Q&A: Single Family Office
I have worked for two years for a Texas single family office. I also interned there in college. Ask me anything [Related Resource: List of Family Offices
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I always had curiosity about the structure of a FO, like how was the organization chart (everything done in house? like accounting, HR), equipment (bloomberg?), softwares (anything special?)
As far as org chart goes, we have 6 PM's who each have a speciality and then 3 analysts beneath that are generalists. We outsource most of our accounting to one of the big 3. We have an internal team for law/estate planning and some accounting internally. We have multiple terminals for news/charts etc but don't do much trading in house. We don't use any special software and have a outside accounting firm that generates monthly reports for the family on their total net worth. The family is 2nd generation wealth and are fairly hands off on the investments process. We have full autonomy on what we source and invest into within our asset allocation parameters.
What did the overall portfolio look like? Private equity vs public equity vs other. How was the comp? Hours? What kind of background did most people have?
The portfolio is very diverse. We invest across all asset classes. The comp is very generous for analysts with potential for high bonuses depending on portfolio performance each year. The hours are about 55-65 depending on deal flow. it can go in waves depending on what we need within the portfolio. We try to not create a lot of turnover in the portfolio so most sourcing is in the credit/public equity space. All potential investments come to us so there is minimal travel unless we are going to meet a potential manager onsite/conferences. Since our office is small we have very little turnover. The backgrounds are, accounting, Real Estate PE, and IB. Curiously, no one has worked for a HF or PE firm.
the one downside is that we don't have any sort of training program. I have learned how to value and analyze almost every asset class but I was drinking from a fire hose for a while. Its great exposure though.
Tell us more about your background.
I went to undergrad at a small northeast liberal arts school. Majored in business and accounting. My original plan was to work in NY or Washington DC doing consulting. I interned at this office after my sophomore and junior year. This led to the full time position. I knew the family from local Houston area beforehand and just reached out for a potential internship. After the first summer I enjoyed it so much I knew I wanted to do it long term. It really was just luck as our office doesn’t look outside for employees and has little to no turnover.
Where in Houston are you?
What's your exact location?
How did you come across this job?
How did each of the PMs get to their position?
See above for how I got the job. The PMs worked in accounting roles where they first came into contact with the office. Over time a couple of them worked for another large PWM firm in the downtown area and then eventually came here.
So did alot of people rise in the ranks there? what has the turnover been like?
If your trading is not in-house do you guys use BBs to place your trades?
We don’t do any “trading” per se. we own a few stocks outright but about 90% of what we do is outsourced to managers.
When we do place trades it’s through our GS or JPM team. They have dedicated ultra high net worth teams.
Are you investing directly in the manager (fund), going alongside those managers (co-invests), or directly putting stakes into the debt/equity securities of public companies? If it's a mix, what is the mix between those 3 types of deals?
I would say 85% in the fund as an LP. Then 15% co-invests mostly on the private side.
what's the approximate AUM of the FO?
what made you choose that path?
What's your average hold period (I know it's case by case but)
Ideas on Comp and hours across the industry and as you move up? is it 75% base 25% bonus 2/3 1/3? 50/ 50?
Deal sourcing channel?
Coinvesting?
Minority equity?
I've been scanning previous forums, most outdated and none directly address this, what are b-school opportunities coming from a family office vs. IBD?
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