Investment Preferences of Family Offices

By Richard C. Wilson
CEO & Founder
Family Offices Group
Richard@FamilyOfficesGroup.com
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Family Offices Group
1. #1 Global Family Office Brand
2. Founded in 2007, 68,000 Members in 50
countries
3. 1,800 Articles, 275 Videos, 50+ Hours of Audio
Interviews, & Millions of Views
4. Our resources have been used by over 5,000
family offices globally
5. Face-to-face meetings with over 1,000 family
offices in 15 countries
6. #1 bestselling family office book called The
Family Office Book: Investing Capital for the
Ultra-Affluent
7. Family Office Certificate Program: Qualified
Family Office Professional (QFOP) designation:
http://FamilyOfficesGroup.com/Training
7 Family Office Investment Priorities
1. Capital Preservation
2. Growth
3. Privacy
4. Taxes
5. Income ($100M+ Change)
6. Time Commitment
7. Privacy
8. Fraud Risk
%
What is Unique About Working with FOs?
1. Low level of flow unless you are Michael
Dell or Boone Pickens
2. Opportunity to move quickly when the
opportunity is right
3. The right industry titan can open big
strategic doors
4. Referral networks are key
5. More Money, More Problems for most
resource/team constrained family
offices





1. Standard Investment Banking Approach
(90-95% of all offers)
2. Strategic Valuations (Samsung)
3. Futurist Valuation/Mindset (Disney/Kennedy)
Note: Many my think strategically but try to buy
you out at commodity investment banker prices.
3 Types of Direct Investments
Direct Investing Motivations
1. Definition
2. Examples
3. Motivations: Transparency, Returns,
Competitive Edge,
4. Pendulum Swing U.S. vs. Asia
5. Portfolio %s dedicated to Direct
Investing



Here is a video I recently recorded while I was in Berlin on direct investing:
http://SingleFamilyOffices.com/Family-Office-Direct-Investing

Direct Investing Types
1. Commodity, Strategic, & Futurist Valuations
2. Diversification vs. 1-3 sandboxes
3. Minority boring & stable vs. control and 100%
buy-outs




1. Define Each
2. Creative Terms
3. Immature Space
4. Very under-the-radar
5. Trust and reputation based
6. Specific to certain industries, and
geographies

Examples: $1B Consumer Product, $1B
Commodity Families, $12B EU Family, & 6
th

Generation Textile Family
Co-Investments & Club Deals


1. Simple Hurdle
2. Apartment Buildings & Hotels Preferred
3. Geographical checkbox or complete
diversification mentality
4. Trophy Assets or Networking/Prestige
Benefits
5. Professional Teams + Long-Term Track
Records are rare
6. Many grow out of needing help
Real Estate Investments
Family Office & Client Examples
1. 7
th
Generation Textile Family
2. Famous $3B+ Family
3. $1B+ Commodity Family
4. $2B+ Product Family
5. Philippines VC & Tech/Palm Oil Family
6. #1 family in Peru
7. $900M PE Family

&!
Conducting Due Diligence
1. Go in with eyes open to the niche and size
of business you are targeting
2. Angel Capital Education Foundation
! Median due diligence time: 20 hours
! Those who spend over 20 hours had a 6x return on capital
while those who spent less than 20 hours had a 1.1x return.
! Those who spent over 40 hours/deal on average had a 7x
return
3. Attorney fees can range from $5-20K on the
low end up to $100K+ for large deals.
Typical fees tend to be between $10K-$25k
for most family office deals I have seen.
Top Direct Investing & Co-Investing Mistakes
1. Not Understanding the Risks Before Buying
2. Not Anticipating Future Rounds
3. Overzealous Negotiations
4. Not Saving Dry Powder
5. Poor Due Diligence
6. Pouring Good Money After Bad
7. Not Having an Attorney Review Everything
Free Video:
http://SingleFamilyOffices.com/Top-Mistakes-in-
Direct-Investing
Deal flow Sources for Family Offices
1. Family Office, Merchant Bank, and Investment Bank
Referrals
2. Call Centers
3. Niche Industry Status, $1B+ Commodity Firm
Example
4. Deal Networks (Axial, etc.)

Deal Fatigue: Families are worried about seeing a
shopped deal, that has too many layers of fees, non-
ideal terms, or just something that has no momentum
in the market.

Here is a short video on sourcing direct investments:
http://SingleFamilyOffices.com/Sourcing-Deals-For-
Direct-Investments

Crystal Clear Advantage

1. 2,000+ fund managers a year
2. 86% of investors wont invest in something
they dont understand.
3. Half of all passes on a strategy are due to
educational barriers.
4. Geographical & Sandbox Family Focus
5. Families are fee sensitive
Family Office Resources
We offer the following resources on family offices:
1. Family Office Database Packages:
Http://FamilyOffices.com
2. Qualified Family Office Professional (QFOP):
http://FamilyOfficesGroup.com/Training
3. Family Office Workshop Series:
Http://FamilyOfficesGroup.com/Workshops
Questions?


Richard C. Wilson
CEO/Founder
Family Offices Group
Richard@FamilyOfficesGroup.com



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