How Family Offices Decide What to Outsource
In a Family Offices & Family Office Club podcast, Richard C. Wilson explains a framework for deciding which investment work a family office handles itself and which it delegates.
Richard C. Wilson uses a three part framework to explain how a family office can decide which investment work to delegate and which to keep in house. He distinguishes broad market exposure, cash flowing real estate, and an operating business or industry where the family has expertise. The discussion also shows how a sponsor can approach a family that says it wants control, then shape a narrower working relationship around deal sourcing.
In this video: Richard C. Wilson (Speaker)
What they said
- Richard on choosing a real estate lane. Richard says families can choose a property niche and geography, and sometimes decide deal by deal. Sponsors or funds can handle sourcing, negotiation and property management. (at 1:28)
- Richard on focused industry sleeves. Richard says even really successful families might form something like a private equity fund, but at most he has seen three sleeves succeed. He says they typically avoid spreading across 15 different industries. (at 2:22)
- Richard on matching roles to the work. Richard says the person who oversees a family office may not be suited to run its operating business or select and manage its direct investments. He says few multi family offices are equipped to do both areas. (at 3:16)
- Richard on a narrow first deal. Richard suggests a sponsor who sources deals can propose a co investment, with the family handling the rest. Richard imagines a sponsor telling a family it sees a thousand deals a year and has two under LOI. (at 4:41)
In their words
"my due diligence is done on the partner."
Why it matters if you are building or preserving great wealth
Richard says his due diligence is on the partner. That makes trust in the operator the screen for delegated property work, so a family can judge whether to hand over execution without reviewing every property task itself.
From Richard's exclusive Billionaires.com interviews
Lessons from Richard C. Wilson's one-on-one interviews, as published on each interview page.
- Anu Aga: Focus on one main cause. Her family found its giving more satisfying and impactful once it chose primary education for the underprivileged in India.
- Binod K. Chaudhary: Never chase a deal out of desperation. Stay cool and look at every part of the deal. Have your advisers and your finance team review it critically. Your counsel should review it too.
- Larry Connor: Learn from every mistake. Larry's team owns its failures and makes no excuses. They learn, change quickly, and keep getting better.
See the data
Frequently asked questions
What would Richard outsource in cash flowing real estate?
He says he would set the strategy, then rely on a partner to work out how to execute it at a property. He would also rely on partners or brokers to source and screen deals, handle most due diligence, and manage properties.
How might his operating business find an acquisition?
Richard says his team does almost everything itself, but might use a broker who specializes in its field to source a business. That broker might also contribute strategy.
Sources
Quotes are copied from the video captions and checked against the transcript. Timestamps link to the moment in the video. General information only, not legal, tax or investment advice.