Family Offices for Searchers: A Primer

Every one of them has a version of a family office, every single one. Like they are investing somehow their homes are being taken care of. They have a, you know, lifestyle management sort of person.

So they're all going to like look and feel a little different and they're all going to do some stuff kind of similar. So I think that's a good sort of strata and breakdown, the different types. Great, thank you for that and understanding that this will depend a ton.

Well, there's, there's, there's again some nuance there. So I think, because bandwidth constraint is a huge, you know, issue, right.

I think to use your team's focus on a deal that's going to be a tiny amount of the amount of sort of annual deployed capital bogey that you need to hit. It can be, you know, a bad use of resources. Right. So if you, a lot of families will say like we, we can't invest a check that's less than 10, right, 10 million bucks.

Because we need to get this money out the door. We have to like we're, our target is to invest 50 to 100 a year. We want to do it across whatever 5 to 10 deals.

So we just can't do anything less than a certain amount. But there's a huge amount of families as well that would love to do, you know, one to seven million dollar checks. Some will do $500,000 checks.

And that's where it sort of gets into this variety of check sizes. I think obviously very you can in most cases say, okay, if there's a $10 billion family office, their directs program is going to be usually writing whatever 50, $100 million checks plus. But there may be a sleeve of that family office that's like, we actually want to do more independent sponsor deals and smaller checks.

So there's a team at that firm that's running sort of their small cap private markets team. They're doing independent sponsor deals, maybe they're doing some directs and maybe those are much smaller checks. So that's why I don't think you can totally discount even the large family offices for writing small checks because a lot of them want to start early and a lot of them want to build platforms,…

So just like private equity, they want to get in early. They want to back an independent sponsor deal for sort of anchor acquisition 1 and then fund all the equity for the next sort of five deals. And they want to build a relationship over 5, 10 years with a great independent sponsor or operator or investor and they want to, you know, they want to back them on deal one.

So it's so relationship driven that if, if the feel and fit is right and someone's like, Look, I need 500 or $1 million now, but over the next five years, like I hope we're deploying 30, 40, $50 million, like that's definitely not off the table for, for a family office, no matter what the size.

James, this point about maybe there's a cleaner correlation between size of family office assets under management in amount of capital per year deployed. Is, is that, is that ratio pretty well defined across family offices? Yeah, somewhat. I think it all sort of depends too on the liquidity, right?