Prospects of working for a family office ($300M)
Currently working for a reputable firm with a steady pipeline of dealflow. I was propositioned to join a new family office (just started a few months ago) of $300M in dry powder. The role would be a step up in title (mid level, senior associate/AVP) and comp, both salary and ability to co-invest in deals (not something I am able to do at my current firm until at least another three to five years). The role would entail working directly with the family office founder and executives to source and execute transactions across the US. I am close with one of the principals there who I really respect and is a great culture carrier (direct experience) so would enjoy all of the people (culture at the current firm is not so great for a number of reasons). Seems like the move would be higher risk, but the opportunity for high reward, but not sure how else to think about it. Curious if there’s anyone on the forum that has experience at the sub $500M family office that would be able to shed some light?
1. How has your experience been? Wlb, comp progression, culture, etc.
2. Do you feel that $300M is enough for a sustainable investment strategy?
3. Any advice/tips you wish you would have known?
Thank you ahead of time for the responses!
I've worked for some national developers as well as a family office.
My concerns with a family office always revolve around (1) who is the final decision maker and (2) what is their investment strategy/thesis?
I think it's crazy to extrapolate WLB just based on whether it's a family shop, region developer, or national company. You have to find that out from talking to other folks.
Sounds like this place is doing deals now, which is great. Most shops won't say it, but deal flow has dried up dramatically, and my personal opinion is that the best job security is a firm who's doing deals.
You didn't mention what their structure/strategy/funding are - fee development, merchant build, closed end fund, long term hold, etc or if they're using LP money or their own money. $300M isn't much it they buy fully leased trophy assets but it's good if they're an opportunistic merchant developer operating all cash.
Sounds like you like the principle, which is huge. If he's receiving advice from the employees but ultimately calling the shots, you need to trust his judgement as well as his investment vision.
Also make sure you firm up the promote structure upfront and understand how you get paid if you leave or get fired. Devil is in the details there.
MacBuilds thank you for the thorough response. Did you continue with the family office route after working for a national developer? Have you enjoyed the switch? To answer your questions (all very relevant and top of mind), it would be LTH on either core/value add and potentially allocations for development with internal capital. Think there’s ways to grow the pie through raising a fund with HNW LP’s, but you’re very correct that $300M levered even at 50% really is only $600MM of transaction capital. Also curious of how they plan to pay for operating overhead since there isn’t a fee stream as of yet. Appreciate your insight!
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