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The Investment Needs of Family Offices

Many investors want to gain access to family office investors.  After working with the large institutions and real estate private equity funds I can personally tell you that the family office marketplace is distinctly different.   Believe it or not it is more similar to the retail market than it is the institutional market.

I can't tell you how many times that I have sat at a conference listening to a sponsor pitching their deal.  I feel that I am pretty smart and understand alot of different strategies and structures but I can't tell you how many times I have listed to a sponsor talk about their strategy and my eyes would start to glaze over because they were speaking as if it was a foreign language.  The first thing I think of is "the sponsor has no idea of their audience" and this is something I have not seen only once but many times.

For example, one time I was at Family Office Association event and one of the sponsors was in front of the room going over her presentation.  It was obvious that she was very intelligent and that she knew what she was talking about but it was also obvious that no one could understand what she was saying. The Family office space is made of up of a patriarch or a family that made their money in a specific industry. They may have spent 30 or 40 years building their business while focusing on that one business. In fact, 90% of the time their whole net worth was tied up in that business until their exit event. These are very very intelligent people however their expertise was in one specific area.

The best thing a sponsor could do would be to break down what they're doing, what they're trying to accomplish and to do so in a manner that is very simple and easy to understand. By doing this it will bring up additional questions but now you're in the position to be able to answer those in a manner and in a way that your audience will start to understand. Know your audience and be aware of your surroundings. 

Great ideas come every day but if no one can understand what your trying to say, then that is what it will remain. A great idea.

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