Hello, it's Richard Wilson coming to you from Geneva, Switzerland. I operate the family offices group, the world's largest professional association family office professionals and I also operate privateequity.com and I was just recently at an event down the street here speaking on family offices and one thing I talked about is what family offices are looking for in fund managers.
And I just wanted to give a real quick two-minute summary of what family offices are looking for as private-equity investors so that those of you in the private equity industry can get a hint for what's important if you're trying to raise capital from this space. So, if you don't remember anything else, there's a few things that you should definitely write down.
One is capital preservation is the number one and number two most important thing that family offices care about. They don't want to lose their money or as Mr. Wonderful would say from Shark Tank, Kevin O'Leary, don't kill my money. They know how to make money, they're typically entrepreneurs or have done well on the private sector side, but they don't want people losing their money. They don't want you to lose principle.
They care more about that than taxes, than height growth, than some new exciting idea, than anything else. These people are time sensitive, they are tax-sensitive, they would like incoming growth. The capital preservation part, I can't stress enough. Next, they want managers who are consistent, reliable, professional and they want the most credible, well-known team possible. It's very smart for a fund manager to get some celebrity type people on the team whether they're an ex-CEO of a large investment bank or they came out of a large, well-known private equity shop or whether they are just a well-known business figure who is now a savvy investor and he's gotten onboard with your private equity fund, can make a massive difference in getting meetings and having people take you seriously.
Because they know that for example, if you had Richard Branson on your board of advisors, that you must be somebody who is of value, or you wouldn't have even gotten a meeting with Richard Branson much less gotten permission to have him on your advisory board and work with him, so if you can pull that off, it's worth whatever time it takes to do that.
Finally, the last thing to remember is that ... or maybe not remember, but the last thing to share is that when I speak to family offices, what they complain about almost more than anything else is that nobody listens to them. Nobody pays attention to what they're saying, they ask for materials, fund managers just don't get back to them and there's a few reasons for this. Family offices are actually seen as very small investors by most private-equity fund managers. They want to raise capital typically from pension funds, endowment funds, foundations.
Because you can raise, $20 million, $30 million, $50 million, $100 million at a time, most family offices are going to allocate $3 million, $5 million, $10 million, maybe $1 million or less if you'll allow them and so, a lot of private equity fund managers don't treat family offices very well. Family offices know that and are very annoyed by it. They just don't get serviced well after the money's invested. They don't get consistent reporting, they don't get somebody assigned to their account who is senior enough to answer questions on the phone.
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Richard C. Wilson is the founder of the Family Office Club, the #1 largest community of registered ultra-wealthy families and family offices with 1,750+ registered investors and 20+ live events a year. To download a free book on the family office industry please visit: [ Ссылка ] and if you need help investing or setting up your family office please see our Centimillionaire Advisors, LLC website at [ Ссылка ]
Recently, while writing "The Family Office Book: Investing Capital for the Ultra-Affluent" Richard was able to interview 36 top family office executives including $1B single family offices and top 30 multi-family offices. To learn more please download our free Family Office Report PDF on single and multi-family offices right now by visiting: [ Ссылка ]
