How Family Offices Divide Investment Work
Richard C. Wilson speaks over a chart about how a family office divides responsibility across wealth management, real estate and an operating business.
Richard C. Wilson presents a framework for deciding how much work a family office keeps in house and how much it assigns to outside specialists. He describes three kinds of investment activity and uses circles and columns to show how responsibility shifts across them. He also explains how the framework can shape conversations with a family about the work it wants to retain.
In this video: Richard C. Wilson (Presenter)
What they said
- Market exposure. Richard describes diversified market exposure as a customary wealth management function with a high level of outsourcing. A family may state which industries it likes, then choose a wealth adviser and stay relatively removed from the work. (at 0:34)
- Cash-flowing real estate. Richard says a family can choose its real estate niche and geography, and may select deals without sourcing or managing them. He says this allocation might include 10 or 20% real estate development. (at 1:02)
- Richard on operating in familiar industries. For an industry where a family has experience, Richard describes low outsourcing and direct involvement in the work. He says families investing directly across 15 industries would not know what they were doing, and that successful sleeves tend to be related. (at 1:57)
- Richard on defining a sponsor's role. For a client who says they want control, Richard suggests identifying which work they actually want to own. A sponsor might receive some equity for sourcing a deal, while the client handles the rest, a right of first refusal or a buy box can shape future opportunities. (at 3:46)
In their words
"It takes the most amount of your time."
"And sometimes people get this mixed up and they hire one person just to run their whole family office"
Why it matters if you are building or preserving great wealth
Richard says one person can oversee the three channels, while wealth advice, real estate and an operating business call for different work. That distinction can help a family decide what a single office lead should coordinate.
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
Which property types does Richard mention?
He names apartment buildings, self-storage, mobile home parks and senior care, as Brandon had discussed.
How does Richard describe due diligence for his real estate approach?
He says he would rely on the partner for most due diligence because his own diligence focuses on the partner.
How might he source an operating-business acquisition?
He says his team might use a broker who specializes in its field, with possible strategy help as well.
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.