Single-family offices are accurately recognized as excellent sources of capital for all types of money managers. Single-family offices control trillions of dollars that they need to put to work. The assets alone are very compelling, but when taken in combination with their unique risk profiles and often-flexible time horizons, it is clear they can be an extremely attractive target audience for hedge funds, private equity managers and investment bankers.
The sheer number of investment management firms and the surfeit of products and deals in the market at any point in time have created a hypercompetitive fundraising environment—especially for sources of high-net-worth capital.
For the most part, a powerful key to unlocking access to single-family offices is referrals. Very simply, if you want to be able to discuss your offerings, either the single-family office has to invite you in or someone has to refer you.
While single-family offices are increasingly proactive in identifying and connecting with investment professionals, the only way to regularly catch their attention is to be a thought leader. At the same time, it is quite rare for any form of cold calling to be effective. Therefore, the aim is to have single-family offices call you or be recommended by another single-family office or someone they trust, such as a wealth manager, an attorney or an accountant.
A well structured thought-leadership campaign can place money mangers top of mind with decision makers at single-family offices and, more importantly, with the “professional ecosystems” these offices turn to for support. Family offices rely on a highly vetted network of professionals to help them with everything from investment strategy to business succession planning to personal security. Very few of them have the infrastructure to handle everything in-house, so most single-family offices are surrounded by an ecosystem of their own creation filled with specialists and experts who provide them with services, decision support and, of course, introductions.
Not surprisingly, the majority of investment managers are introduced to single-family offices via this type of ecosystem, so a heightened profile among these influential professionals is critical to garnering referrals. It is also extremely beneficial to develop a dual-impact brand.
A dual-impact brand not only communicates to single-family offices (as well as everyone associated with them) the money manager’s exceptional investment acumen, but it also conveys that they can help these other professionals to excel as well. There are quite a few ways, depending on the specific professional in question, to provide insights and actionable strategies to enable them to excel. These are some examples:
• Best practices of single-family offices and the overlay with various types of professionals.
• Driving trends in the single-family office universe and how they can impact the professional ecosystem.
• Business development strategies applicable to particular professionals in the context of their own objectives and target clients.
• Industry-specific best practices for respective professionals.
• Emerging trends shaping the various professionals and their platform of capabilities.
It is critical to realize that it takes time to construct the type of marketplace positioning that can be instrumental in creating an elite professional referral network. In fact, building a high-caliber dual-impact brand fueled by thought leadership could take a few years. Meanwhile, those investment professionals who commit to developing a dual-impact brand are likely to generate significant new business along the way and, once the tipping point is reached, will have a fairly steady stream of new opportunities—and new single-family offices—to pursue.
Russ Alan Prince, president of R.A. Prince & Associates, is a consultant to family offices, the ultra-wealthy and select professionals.
