Many families worth tens of millions, and most worth $100M or more, end up making direct investments whatever their advisers recommend. The question is whether they do it with a plan.
The problem
Wealth management is mostly built for the mass affluent: funds, traded products and model portfolios. Families who want to own real estate or operating businesses directly often find their adviser has little to offer. The result we have seen many times is a family investing without a focus, saying yes to whatever deals arrive and unsure which deals it should be doing and why.
What a better process looks like
- Define a strike zone: the asset types, deal sizes, geographies and roles the family will consider. See what a deal flow strike zone is.
- Build several sources of deals rather than one. See Part 10: Building Your Deal Flow Totem Pole and how family offices source deal flow.
- Screen every deal the same way before spending time on diligence. See what family offices look for before investing.
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