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A Common Theme Among Family Offices

A few weeks ago I had the fortunate opportunity to attend two great conferences where I was asked to sit on panels for.  The first was the IMN Conference in California regarding real estate and family offices and the second in Chicago which was a family office private equity conference held by the law firm Handler Thayer.

At both conferences a common theme came up which I have noticed for quite a number of months that I have been attending these conferences, and that is  1) family offices are fee conscious and the 2 and 20 doesn't work for all family offices, and 2) that family offices are partnering with other family offices on investments more and more.  For me that makes perfect sense.  In fact 9 months ago in our family office we were going to launch a fund to endowments and family offices with the expectation of me managing it.   After really digging into the family office community I ended up recommending that we don't start a fund that we focus on separately managed accounts, direct one-off deals or to put together a pledge fund of sorts.   Why??   I am convinced that families that are in the family office community, are best suited to partner up with another family who made their wealth in a particular industry that they want to invest in.  The reasons are obvious but not necessary recognized, sort of like asking where your glasses are when they are sitting on top of your head (yes you know what I am talking about)

EXPERIENCE

If a family created their wealth from widgets, wouldn't you want to be investing next to the person who created that company if you wanted exposure to widgets rather than one of the managers of the widget company?  These are people that gave their whole life and focus to this one cause..........creating great widgets!

PATRIARCH

When you are investing with or alongside another family you are dealing with the Patriarch, the person that understands what you went through to get to the point where you have a family office.  They understand what it means to make payroll, to deal with their children who may want to be in the business or want nothing to do with the business, they understand what it is like to put yourself out there each and every day and what it is like to get to the level that they are at themselves.   Different industry perhaps but same issues.




AN INVESTORS OWN CAPITAL AT RISK

When investing with or next to a family office you are investing with someone who is putting up their own money, not the money of others like many fund managers but their own money just like you are.   No one takes more care, effort or concern for their capital as the one who is investing their own capital.  By investing next to another family who is running the deal, your money is next to someone with that same concern and focus that you need.

SHARING OF EXPENSES

As many families are cost conscious by investing next to another family you are able to share in the costs rather than investing into a company or fund that is considering fees to be part of their income stream. 

These are just a few of the reasons why families are starting to invest next to other families more and more.    To me it makes complete sense and apparently to a lot of families it makes complete sense to them as well.

About DJ Van Keuren

Mr. Van Keuren currently works as a Director for The Arsenault Family Office.  As a Family Office they have over 30 years of experience in contrarian, value-add and opportunistic real estate investing.  Individually, Mr. Van Keuren has over 25 years’ experience in real estate, finance, investment banking, and fund management. Among DJ’s experience includes; Raising and securing capital from Institutional Investors, Private Equity Funds, Family Offices, and Direct Capital Sources for over $2BB worth of projects. Mr. Van Keuren has been a Director of capital markets (equity& debt) for both a domestic and international real estate development company, and the Managing Director and Fund Manager for the American Dream Real Estate Fund.

DJ is the author of "Real Estate Investing for Family Offices", contributor to www.usfamilyofficerealestate.com, is the past President of the Harvard Real Estate Alumni Organization and Board Member for the Real Estate Academic Initiative at Harvard. Mr. Van Keuren obtained his Bachelors degree from Ball State University, attended the NYU Schack Real Estate Institute, and received his Master’s Degree from Harvard University in Management and Finance.




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