How to start a family office (HF rainmaker)

Currently in my mid-30s as a rainmaker PM at a multi-manager. Through a lucky combination of sky-high comp, lucky investments and recent (+ soon-to-be expected) inheritances, my net worth is expected to be about $350MM liquid in a few years, which puts me into entry-level single family office territory. Does anyone have experience, advice or insight to shed some color on the process of establishing a SFO? I understand that overhead and compensation costs are going to be a large % of AUM relative to other places I could keep my money, but there is a certain amount of prestige associated with having your own family office. Are there any other downsides to having a family office and are they generally expected to outperform alternative assets classes like PE/HF/VC/Private Credit that I could cut a cheque to?

 
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Imagine having $100M+ and the only place to go for advice is WSO. Rough times

 

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"The obedient always think of themselves as virtuous rather than cowardly" - Robert A. Wilson | "If you don't have any enemies in life you have never stood up for anything" - Winston Churchill | "It's a testament to the sheer belligerence of the profession that people would rather argue about the 'risk-adjusted returns' of using inferior tooth cleaning methods." - kellycriterion
 

LowCaliber how much did the fam leave u. I bet I’m over u young bull

 

First off, congrats on the milestone (considering all things true). It’s an incredible accomplishment to be beyond the $100M mark and liquid. 

Relative to the SFO question at hand, the most obvious and realistic answer is it depends. It’s interesting that you perceive having an SFO as prestigious because most are rarely talked about and the ones that are more visible is because of the deal flow they’re able to generate. I’m not too familiar with the actual net performance of the FOs I’ve worked with/for, but I will say each of their investment strategies all differ and would expect performance to do the same — solo-VCs with operational impact likely have more tangible asset class returns than SFOs investing across art or sports teams with an extremely long term horizon. 

 

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