they've partly taught me that. Yeah, sure, Paul, I agree with you, know everything that's been said. I think you know we're living in this world today where it's just harder and harder to find alpha, probably because there's been too many folks like us that have gone in the investment business the last 20 years and so it's, you know, just really hard to find elephant, really every asset class today. So you got to be a, you know a niche manager.

You know, in the real estate side, I don't want to be one of the thirty guys sitting around the table bidding on assets. You got to look for those hairier assets etc. But I think most importantly is: you know I used to be a fighter in jujitsu and Muay Thai and it's you know the coach of my coach always said: you gotta have a plan. You know, when you get in the ring you gotta have a plan.

And it's true, you gotta have a plan. You know nothing ever goes according to plan. But you gotta have a plan. And you know, because when you're in the heat of the moment you forget half of what you know and your adrenaline kicks in, and but you got to have a plan and you got have a good team.

So okay, thank you, Candice. I'd say the one key takeaway for me is I have a favorite chart on diversification and it shows you the past ten years. What was the sector that outperformed the market, and one year its commodities, one year its distressed, one year its timber, one year it's emerging markets and so it's something different every year. So I think this chart is a really good.

You can't chase returns, but it's a really good model for you want to have a diversified portfolio, because every year something different is going to outperform the market and if your diversified in good times and in bad times, you're still going to have a decent return threshold. Great, thank you. Before we give a round of applause, I just have a few quick housekeeping items. Don't forget to check every month or six weeks on family offices, calm or always updating new dates.

We have just about all of q1 booked out with dates for next year. And now that you've experienced the super summit and investor summits, if you haven't been to one of our workshops before, I'd really encourage you to come to one of those, because it's totally different than this. Completely different information, very fast-paced small group exercises to get to know the other people in the room. Certain types of our workshops have investors in them and people that run investment management firms.

Some are just for investment management firms, but we're offering, you know, a dozen events just in the first two and a half months of next year and 30 of them overall, so I'd love to see you there. Some other things that don't cost anything is when you're buying a plane ticket to a major city to meet with a client, just check on our website and see if we have an event coming up. If it's flexible when to meet with a client, it can meet with a client and then come to our events and what we do is. You know, this event starts painfully early, especially on the second day when people are out late last night.

But our other events are not so painful. We start at 10 a.m., we're down at 4 or 4:30 p.m. Typically. So if you're in the area, you can come from Philadelphia in to New York the morning of without getting up at 3:30 in the morning, or fly into a regional city that you're nearby and then you can be back home the same night, so you're not away from your spouse, your kids, maybe you don't even need to get a hotel room for the night.

Just makes it more efficient, less painful for my team, not needing the show up at 4 a.m. To set up etc. So keep that in mind with our events. That's a bit different also to other things. It's free. Most people don't know.

You can log into the portal. You can livestream our events. If you can't attend in person or if some team member, it's not worth buying them a plane ticket to come and listen to one panel. I can then just for a panel or two. We also HD record them. We have 25 conferences and events recorded in the portal and HD that you can listen to and watch.

So you can have team members get trained using it. We have our free family office certification and capital-raising certification programs. That's free for you as a member, it's not an upsell on you. We also, for free, will review your materials every month, which gives you two things: 20 pieces of feedback from us on your materials and it gets us to know you very well instead of just saying hi here and shaking hands and you tell them.

Your one-liner will read all your materials and give you 20 pieces of feedback and then we can keep you in mind for clients I'm serving or different connections for people we can make in the room, so we could all collaborate more. So our whole goal is to get your best ROI out of membership. Those are some ways to get your ROI, and we're aligned that the better value you get here, the more that you're all going to be here next year and we'll get to know each other over the next three to five years and do medium to long-term business together in a way that's more meaningful than just going to a conference might go to on average, and I think that's how you really build a community here, and that's what we're trying to do. Though, for me, I thought this was a no offense, and other panelists: I was one of the better, best panels of the day, so let's give him a big round of applause.

[Applause]. Thank you for everybody's attention over the last day and a half. Please feel free to check out our exhibitors, which allow us to be here at the ritz-carlton on your way out, and thank you for all your attention. I hope to see you in q1 at one of our workshops. Thank you.