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You’ve Met One Family Office, You’ve Met One Family Office

A friend put it very succinctly when describing the investing strategies of single family offices in the following blanket-statement terms:

You’ve met one family office, you’ve met one family office

In other words, they all invest so differently there is no way to put them into nice buckets. Conversely private equity groups typically have investment theses that look very formulaic and typically mirror something like the following:

Industry Preferences: [Insert Here]
Revenue Minimum: [Insert Here]
EBITDA Minimum: [Insert Here]
Minimum Check Size: [Insert Here]
Investment Type: [Insert Here]
Excluded Industries: [Insert Here]

In fact, most private equity groups even list the aforementioned on their websites and in their other marketing material. Such an outline makes it easy to archive various private equity groups in one’s CRM for eventual outreach. Difficulties arise when you attempt a similar cookie-cutter approach to tagging family offices for later deals. Both single and multi-family offices can behave very differently when it comes to their investment mandates. They are also more fickle and less apt to do simple things like answer the phone or respond to messages. When it comes to reaching them they are more like individual accredited investors. They not only lack the pressure of a “2 and 20” structure, many of them have buy and hold strategies that are lifetime-focused and which go well beyond the short-sighted five-year horizons of most private equity shops.

So, the next time you think about pitching a deal to a family office, remember you’re dealing with a very different animal indeed.

Nate Nead on LinkedinNate Nead on Twitter
Nate Nead
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC which includes InvestmentBank.com and Crowdfund.co. Nate works works with middle-market corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He is the chief evangelist of the company's growing digital investment banking platform. Reliance Worldwide Investments, LLC a member of FINRA and SIPC and registered with the SEC and MSRB. Nate resides in Seattle, Washington.